Why investing in Israel is worthwhile

JORDAN MOSHE

So says Marc Reiss, deputy managing director of international activities and private banking of Israel’s Mizrahi Tefahot Bank. Speaking at a dinner hosted by local real-estate group Home in Israel at the Wanderers Club last week, Reiss elaborated on the significance of the Israeli economy and the context of this success.

He also made it clear why, aside from countering BDS, it is so worthwhile investing in a life, property or business in Israel.

He explained that Israel’s economic success is rooted not only in Jewish savvy, but in Jewish heart. Despite the statistical insignificance of Jews worldwide, the force they represent finds expression in the success of the Jewish state and its ability to punch above its weight economically.

“To understand the Israeli economy, one must first understand the environment which we are in as Jews,” he said. “Our challenges are often difficult to quantify, but we need to put things into part of a broader perspective.” Explaining that people often have the idea that the Jewish world is far vaster than it actually is, Reiss quantified the actual presence of Jews worldwide.

“Today there are roughly 14.5 million Jews in the world. The largest population is in Israel, at 6.6 million. This is followed by the US at 4.5 million, France at 500 000, Canada at 400 000 and the UK at 290 000. South Africa ranks ninth with around 60 000.”

He continued: “There are roughly 7.7 billion people in the world. Today, it takes 10 years to add a billion to the world population. Jews are only 0.19% of this, and because of population growth, we become increasingly insignificant as time passes.”

Despite this insignificance, Jews are a central focus of world politics. Reiss said the global political arena is increasingly becoming divided by extreme left and right divisions, with countries like Mexico and Greece moving to the hard left, and Italy, France and Brazil joining the right.

“The one thing in common between ultra-right and ultra-left is that both are not particularly fond of the Jews,” said Reiss. “In this climate, our enemies’ enemies have become our friends.”

Add to the mix economic fluxes, financial indicators and unemployment, and you can begin to understand Israel’s economic success and appeal. Said Reiss: “Financially speaking, there has never been a generation in which it is better to be a Jew, let alone an Israeli. This is the first time in our history that this is so.”

Israel’s population growth is 2%, compared with that of the European Union at 0.4%, which is due only to the influx of Middle Eastern and African refugees. “The workforce in Israel is four million,” explained Reiss. “Unemployment is 3.9%, which by any definition is full employment. The GDP is $400 billion (about R5.745 trillion), placing the Israeli economy at 19th in world, better than France, England, and even Japan. The budget deficit is 2.5%, meaning this is a world-class economy. Contrast this with our insignificance as 0.19 of a percent.”

This means it is economic opportunity that is getting people interested in Israel more than anything else. Reiss said although everyone seems familiar with Israel’s success in the hi-tech industry, it amounts to only 9% of Israel’s economy. “Every industry in Israel contributes to its economic success, not only hi-tech. Pepsi-Cola bought Israeli company Soda Stream for $3.2 billion (about R46 billion). That is not hi-tech. That’s water. It so frightened Pepsi that they bought it.”

From app creation to gaming, news to software, Israel succeeds in every industry. “If you add all these up, you can see why the shekel is strong,” said Reiss. “Israel is an economy with no natural resources. Our biggest resource is knowledge. People are not leaving their countries because of politics, but because there are jobs and opportunities available in Israel.”

People are behind Israel’s economic success, according to Reiss. “Finance is about the people,” he said. “People, tech and capital are the pillars of banking. Israeli banks have something to add to every part of the Jewish world, and their staff understand things with a Jewish head. The Israeli economy is human and makes use of Jewish heart and spirit.”

He said that every transaction focuses on the human element.

“In Israel, you can phone up a banker and find something to suit your needs based on your approved budget. When you’re not 100% sure about what you can buy, whether it’s worth it, what fees you can expect, there is someone to assist. It’s all about the people. They can navigate you through the system.”

Reiss concluded by stressing the need for Jews around the world to play a part in this success by combatting groups such as the BDS movement. “When you invest in a company in Israel, when you buy property in Israel, or when you use an Israeli service, you are engaging with the economy. There is no better answer to the BDS.”