Business booming in Israel, says diplomat


“Business is currently booming in the State of Israel: why, and what lies ahead?” was the theme of an address by Barukh Binah, consul general of Israel to the Midwest, who spoke to about 100 community leaders at a meeting last week sponsored by the World Affairs Council of St. Louis, in cooperation with the Jewish Community Relations Council. The meeting took place at the University Club Tower.

Binah, a veteran Israeli diplomat, who has been a member of Israel’s Foreign Service since 1979, and who has held numerous major diplomatic, research and policy planning positions, assumed his duties as consul general to the Midwest, based in Chicago, in mid-August 2005. Binah, a former spokesman for the Israeli Ministry of Foreign Affairs in Jerusalem, has made frequent visits to St. Louis, including a special appearance at a St. Louis Rally for Israel during last summer’s war between Israel and Hezbollah in Lebanon.

“Despite the costs of the conflict in Lebanon, which of course affected the business climate, business in Israel is indeed booming,” Binah said in his remarks, pointing out such factors as six percent growth, low inflation, dramatically falling unemployment, a budget surplus, a shrinking national debt and record levels of foreign investment, in contrast to the woeful situation of the Israeli economy of just a few years ago, which included runaway, triple-digit inflation, large unemployment and major sectors of the economy, such as tourism adversely affected by the Palestinian terrorist attacks and the general violence in the region.

Bob Fisher of the World Affairs Council of St. Louis, welcomed Binah and the invited guests, and thanked the JCRC’s Israel Business and Technology Committee, co-chaired by David Bohm and his brother Rob Bohm, for supporting the gathering.

“We have already established that business and the overall ecnomy are booming in the State of Israel, and so the obvious question is why, since we had the costly war in Lebanon last summer,” Binah said. “In 2006, we had the war, and our economy that third quarter, of course, took a beating. Our tourism industry was, of course, very hard hit by the war, but the overall health of our economy has helped us to fully bounce back from that setback,” he continued. He pointed out that as recently as 2002, Israel’s economy experienced negative growth, but by 2004 it grew by four percent, and six percent in 2005. “We were at six percent in 2006 until our third quarter and the war caused a slump; overall, we were at 4.8%, and are moving back toward six percent this year. Such other positive economic indicators as per capita GDP (gross domestic product) has risen to $l7,848, as compared to $l4,000 a decade ago. While we don’t have all the numbers in for 2007 thus far, we are growing at a rate of six percent and our per capita GDP is expected to reach $l8,000.”

Binah also pointed out that Israel has become less dependent upon government spending, which has also helped stimulate the private sector. “Back in 1995, 55 percent of our economy was government spending; in 2005 it had fallen to less than 50 percent,” Binah said.

As an example of how far the Israeli business and economic climate has improved and gained efficiency in recent years, Binah noted that back in the 1960s and early 1970s, families would often have to wait as long as seven years simply to receive a land-based telephone.

“What once took seven years, now takes seven days,” and some 95 percent of Israelis have at least one cellphone in addition to their land-line phones, and many families have two or more cellphones.”

Binah added, “In addition to the vastly improved telephone service, there are some 900,000 Broadband Internet connections in the State of Israel. This and other factors have improved Israel’s economy to the extent that one analyst described the economic picture in the Jewish State as ‘nearly perfect,'” Binah pointed out.

Israel has become one of the major high-tech and scientific research and development nations in the world, and is the only country to have both free trade agreements with the United States as well as being on the European Neighborhood Plan with the European Union. Israel is ranked fourth to the United States, behind only Japan and Spain in the area of scientific research and development, Binah pointed out.

Looking toward the future, Binah said, “We are of course familiar with our strengths in Israel, but also with our weaknesses and challenges. Our governmental structure is in major need of reform, and several proposals are in the works to accomplish that. We also face a very serious threat from the regime in Iran, whose leaders have directly threatened Israel and are working to develop nuclear weapons. We cannot afford not to take the threats by the Iranian president to ‘wipe Israel off the map’ seriously,” Binah said.

Binah expressed his appreciation to the United States for its continued support of Israel as a sister democracy as well as a trading partner in the Middle East, and said he was encouraged by increasing voices within the Arab world in support of greater freedoms in Arab nations and a more pragmatic approach to eventual dealings with Israel. “We have had the first two Arab Awakenings, and we can hope we are seeing signs perhaps of a Third Arab Awakening,” he said.