Crispian Balmer
By Crispian Balmer
Though voices are getting louder inside and outside Israel about the threat of economic boycotts for its continued occupation of Palestinian territories, there seems little prospect of it facing measures with real bite.
With a number of European firms already withdrawing some funds, Israeli Finance Minister Yair Lapid has warned that every household in Israel will feel the pinch if ongoing peace talks with the Palestinians collapse.
But investors and diplomats say they are not convinced.
It is true that some foreign firms have started to shun Israeli business concerns operating in East Jerusalem and the West Bank — land seized in the 1967 war — and the European Union is increasingly angered by relentless Jewish settlement expansion.
But the bulk of Israeli business is clustered on the Mediterranean coast, and not even the Palestinian leadership is demanding a total economic boycott.
“The boycott is being used like a bogeyman, a scary story you tell a child at night,” said Jonathan Medved, CEO of OurCrowd, a crowdfunding platform for Israeli companies.
“The truth is that Israel is a world leader in water technology, next-generation agriculture, cybersecurity, healthcare innovation and start-ups. What sane person is going to walk away from that?” he said.
Pro-Palestinian, or anti-Israeli, activists believe recent action by some European firms to distance themselves from Israel might be the start of something big.
In December, Dutch firm Vitens said it would not work with Israeli utility company Mekorot because of its West Bank footprint. The following month a large Dutch pension fund, PGGM, ended its investment in five Israeli banks because of their business dealings with settlements considered illegal under international law. Denmark’s Danske Bank blacklisted Bank Hapoalim for the same reason.
These moves sent a jolt through the Israeli government.
But EU diplomats say business with firms operating in the settlements represent less than one percent of all Israeli-EU trade, which last year totalled $36.7bn, up from $20.9bn a decade earlier.
Europe is not united on how to deal with Israel and has not yet even agreed to introduce EU-wide labelling to make clear if goods come from settlements, much less anything more radical.
“There is no EU boycott,” the president of the European parliament, Martin Schultz, said this month during a visit to Jerusalem during which he questioned whether the 28-nation bloc would want to penalise Israel if the US-backed talks failed.
EU governments say it is up to each firm to decide its own investment strategy. Some states, including Britain, Germany and the Netherlands, discourage links with the settlements, but there are no consequences for ignoring that steer, beyond the “potential reputational implications” a British Foreign Office agency warns of on its website.
The international Boycott, Divestment and Sanctions (BDS) movement seeks something much more emphatic, eager to turn all Israeli brands into toxic property as a way of forcing the government to roll back settlements and sign a full peace deal.
Omar Barghouti, the BDS co-founder, said he sensed a changing international atmosphere and was particularly buoyed by news of divestments from Israeli banks.
“We’re talking about a completely different league here. Forget boycotting settlements, (that is) peanuts. Targeting the banks, that’s where the money is, that’s the pillar of the Israeli economy,” said Barghouti.
However, divestment moves by the likes of Danske Bank appear to be the exception rather than the norm.
Germany’s biggest lender Deutsche Bank AG denied reports last week that it was set to boycott Israeli banks, while the giant Dutch pension fund ABP announced this month that after a review, it saw no need to cut ties with Israeli banks.
All the while, foreign firms continue to pour into Israel. According to the latest Bank of Israel data, direct investment was $10.51bn in the first nine months of 2013, up from $9.5bn for the whole of 2012. Exports to Europe rose 6.3 percent last year.
Global brands such as Google, Cisco, Microsoft, Twitter, Apple, AOL and Facebook have all invested in Israel, so, like it or not, users of computers, smartphones and apps could well be supporting Israeli engineering.
“All the talk about boycotts has not so far caused any damage to our economy,” Uriel Lynn, president of the Israeli Chambers of Commerce, said. “Israel has gone through much harsher boycotts in the past.... So we can definitely withstand boycotts.”
REUTERS
By Crispian Balmer
Though voices are getting louder inside and outside Israel about the threat of economic boycotts for its continued occupation of Palestinian territories, there seems little prospect of it facing measures with real bite.
With a number of European firms already withdrawing some funds, Israeli Finance Minister Yair Lapid has warned that every household in Israel will feel the pinch if ongoing peace talks with the Palestinians collapse.
But investors and diplomats say they are not convinced.
It is true that some foreign firms have started to shun Israeli business concerns operating in East Jerusalem and the West Bank — land seized in the 1967 war — and the European Union is increasingly angered by relentless Jewish settlement expansion.
But the bulk of Israeli business is clustered on the Mediterranean coast, and not even the Palestinian leadership is demanding a total economic boycott.
“The boycott is being used like a bogeyman, a scary story you tell a child at night,” said Jonathan Medved, CEO of OurCrowd, a crowdfunding platform for Israeli companies.
“The truth is that Israel is a world leader in water technology, next-generation agriculture, cybersecurity, healthcare innovation and start-ups. What sane person is going to walk away from that?” he said.
Pro-Palestinian, or anti-Israeli, activists believe recent action by some European firms to distance themselves from Israel might be the start of something big.
In December, Dutch firm Vitens said it would not work with Israeli utility company Mekorot because of its West Bank footprint. The following month a large Dutch pension fund, PGGM, ended its investment in five Israeli banks because of their business dealings with settlements considered illegal under international law. Denmark’s Danske Bank blacklisted Bank Hapoalim for the same reason.
These moves sent a jolt through the Israeli government.
But EU diplomats say business with firms operating in the settlements represent less than one percent of all Israeli-EU trade, which last year totalled $36.7bn, up from $20.9bn a decade earlier.
Europe is not united on how to deal with Israel and has not yet even agreed to introduce EU-wide labelling to make clear if goods come from settlements, much less anything more radical.
“There is no EU boycott,” the president of the European parliament, Martin Schultz, said this month during a visit to Jerusalem during which he questioned whether the 28-nation bloc would want to penalise Israel if the US-backed talks failed.
EU governments say it is up to each firm to decide its own investment strategy. Some states, including Britain, Germany and the Netherlands, discourage links with the settlements, but there are no consequences for ignoring that steer, beyond the “potential reputational implications” a British Foreign Office agency warns of on its website.
The international Boycott, Divestment and Sanctions (BDS) movement seeks something much more emphatic, eager to turn all Israeli brands into toxic property as a way of forcing the government to roll back settlements and sign a full peace deal.
Omar Barghouti, the BDS co-founder, said he sensed a changing international atmosphere and was particularly buoyed by news of divestments from Israeli banks.
“We’re talking about a completely different league here. Forget boycotting settlements, (that is) peanuts. Targeting the banks, that’s where the money is, that’s the pillar of the Israeli economy,” said Barghouti.
However, divestment moves by the likes of Danske Bank appear to be the exception rather than the norm.
Germany’s biggest lender Deutsche Bank AG denied reports last week that it was set to boycott Israeli banks, while the giant Dutch pension fund ABP announced this month that after a review, it saw no need to cut ties with Israeli banks.
All the while, foreign firms continue to pour into Israel. According to the latest Bank of Israel data, direct investment was $10.51bn in the first nine months of 2013, up from $9.5bn for the whole of 2012. Exports to Europe rose 6.3 percent last year.
Global brands such as Google, Cisco, Microsoft, Twitter, Apple, AOL and Facebook have all invested in Israel, so, like it or not, users of computers, smartphones and apps could well be supporting Israeli engineering.
“All the talk about boycotts has not so far caused any damage to our economy,” Uriel Lynn, president of the Israeli Chambers of Commerce, said. “Israel has gone through much harsher boycotts in the past.... So we can definitely withstand boycotts.”
REUTERS
