Let us celebrate an important partnership

Governments all round the world are facing difficult decisions about how to get their budget deficits down – in the United States, in Britain and here in Israel, too.

By EDD BALLS
Yair Lapid at Cabinet Meeting, looking official 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Yair Lapid at Cabinet Meeting, looking official 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
Governments all round the world are facing difficult decisions about how to get their budget deficits down – in the United States, in Britain and here in Israel, too.
In all our countries, we are debating how to boost economic growth and ensure that the burden of the tough choices that are needed is fairly shared.
But while domestic budget debates here in Israel are contested with vigor and passion, it is hard for a British visitor not to look on with some envy.
Because with inflation low, national debt falling, real wages rising, and growth forecast to be above 3.5 percent this year and next, Israel has a markedly stronger economic platform from which to build.
And with its famously entrepreneurial culture, high levels of civilian research and development and the largest concentration of business start-ups anywhere outside Silicon Valley, the Israeli economy looks well placed to go from strength to strength in the years ahead.
I am writing this column in Tel Aviv, while on an inspiring and challenging visit to Israel and the Palestinian territories.
And it is clearer to me than ever, at a time when we in Britain badly need to grow our economy out of its current difficulties, that we have a huge amount to learn from Israel’s innovators, investors and entrepreneurs.
I was pleased to meet Finance Minister Yair Lapid to discuss our shared challenge of keeping government spending under control while boosting economic growth. I was also delighted to meet with senior members of the Labour Party, with whom I discussed how, as we make very difficult cuts, we can create an economy that works for the many, not the few.
Here in Israel there are clearly strong arguments across the political spectrum. But what is striking to British visitors is the strong partnership between private and public sectors that is driving up investment and growth and fostering Israel’s economic success.
The conclusion I draw from the Israeli experience is that a strong and active partnership between businesses, universities and government is the right way forward – not a laissez-faire standoff and a race to the bottom on investment, standards and skills.
Let us celebrate, too, a second and equally important partnership – the economic partnership between our two countries. Britain is now Israel’s biggest export market in the world after the US, with two-way trade in goods and services now over $8 billion a year. So I was greatly encouraged to visit our UK ambassador’s Hi-tech Hub in Tel Aviv, which is bringing Israeli and British businesses together.
Too often in the UK, when our bilateral relations are discussed, loud voices from the margins of the debate disproportionally skew the conversation with calls for boycotts of Israel. In the British Labour Party, we reject boycotts and those who seek to weaken economic, trade union, intellectual and cultural ties.
Despite the difficulties Israel has faced, and continues to face, I want to see Israel celebrated in Britain as a modern economy with a liberal democracy, which stands out in a region in which too many peoples’ rights are denied.
That is why last year, speaking at the Labour Friends of Israel Annual Lunch, I announced the launch of the Labour UK-Israel Economic Dialogue in order to strengthen our vital bilateral relationship.
My shadow cabinet colleagues and I are sure that Israel’s experience of growth and entrepreneurialism contains many lessons for how a Labour government in the UK can support innovation and economic growth.
And during my visit, I have been determined to ensure that everyone we meet has heard an important message: those of us who seek progress and peace want to see relations between Britain and Israel strengthened, not weakened – and relations between Israelis and Palestinians strengthened, too.
My visit is also about how we can foster a third and vital partnership – a partnership for peace. Six years ago, I co-authored a report, commissioned by the British government, on how the international community can help support deeper economic relationships between Israel and the Palestinian territories – and help lay the groundwork for the two-state solution that we in the British Labour Party strongly support.
I fervently hope that US Secretary of State John Kerry will succeed, despite the great challenges ahead, in bringing the Israeli and Palestinian leaderships together. It will require determined effort, leadership and tolerance on all sides.
The good news is that I am seeing first-hand what can be achieved when all sides work together. Because during my visit to the West Bank, I am also meeting with Palestinian businesspeople building the new city of Rawabi, near Ramallah, the largest private sector project in Palestinian history.
This week I have seen the potential economic benefits to the UK of closer relations with Israel, and I hope that, as the political situation improves, more Israelis and Palestinians can prosper from coming together in this way.
Any peace agreement will be rewarded by a massive economic dividend for both sides. Yet another reason, should it be needed, for us to all work together tirelessly to achieve it.
Ed Balls is a Labour MP and the British shadow chancellor of the exchequer. He is visiting this country as part of a Labour Friends of Israel delegation.