Israeli Ambassadors: “Economic Investments Are Also Central To National Security and the Political Field”

Israeli ambassadors identify the promotion of economic relationships at the highest level as a central pillar of their work, which can also assist them in advancing political relations. In a meeting with The Marker, they break their silence about the calls for boycott of goods from Israel, and talk about the struggle against them.

Israeli ambassadors abroad no longer view the development and strengthening of economic and business relations with countries in which they are stationed as a lesser goal than developing and strengthening political relations with them. On the contrary, according to them, a combination of the two goals allows them greater efficiency in attaining the political objectives for which they are responsible. The economic interest that they create in Israeli technology, for example, assists them in pushing aside calls for the boycott of Israel. The ambassadors work closely with the commercial attachés of the Ministry of Trade, Industry and Labor and the commercial attaches of the Ministry of Finance. According to them, the contribution of the ambassador is in opening doors at the highest levels, which the attachés do not reach.

In several of the countries in which there exists a close connection between the business and government sectors, such as in China, a senior political authority involved in promoting businesses has double importance. However, even in competitive states such as France, in which business people are photographed more often on the President’s airplane before a joint flight than in front of their factories, the ambassador has substantial weight in promoting business.

In a meeting convened recently by The Marker, participants included the Ambassador to Britain, Ron Prosor, Ambassador to France Daniel Shek, Ambassador to Colombia Meron Reuben, the Consul Generalin Shanghai, Jackie Eldan, the Consul General in Boston Nadav Tamir, the Consul General in Mumbai Orna Sagiv; and the Deputy Director General of Economic Affairs in the Foreign Ministry, Irit Ben Abba .

In June 2008, a meeting was conducted amongst more than 100 senior officials of British Telecom (BT) and representatives of 19 Israeli communications startups, in an attempt to create business partnerships. “I opened the door to the BT CEO, Iain Livingston,” said Prosor. “After the meeting with him, things began to roll,” he added, and did not forget to give credit to the commercial attaché in London, Gil Erez, “who does excellent work.”

And indeed, this week BT joined a corporate agreement with the Chief Scientist of the Ministry of Industry, Trade and Labor, in the framework of which BT will cooperate with Israeli start-ups with the joint funding of both bodies.  

The model for imitation for Prosor is Dick Cheney, Vice President under President George Bush. “Dick Cheney called Efraim Sneh, who at that time was the Minister of Transportation, and spoke with him about the importance of purchasing Boeing airplanes (made in the United States—O.K.) and not Airbus (made in France—O.K.). Sneh had no choice—he understood what decision he would make,” said Prosor.

“For years I have been trying to recover from that,” said Shek, the Ambassador to France. “I saw Martin Indyk, the former American ambassador to Israel, working to open government tenders for cars in Israel for American companies. That is the model,” he added. Shek also has a practical suggestion. According to him, representation abroad costs money and it is possible to also measure its success quantitatively—in money that it brings in as a result of business partnerships. According to him, embassies must cover the costs of their upkeep in this way, and the ambassador must be at the front of this venture.

Legislation against Boycott

2009 was characterized by two crises on the diplomatic-economic front of Israel. The global economic crisis reduced Israeli exports by approximately 20 percent. Additionally, in the wake of Operation Cast Lead in the beginning of 2009, and the lack of progress in political negotiations, the pressure of pro-Palestinian groups on consumers throughout the world to boycott Israeli goods increased. These pressures appeared, amongst other places, in Britain, South Africa, France, Turkey, Dubai, the United States and Malaysia.

They included calls for a consumer boycott on a variety of goods, from food and drink in supermarkets through communications equipment of Motorola, security equipment from Elbit Systems and diamonds from the upscale shops of Lev Leviev. Up until now, and under the pressure of industrialists, Israeli public relations swept calls for boycott under the carpet, with the assumption that it is best not to talk about it, as all publicity is liable to increase the phenomenon. On this background of denial, the willingness of Shek and Prosor to talk about how they deal with the calls to boycott Israel is remarkable.

Shek: “Paris is ‘London light’ from the perspective of calls for boycott. It is impossible to say there are no attempts to impose a boycott. In France they are focused on economic issues, whilst in London the boycott is also academic and cultural. In France it is completely marginal from an economic perspective, although it has a most substantial impact on image. Every few weeks bullies enter the supermarkets in order to throw crates of avocados and yell at clients not to purchase Israeli goods—this will not diminish the work of Agrexco in France, but it could cause an accumulative damage to Israel’s image. I perceive the role of ambassador to preserve a supportive environment for industrialists and exporters. This therefore provides a wide spectrum for public relations work. In a country in which the general atmosphere toward Israel is positive, exporters have a better chance of succeeding. I therefore do not disregard the implications, and we initiative several actions that the embassy coordinates but does not lead.

