Scenarios with Obadiah Mailafia

January 25, 2021

Next year in Jerusalem

Next year in Jerusalem

By Obadiah Mailafia

The German Kaiser once asked his Chancellor, Otto Von Bismarck: “Can you prove the existence of God?” Bismarck was supposed to have replied: “The Jews, your majesty. The Jews.”   The return of the Jews to the Land of Promise after 2000 years of dispersal is a miracle of our times. Hebrew, a virtually dead language, has been resuscitated. It is the national lingua franca.

The Jewish genius has continued to astonish the world. Nearly 70 percent of all science Nobel laureates are Jewish. They include such legendary names as Albert Einstein, Niels Bohr, Max Born, Igor Tamm, Lev Landau, Richard Feynman, Vitaly Ginzburg, Ilya Prigogine, François Jacob and Ada Yonath. In economic science, the Nobel laureates include such giants such as Paul Samuelson, Wassily Leontieff, Milton Friedman, Herbert Simon, Franco Modigliani, Robert Solow, Gary Becker, Robert Fogel, Myron Scholes and Robert Merton.

Albert Einstein was offered the Presidency of Israel in 1952. He politely declined, saying: “All my life I have dealt with objective matters, hence I lack both the natural aptitude and the experience to deal properly with people and to exercise official functions”. The prize went to another Nobel scientist, Chaim Weizmann. Nature has certainly endowed them with talents way beyond their numbers.

What are the lessons to be learned from the world’s premier start-up nation?

First, a strong sense of nationhood and destiny. Israel was born in adversity and sustained by hope. To survive, they had to evolve a strong sense of national identity rooted in Zionism and the humane ethics of Jewish civilization. Israel is a Jewish State. But it is also a multi-ethnic democracy, in which 20.95% of the population are Palestinian Arabs.

They have full rights as citizens, but they cannot serve in the army. This sense of national destiny is reinforced by mass mobilisation and compulsory military service for young men and women from age 18. Most adults are military reservists who can be mobilised for war at the shortest notice.

Second, agrarian transformation. Through the kibbutzim movement, the foundation was laid for agrarian self-sufficiency. Israel is not only self-sufficient in food; it is a major exporter of agricultural produce. Through their innovative drip-irrigation system, they have reclaimed the desert into vineyards of prosperity. The country is a major exporter of fish, citrus and other products.

Third, human capital and innovation. Israel’s chief wealth is its people. The government has invested massively in human capital as the key to national development. There is universal success to health care. Israel is at the forefront of the campaign to find effective vaccines against COVID-19. The country has excellent schools and universities.

Institutions such as the Hebrew University of Jerusalem, Technion, Tel Aviv University, University of Haifa and Weizmann Institute of Rehovot compare favourably with the best universities in the world. Israeli education places a premium on the STEM disciplines. Israeli R & D has led to technological spin-offs in sectors such as medicine, robotics, computer science, telecoms, avionics and defense.

Dan Senor and Saul Singer have written a bestseller, Start-Up Nation: The Story of Israel’s Economic Miracle (Hatchette, 2009). It showcases the impressive achievements of the country in technology and innovation. Israel today has more companies listed on NASDAQ than any other county outside the United States. Venture capitalists have invested more in Israel than in Singapore, India, South Korea and the EU.

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In 2018, Israel spent a whopping $16.47 billion on R & D alone. In 2020 Israel came top globally on the list of the five most important countries in terms of R & D spending as a proportion of GDP, which in that year stood at 4.95 percent. Trailing behind were South Korea (4.81 percent); Switzerland (3.82 percent); Sweden (3.10 percent); and Japan (3.26 percent).

An American journalist, Jason Gerwith, has written a fascinating book, Israel’s Edge (Gefen, 2016).   It examines the role of Israel’s rather secretive Talpiot project of recruiting and training scientific geniuses for its military-industrial complex. It has given the country a lead in terms of military capability. The government is strongly committed to helping ex-servicemen to develop technological and other business start-ups that have made the country gloriously rich.

Fourth, macroeconomic stabilisation and institutional reforms. During the eighties, Israel was a high-inflation, slow-growth economy. The government embarked on ambitious reforms to stabilise the economy while strengthening the relevant institutions to ensure long-term sustainable growth. Israel enjoys a high level of state effectiveness. The central bank is world-class. The civil service delivers. The justice system is effective. Corruption is rigorously punished without regard to station or rank. In December 2010, for example, former President Moshe Katsav was sentenced to seven years in prison for corruption. Former Prime Minister Ehud Olmert was convicted and served 18 months for several felonies.

Fifth, foreign investment and partnerships. Israel’s liberal, open economy provides a robust eco-system for FDI. Silicon Wadi, outside Tel Aviv, is second only to Silicon Valley in terms of the number of technology firms. Apple, Google, Microsoft and Facebook have a strong presence in Silicon Wadi. Through the Law of Return, known as the Aliyah, Jews all over the world have a Right of Return to the Holy Land. Succeeding waves of immigrants have brought with them new ideas, talents and networks. Israel also leverages on its Diaspora networks and partnerships with the USA, Germany, Singapore and other countries.   In August 2020, the Abraham Accords Treaty was signed between Israel, the Gulf States and Bahrain, signaling gradual normalisation of relations with the Arab world.

Sixth, quality leadership. Israel has been blessed with great leaders. The first Prime Minister, David Ben-Gurion, was a statesman of vision and courage. Then we have the likes of Golda Meir, Menachem Begin, Yitzhak Rabin and Shimon Peres. Peres, for example, was a precocious shepherd boy from a rural kibbutz with no college education. His leadership potentials however brought him to the notice of Ben-Gurion who took him under his wings as a protégé. Peres held several top government positions before becoming Prime Minister in 1995. He was noted for his great passion for technology and innovation. He was once quoted as saying: “Israeli children should be taught to look to the future, not live in the past. I would rather teach them to imagine than to remember.”

Credit must also go to the current Prime Minister Benjamin Netanyahu. An engineering graduate and an MBA from MIT, Israel’s youngest and longest serving Prime Minister understands both technology and business. A hawk in defense matters, he has sought peace out of a position of strength, not weakness. His leadership has undoubtedly brought security as well as prosperity to Israel.

In the 1960s Israel opened up diplomatic relations with many African countries. Technical cooperation agreements were reached in areas such as education, agriculture and infrastructures. Israeli companies were operating in many of our countries. However, by the late seventies, Israel began to pull out from Africa. One factor was the boycott by several OAU member states, particularly the Arabs of North Africa, following the Yom Kippur War of 1973. The other was the aftermath of the 1976 Entebbe Raid which felled Jonathan Netanyahu, elder brother to Benjamin Netanyahu.

In July 2016, in commemoration of the fortieth anniversary of the Entebbe Raid, Prime Minister Netanyahu visited Uganda and Kenya; bringing with him business people and investors. In June 2017, Prime Minister Netanyahu addressed the ECOWAS Summit in Monrovia. For reasons that remain unclear, Nigeria did not attend that historic summit.

The world has changed. There are lots of mutual benefits to be gained from cooperation between Africa and Israel. Africa needs Israeli capital, technology and savoir-faire. Israel needs our natural resources and markets. Nigeria will benefit greatly by scaling up its business relations with Israel. Next year in Jerusalem!

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