Severing Israeli trade ties would cost SA dearly

MICHAEL BELLING

Freeman told the SA Jewish Report that asking about the economic consequences of trade between South Africa and Israel was the wrong question.

“The reality is that there are three El Al flights a week with Israeli tourists and businesspeople who are coming here to spend and invest in South Africa,” he said.

“There are strong and growing business links between Israel and South Africa. That is the point. That is what we should be looking at.”

Freeman said trade between Israel and South Africa had increased year-on-year at over eight per cent for the past five years.

“Just this week 11 companies from Israel were in South Africa having 200 meetings with South Africans to discuss potential for increased trade and investment.

“We have currently in Israel a South African delegation attending the Digital-Life-Design conference,” one of the premier international hi-tech gatherings, giving South African entrepreneurs exposure to hundreds of other start-ups, investors and leading multinational companies.

“This is a typical week in Israel-South Africa trade.

Itai Melchior, the trade attaché at the Israeli Embassy, said trade between the two countries was over a billion US dollars a year – and the balance of trade was significantly in South Africa’s favour.

South African imports from Israel are mainly in the strategic agricultural sector. Advanced irrigation systems and greenhouses as well as yield-enhancing fertilisers and seeds, top the list.

According to economist Michael Kransdorff, enhancing the agricultural sector is a key component of the South Africa National Development Plan. The government has set the ambitious goal of creating a million much needed new jobs in South Africa’s rural areas, largely through empowering smaller farmers with improved skills and technology. Continued Israeli imports, investment and sharing knowledge is important to achieve this.   

However, Israel is far less reliant on South Africa. About 90 per cent of its imports are raw materials that can be readily purchased elsewhere. If trade were to be stopped it would not have a major effect on Israel or Israeli companies.

Israeli exports were mainly split among the US, Europe and the Far East, with around 30 per cent going to each of them.

“No Israeli company is reliant on the South African market. Jobs will be lost in South Africa, not in Israel. Israeli companies employ thousands of South Africans here directly and indirectly. These jobs could be lost.”

He was concerned that ceasing trade would have a much bigger impact on South Africa. It would have a negative effect on the atmosphere of doing business, which would be a shame.

“I don’t think it will happen,” he said.

South Africa needed what Israel could offer, “especially  technology, water, energy and agri-technology, for which Israel is world renowned.”

He pointed out that, “the Palestinian Authority’s trade with Israel is growing year by year. The PA is not calling for a boycott of Israeli companies.”

The Boycott, Divestment and Sanctions movement did not like that.

He added that, “all the cellular operators and fixed-line operators in South Africa have Israeli technology. Most mobile phones have Israeli technology and companies like Google, Apple, Microsoft and Intel have major research and development centres in Israel.”

He quoted a recent article by Arthur Goldstuck saying that if South Africa did not use Israeli technology, it would have to go back to the stone age.