Israel’s Economy Endures Global Economic Meltdown
Yoram EttingerStraight from the Jerusalem Boardroom #174, January 04, 20131. Israel’s 2009-2012 economic growth of 14.7% leads the OECD countries, ahead of Australia – 10.7%, Canada – 4.8%, USA – 3.2%, Germany – 2.7%, France – 0.3%, Euro Bloc – 1.5% decline. Israel’s growth was undermined by the stoppage of natural gas supply from Egypt, which requires the acquisition of more expensive sources of energy (“Israel Hayom”, Jan. 2, 2013).
2. Israel’s 2012 economic growth, 3.3%, leads the OECD countries which average 1.4% growth, ahead of the US (2.2%), Canada (2%), Japan (1.6%), Brazil (1.5%), Germany (0.9%), France (0.2%), Britain (0.1% decline), Spain (1.3% decline) and Italy (2.2% decline), trailing India’s 4.5% and China’s 7.5% . Israel’s growth per capita, 1.5%, exceeds OECD’s average of 0.7%. Israel’s unemployment, 6.9%, is lower than the OECD (other than Germany’s and Japan’s) which averages 8%. Israel’s private consumption increased 2.8%, compared with the OECD average of 1%. Notwithstanding the global meltdown, Israel’s exports grew 1% at a time when most countries experience a substantial decline in exports (Globes Business Daily, December 31, 2012).
3. Israel’s 2012 tourism – all time high of 2.9 million tourists, compared with 2.8 million in 2011. American tourists lead the pack, ahead of Russia, France, Germany and Britain. Domestic tourism grew 3% (Ma’ariv, December 25).
4. Australia’s $30BN Woodside Petroleum (WPL) is acquiring 30% of the rights of Israel’s Leviathan offshore natural gas field licenses for $696MN upon signing the agreement in February, 2013, $200MN upon launching exports, $350MN upon final decision to invest in liquefied natural gas export facilities, 11.5% royalties up to $1BN and $50MN for immediate oil exploration underneath Leviathan. Woodside explores investment in additional Israeli offshore natural gas licenses (Globes, Dec. 4).
5. The $1.6BN Minnesota-based Stratasys merged with Israel’s $1.4BN Objet (3D printers manufacturer), a week following the acquisition of Israel’s Retalix, by NCR, for $800MN. Objet’s market value before the merger was $634MN (Globes, Dec. 4). The $10BN Wollingford, CT-based Amphenol acquired Israel’s Tel-Ad for $65MN; the US storage giant, EMC, made its 5th Israeli acquisition, More IT Resources, for $15MN. EMC employs 1,000 persons in its Israeli research and development centers (Globes, Dec. 3). Israel’s CrossRider was acquired by an overseas unidentified company for $37MN (Globes, Dec. 17). The Menlo Park-based Greylock Venture Partners and the Palo Alto-based Norwest Venture Partners led a$12MN 1st round of private placement by Israel’s ScaleIO (Globes, Dec. 11).
6. Google inaugurated its Israeli Start Ups Incubator, signaling its aim to expand its Israel operations (Globes, Dec. 11).The Holland-based Philips announced the establishment of a new research & development center in Israel, which will employ scores of scientists and engineers. Philip’s research & development center in Haifa – which coordinates special applications developed in Israel the US, Holland and India – employs 600 persons, specializing in CT 3D imaging (Globes, Dec. 13).
7. Electricite’ de France’s (EDF) renewable energy unit inaugurated its first three projects in Israel’s Negev – a $65MN investment. EDF plans additional ventures in Israel, demonstrating its confidence in the viability of Israel’s economy (Globes, Dec. 19).
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