Israel should not invest its natural gas revenues in foreign markets as planned, but in domestic “social-environmental causes,” lawyer-businessman Shraga Biran argued on Tuesday.

Biran, who heads the Institute for Structural Reform – a nonprofit that does legal economic research into social issues – was speaking during the annual “Environment 2050” conference in Tel Aviv.

“You need to find a social fund that will help this generation and the future generation,” he said.

Biran was participating in a panel on the country’s sovereign wealth fund for natural gas profits. The cabinet approved the creation of such a fund – which calls for the investment of the expected $125 billion of profits in foreign markets – in April 2013.

Second- and third-reading approvals in the Knesset Science and Technology Committee followed this January.

Many have argued that a failure to invest the revenues in foreign funds will cause Israel to suffer from “Dutch Disease” – a phenomenon in which a large, unexpected increase in revenues from resources causes a sharp appreciation in the exchange rate and thus prompts a decrease in the production and competitiveness of the commercial sector.

However, Biran and his colleagues at the Institute for Structural Reform maintain that Israel’s gas revenues will not likely be high enough to cause serious symptoms of Dutch Disease, as the gas revenues will amount to less than 1 percent of the gross domestic product per capita.

Former Bank of Israel governor Stanley Fischer and Energy, Water and National Infrastructures Minister Silvan Shalom, among others, have voiced strong support for the establishment of a sovereign wealth fund according to the Norwegian Government Pension Fund Global model, which invests profits in foreign markets.

Yet a study that Biran and his colleagues have published argues that such a decision is incorrect due to the economic disparity between Israel and Norway.

At Tuesday’s conference, he went so far as to call the legislation for the fund “an anti-social bill,” explaining how risky investing the money in Wall Street or other markets might be should a financial crisis occur. Instead, he said, the money should go directly to scientific and educational development programs in order to solve poverty problems in Israel.

“We don’t need to invest in speculative wealth, but in our wealth,” he said.

Since gas profits would not even be heading into the fund until at least 2017, when exports are slated to begin, he also accused government officials of moving too quickly to approve the legislation.

Amit Bracha, executive director of Adam Teva V’Din (Israel Union for Environmental Defense), agreed that the future destination of gas revenues merited “a vaster discussion.” Nonetheless, he said he could not totally agree with Biran’s opinions, as constant research had shown that the Dutch Disease could, in fact, pose a real threat to Israel.

Most importantly, however, all investments should be in entities that comply with environmental standards, act responsibly and perform due diligence, Bracha explained.

“If we take from the environment, we need to give back to the environment,” he said during the panel session.

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