In the video: the protesters are advancing on Kaplan, the police tried to stop the procession without success (Yenon Yatach)
Let's go ahead and say: the Israeli economy today is the strongest in the world, according to an examination of macro data that can be measured in an international comparison. The data are excellent: Israel's current account surplus in relation to GDP is 4.3%, similar to that of the efficient economic and technological power, the Netherlands, better than the German power 3.4%, only Denmark and Switzerland are in a better situation - Denmark with 15.2% and Switzerland with 11.7%.
That means most of the countries for economic cooperation and development, the OECD, are behind us: Great Britain with minus 3.1% and South Korea with minus 1.9%.
The latest figure for the entire Eurozone stands at minus 1.2% and that of the seven richest countries in the world is minus 2.2%.
The surplus in the current account is mainly due to the fact that a tenth of the workers, close to 390,000 workers in the high-tech industry, which Israel discovered and produces gas from fields in the Mediterranean Sea (despite subversive internal factors trying to prevent this) elite intelligence units and commando fighters who go into the private market after serving.
Those who are not economists are told that the current account is the sum of all capital flows between Israel and its trading countries, including services, goods and unilateral transfers between a country and its neighbor, including wage payments and profit flows for investments.
Naturally, the current account indicates the strengthening of the currency in a country where there is a surplus and usually forces central banks to low interest rates in order to prevent the currency from strengthening too much, which may harm the country's competitiveness, beyond the need to increase productivity through the creation of a strong exchange rate.
Suddenly, a swarm of economists came, most of them with an anti-Bibi agenda, and claimed, without a specific explanation, that the money and investments would flee Israel (Photo: Flash 90, Yonatan Zindel)
Tweet and run
Suddenly, a swarm of economists, most of them with an anti-Bibi agenda, warns against the reform of the judicial system and claims, without a single explanation, that money and investments will flee Israel.
Dabuka, maybe Dabuka, did not explain how the reform would harm and drive away investors, they only tweeted without elaborating.
So let's remind our dear friends that high-tech in Israel is growing and will stay in Israel, because at the moment there are huge research concentrations in the world: Silicon Valley in California, Massachusetts and the New England region in the western USA, Japan, South Korea, Germany, provinces in China and... still - Israel with the highest score.
Today there is not a self-respecting car company or technology company in the world that does not have a branch in Israel, that is why offices in Tel Aviv are also filled with lawyers and accountants in addition to hi-tech specialists, all aimed at serving the foreign companies that are thirsty for Israel's technological capabilities. Are we afraid of companies fleeing?
Where will they run?
To Ukraine, which was a subcontractor to Israeli companies, which these days is one year since the devastating Russian invasion, or to China, where it is not certain that the idea you brought up and the patent will remain in your sole possession?
Or perhaps to the shrinking Britain or to Germany which is in economic stagnation?
Israel's high-tech power is a byproduct of the military and intelligence systems located here in Israel.
What do the grumblers think?
Maybe the 8,200 unit will suddenly move to South Korea?
Or maybe the refuge is in California, away from the family during the Tishrei and Passover holidays?
Some of the threats claim that foreign companies will not invest in Israel, where will they invest?
In Ireland where the order of the day is drunkenness?
Even at the moment, the scope of foreign investments in Israel amounts to 227 billion dollars and another 186 billion dollars in Israel. In other words: whoever flees will lose the center and the know-how interwoven here between the companies vis-à-vis the companies investing from abroad.
Other companies are waiting in line to invest in Israel.
Israel is not the same poor country that it was at the time of the Gulf War when its net debt was 35% of the GDP, Israel has a net loan of 193 billion dollars in debt instruments, an amount that is 37% of the GDP, yes from minus 35% to plus 35%.
Yes, the world owes Israel a lot of money and Israel does not owe the world!
It is net of debts that are less than the debt instruments that the world owes to the Israeli economy.
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Dollar and euro: the world owes Israel a lot of money - and it is not Israel that owes the world.
An economic reality that must be understood (Photo: ShutterStock)
standing in line
The threats, perhaps mostly uninformed adults, are still traumatized by a weak Israeli economy with huge debts and difficulties in raising capital, no more.
International companies and lenders are lining up to invest in Israel.
Money seeks yield and profits, and here in Israel the biggest profits are in the bond market, with the state's excellent repayment capacity and credit rating -AA.
The credit rating companies examine other parameters: Israel had a budget surplus of 0.6% of GDP in 2022, one of the few in the world with such a surplus Not only that, the ratio of debt to GDP is already less than 60%, there are few countries with such an achievement such as Germany and Finland.
Where do you want to escape? To Singapore with a semi-totalitarian regime with a debt to GDP of 126%, maybe to Japan with a debt of 237% To GDP in addition to the difficulties of language and culture, or to Spain with a debt to GDP of 96%, or perhaps to Britain, which is economically retreating - with a debt to GDP of 81%, or perhaps to the promising USA with a debt to GDP of 107% and without government subsidies including tax discounts as is customary in Israel?
All these parameters are checked by the credit rating companies.
We will also remind all stuck-up economists that the credit rating is relative to other countries, the worse the situation of the world's economies, so is the situation at the moment because most of the world is in stagnation and retreat, the higher is Israel's credit rating and correspondingly, the attractiveness to invest in Israel increases precisely in 2023. What to do?
it's all relative.
The credit rating companies do not only examine the current situation but also the future, such as continuous growth capacity.
Israel has been doing this well since 2003, for twenty years - and the continuity is another point to Israel's credit.
