Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
Straight from the Jerusalem Boardroom #194, May 16, 2014
1. Intel is investing, additional, $6bn in its Israeli research & development centers and manufacturing plants, which currently employ 9,800 persons, expecting to add 1,000 employees, mostly in R & D. The current $3.5bn annual export by Intel – out of Israel – is expected to rise by $1bn-$2bn annually. Intel’s annual operation cost in Israel is $1bn (Globes Business Daily, May 1, 2014). The California-based pharmaceuticals giant, Hyperion, is acquiring Israel’s Andromeda for $570mn, which consists mostly of milestone payments (Globes, April 25). Pratt & Whitney (a subsidiary of the $108bn United Technologies) acquired 51% of Israel’s Lehavim – thus controlling 100% of the company – for a few hundred million dollars (Globes, May 2). Germany’s media tycoon, Axel Springer, acquired Israel’s Yad2 for $230mn (Globes, May 8). The San Diego-based giant, Qualcomm, is expected to acquire Israel’s Wilocity for $300MN. Currently, Qualcomm owns 13% of Wilocity, along with the Silicon Valley’s Tailwood Venture Partners (19%), Benchmark Capital (19%) and Sequoia Capital (19%), Cisco (4%), etc. (Globes, May 12).
2. The fiscal responsibility and growth of Israel’s economy is attested by the continued declining ratio of public debt to GDP: 66% in 2013, compared to 67% in 2012, 82% in 2006, over 100% in 2002. The 2013 OECD’s ratio was 108.5%, G20 – 115%, USA – 106%, Japan – 243.5%, Britain – 92%, Germany – 80%. Israel’s budget deficit during the year ending in April, 2014 was 2.5%, the lowest in five years (Globes, May 14). Israel’s unemployment rate during the first quarter of 2014 – 5.8%, compared to 6.2% and 6.7% during the same period in 2013 and 2014, and compared to the OECD average unemployment of 7.5% (Globes, May 1). According to the OECD, Israelis’ life expectancy is 82, 8th among the developed countries, higher than the OECD average of 80 (Israel Hayom, May 7).
3. According to the Colorado-based Global Risk Insights, April 30, 2014, “[Israel’s] Leviathan gas field is the largest discovered natural gas repository since the turn of the 21st century. [It is] the latest in a string of oil discoveries in the eastern Mediterranean that should allow Israel to become a significant exporter of natural gas over the next decade… [Leviathan] holds 19 trillion cubic feet (tcf) of natural gas. Combined with other recent discoveries, the Eastern Mediterranean boasts more than 40 tcf of natural gas, expected to meet Israel’s domestic natural gas needs for at least the next quarter century. Demand for gas within Israel has grown as much as 17% as local business booms…. An initial natural gas agreement withJordan is set to last 15 years, with exports due to begin in early 2016…. New potential agreements with Egypt, Turkey and Cyprus can help extend the reach of Israeli gas across the Mediterranean, even to Europe and Asia…. In light of the recent unrest in Ukraine, Turkey is seeking to lessen its reliance on Russian gas, which accounts for 67% of its total natural gas imports. Turkey is currently in talks with the Leviathan consortium to build a sub-sea pipeline connecting Turkish liquid natural gas facilities with Israeli gas fields…. Turkey would provide Israel with a potential link to the greater European energy market. Ten companies have already presented pipeline construction offers.”
Wishing you Shabbat Shalom and a rewarding weekend,
Yoram Ettinger, Jerusalem, “Second Thought: A US-Israel Initiative”