(photo credit: Sharona Mazlian Levy)
Israel is sitting on at least $150 billion in future revenues following the
discovery of vast offshore gas deposits, but it will not make the same mistake
as other countries and abandon its booming export industries, Finance Minister
Yuval Steinitz has told Reuters.
Speaking in Brussels, where he was on
his way to Paris for a meeting of Organization for Economic Cooperation and
Development finance ministers, Steinitz told the news agency, “I have said very
clearly: We won’t let those very good [oil and gas] discoveries kill our
exporting industries. We are not Kuwait; we are not Abu
“Human capital is still the most important capital for this
country,” he said. “The gas is just a nice addition; it’s not the main thing...
it’s really for the people’s benefit.”
I assume that we will decide to
put a lot of the money in some kind of sovereign wealth fund, an Israeli fund
that will invest elsewhere,” Steinitz said, adding that a portion would also pay
down government debt of about 75 percent of gross domestic product.
Minister Binyamin Netanyahu is slated to appoint a committee later this year to
advise on how to invest gas and oil revenues.
Two huge natural-gas
reservoirs have been discovered off the northern coast of Israel in the past two
years. Together, they are the two biggest deepwater gas discoveries in the world
in the past decade: Tamar, at 8.7 trillion cubic feet, which analysts believe
will be used primarily for domestic consumption; and Leviathan, at 16 trillion
cubic feet, which it is believed will turn Israel into a natural-gas
Drilling has so far only taken place in 20%-25% of Israel’s
territorial waters, Steinitz said in the Reuters interview. “There might be some
other discoveries as well,” he said.
On Wednesday, Steinitz spoke about
innovation and growth at the opening ceremony of the OECD conference, which is
being held in Paris to commemorate 50 years since the organization’s
Israel was accepted into the 34- nation organization for
developed economies last year.
“Innovating is the best way to utilize
human capacities in order to upgrade the value of human labor and natural
resources,” he told the conference.
“Small countries with limited natural
resources must put special efforts on innovation if they want to compete with
the giants. Hence it is mandatory for small countries like Israel to put special
emphasis on promoting innovation and R&D activities in order to develop
Steinitz said the Israeli government believes its most
important role is to function as a first-tier safety net. For those purposes, he
said, it has identified three main areas that need to be strengthened: linkages
between basic research and applied research; the need to mitigate the risks
taken when investing in preliminary research; and the need to increase
collaboration between national and international institutions.
also spoke about the importance of international cooperation.
understands the benefits of differing world views,” he said, and recent R&D
cooperation deals with foreign countries and large multinationals “will assist
in building strong links between innovative partners, while integrating
research, higher education and industry.”
Later, Steinitz presented OECD
Secretary-General Angel Gurria with an enlarged copy of a stamp Israel will
produce in September to mark the organization’s 50th anniversary.
contributed to this report.