While Israel has so far enjoyed growth thanks to the low price of energy (due to the discovery of gas deposits in the Mediterranean Sea) and the high-tech industry, in the last year and in the years to come another element has been added that the economists have forgotten, which also strengthens the Israeli economy, a fact that the credit rating companies will pay attention to: the huge demand For security, defense and offensive products, including military electronic systems, which most of the armies in the western world come to our door to purchase or rent, against the background of the war in Ukraine.
The war encourages Europe to purchase equipment in Israel and the tensions between China and North Korea and the Western countries in Southeast Asia, encourages purchasing and shopping and cooperation even from Japan, in addition to South Korea and from there to Australia.
The secret of the Israeli defense industry, the credit rating agencies see and will see, what no stickler for economists can see from its surface, an eye of hatred for Bibi.
Netanyahu and Levin.
There are sections in the reform that must be amended (Photo: Reuven Castro, without)
Change in reform
Undoubtedly, we must change the structure of the reform in the legal field, which the far-right government is pushing without seeing the consequences.
But contrary to the insistence of the economists, we will go into detail.
Changing the method of selecting judges is essential.
It has no equal in the world, that a guild of judges is a member of the committee for selecting judges in a member-brings-member examination.
This is nepotism that raises Cabs.
Not only that, nepotism means that there is no adequate representation for all strata in the Supreme Court, mainly it is the exclusion of Mizrahim.
The system needs the government and the Knesset, coalition and opposition, to choose the judges, not just the government.
The change that the government wants to make in the area of the superseding clause is very bad, superseding through only 61 MKs, is inappropriate - because any law that the Supreme Court rejects or changes can be immediately canceled using the superseding clause.
The override clause should be activated by a majority of 70-80 Knesset members, that is, by broad agreement.
The concern on this issue exists, when what needs to be worried about is a violation of property rights, which, if it happens, may exclude investments from here.
There is no way that Netanyahu - even though he is pushed into a corner - will allow the exclusion of property rights, this is completely contrary to his concept.
Right now there is a super right-wing and capitalist government ruling, whose finance minister is as extreme in this field as no finance minister has been in the past.
So what can investors fear?
At the end of November, the credit rating company Moody's updated its assessment method for the debt of the countries it covers.
It examines the volatility in the change in the scope of GDP growth from the trend line, the monetary and fiscal policy to the threshold of tolerable inflation, conducts a careful examination of the budget structure and its visible and hidden sections, in order to examine the government's debt trend, reviews the state's external debt in foreign currency, the financial assets of the country and adds a careful examination of how ESG factors are taken into account in actual policy.
As mentioned, one of the claims heard is that ESG must be taken into account, the quality of the environment for E, social and social for S and corporate governance for G, if you will Environmental, Social, Governance.
The requirement in the case before us, that in the state and its branches, in corporate governance, governance, there will be adequate representation for all layers of the population and its branches, in our case, that in the Supreme Court there will be representation for all branches of the population without discrimination due to color, sex, and social affiliation.
That is, the absurdity is that currently one group controls the Supreme Court, the diversity - which it is hoped that the current government will bring - will actually result in the strengthening of the corporate government, in our case the state.
As part of diversity, we hope to see a court with more Mizrahi and ultra-orthodox, something that will lead to a strengthening of Israel's credit rating.
As mentioned, the credit rating companies also examine the existing and expected inflation rates.
If the government persists in making the changes it has started, such as opening the economy to real competition before the world and even participates in reducing price increases initiated by the government in these crazy days in the world (as many countries in Europe are doing), the rating will actually strengthen. If the credit rating companies look at the unemployment rate , in Israel is close to friction and stands at about 3.8%-4.2% in the last few months.
Specifically in the area of E - environmental quality, the current government will receive a bad score due to the decision to cancel the taxation on disposable utensils. A progressive country is also required to carry out a variety of actions to remove waste There is also prevention of the accumulation of additional waste in all areas, while taking care of recycling.
Will a superseding clause be enacted by a tiny majority of 61 members of the Knesset for every decision of the Supreme Court, to which the victims of the ministers' activities will appeal? (Photo: Reuven Castro)
Will there be an investigation?
There is also corporate responsibility regarding the S, the social.
Investors are looking for companies and entities that promote ethics in the social and justice field, including diversity, decentralized communities, social justice and more.
Companies fighting against racism and gender discrimination.
The announcement by some of the heads of the banks in a meeting with the Prime Minister that certain entities have started withdrawing money from the banking system and Israel is illegal, according to the laws of the state, such changes should only be reported in Magna, which is a system of the Statutory Authority for Real Estate, through which every The information for distribution via the Internet of all the reports required by law, which are subject to the supervision of the Securities Authority.
Will the statements of some bankers that caused panic in the stock market be investigated by the Securities Authority or by the supervisor of banks or alternatively by the market authority the capital?
We will wait to see what the current legal advisers of the Treasury, the Real Estate Authority and the Legal Adviser to the Government will do.
Choosing legal advisors for government ministries is complicated, in recent decades the legal advisors in government ministries have partially become gatekeepers subordinate to the Attorney General. They examine the matter of proposals for changes, but in recent years out of excessive independence that sometimes led to the fact that government ministries or ministers could not dictate policy.
The government's current proposal is draconian, there is no obligation to accept that there will be legal advice that will be given to the ministers and will not bind them.
But the current situation in which ministers are sometimes excessively bound by the actual legal advisors (as mentioned: in the face of the proposed change, which is also bad), requires finding a reasonable way out of consultation, litigation and reaching an agreement. This issue is not at all easy to solve and may harm the functioning of the government ministries even in a severe way More than today. After all, the victims will turn to the courts, so what? Will a superseding clause be enacted by a tiny majority of 61 members of the Knesset for every decision of the Supreme Court, to which the victims from the activities of the ministers will turn?
Indeed it is not easy, but from here to the reduction of Israel's credit rating for its very strong economy, the road is long.