“For example, we get help from organizations such as chambers of commerce and friendship organizations and do not let this pass without a response. We enjoy a supportive legal environment as France has stringent legislation against boycott, and we encourage organizations to sue those who organize boycott. We conduct political activities in the embassy directly with ministers, organizations, students and consumers, who are waking up. This is being created. Along with this, we are careful not to go too far, as at the moment this does not have broad media exposure and I don’t want to be the one who provides a critical mass to break through to the general public opinion.”

Prosor: “In Britain, the subject of the academic and cultural boycott was expressed in the Edinburgh Festival, boycotts by trade unions or calls for boycott. This is a most important topic, as, from my perspective, it is a snowball that must be stopped with intelligent and focused actions before it becomes too large, without providing it media exposure. We view this in its entirety. Today the atmosphere against Israel in Britain is such that actions must take place everywhere in order to allow a healthy working atmosphere. There is a relationship between good economic relations and the impact of the boycott. We see differences in Wales and Scotland. In Wales, through focused work of the embassy, we succeeded in creating cooperation in the field of medical equipment and water between Israeli and local companies. It is clear that when one focuses on an area with economic advantages and makes connections with Israeli industry, surrounding issues have a lesser impact.

“Apart from calls for boycott from trade unions and additional groups, in practice there was no damage done to Israeli exports. There are calls to boycott Israel and there are sporadic actions, including in supermarkets. One month ago, the British government decided to tag products that come from settlements, and this decision is not being implemented. The calls to boycott the Eden Water factory in Scotland (from the end of 2008) have not at this stage actually harmed sales, and we are working so that sales will indeed not be hurt. At the moment, I do not see the boycott harming Israeli exports, but we must be prepared.”

Tamir: “The economic aspect creates a discourse different than the political discourse. When we hold events at MIT or Harvard on subjects related to Israeli innovations, we create a positive discourse about Israel, which pushes the political aspect to the margins.”

The Israelis Return

Tamir: “We learned that economic investments are a central component of national security, with which we must deal and which transform us into most important players in the political field. It is possible to create synergy amongst all of the fields, but the economic one is central.”

“For example, Edward Markey, a member of Congress who focuses on the environment and alternative energy, is important to the Israeli representatives in political fields. With the mediation of the embassy, he invited Shai Agassi to a hearing in his congressional committee. We now expect that in the future it will be easier to promote political matters with Markey.”

Ben Abba: “If possible, we must create events or interest in the world in singular Israeli products. In China and India this is most strong. This is how a critical mass is created that says ‘we want the technology—and it doesn’t matter if it comes from Israel.’ This is our task in the Foreign Ministry, to promote the most advanced technology.”

In hindsight, while 2009 chased a majority of the Israeli investors from India, it was also a time in which, through tax arrangements, tens of Israelis, some of whom are quite wealthy, returned to Israel from London and Shanghai. Those returning include Saul Zakai, Arnon Milchan, Sami Ofer, Shai Agassi, Yoav Gutsman and Teddy Sagi.

“In the past two years, I have not encountered new Israeli investments in India,” said Sagiv. “At the moment there are investments of Israelis in India at about US$3 billion. The most prominent are Moti Ziser in real estate, agriculture and life science and Meshulam Levinstein in real estate. In the first three quarters of 2009, there was a decline of approximately 40 percent in exports to India and 35 percent in imports from it. In the past year, we attempted to support exporters through the Shavit Programme (implemented by an export institute with government funding).”

 Israeli innovation

Trade with France also declined—a more moderate 20 percent—but at the same time interest of large French companies in investments in Israel grew. “There are new French companies that are interested in entering Israel, and we will feel this in the coming two years,” said Shek. “It began with Renault. Renault is extremely proud that Israel will be the first country in which its electric cars will be marketed. Additionally, a subsidiary company of the French electric company, which focuses on alternative energy, is beginning to compete in solar tenders in Israel.”

The warm connections between the community of life science of Israel and Boston cooled off during the crisis and there was a sharp decline in American investments in Israeli companies, but there is compensation from different directions. “With us, the matter is strategic partnerships and investments,” said Tamir. “In 2009, a substantial decline in investments was felt, but there is significant interest in Israeli innovation, primarily in the areas on which the United States places emphasis, like alternative energy, in addition to security and life science.”

In China the crisis harmed the work of Israeli chip and electronic companies. According to Eldan, although in the second half of 2009 orders of large scope returned, some of the Israelis who left with the closure of the production lines did not return to Shanghai when they were reopened.

In 2009, Israeli companies began to discover the market of South America and Colombia. Telrad sent a permanent representative to Colombia and the Merhav Company implemented the largest investment, of US$250, in establishing a factory for producing ethanol from sugar with a Brazilian partner.

The defining characteristic of the Israeli business community in Britain was “returning home.” According to Prosor, the economic crisis, the change in British taxation and the rapid change in Israeli taxation policies created “a fairly massive exodus” of senior business officials who are returning to Israel.

This article appeared in The Marker on Wednesday 27 January 2010. Translated from Hebrew by the Alternative Information Center (AIC).