Israel Advanced Technology Industries co-chair Erez Tsur.
(photo credit: PR)
The unprecedented initiation of repeat elections for the Knesset brings a “real fear of economic paralysis,” according to one of Israel’s key industry leaders.
“Everyone knows that political instability means economic instability,” Erez Tsur, co-chair of Israel Advanced Technology Industries (IATI), told The Jerusalem Post.
“Our colleagues from abroad and foreign investors have expressed deep concern regarding what is happening now. When investors see less stability here, it can prevent critical investments and acquisitions, impacting the industry.”
According to a recent report published by IATI – the leading umbrella organization for hi-tech, life science and other advanced technology industries in Israel – more than 95% of investments in Israeli venture capital funds come from abroad.
“Israeli companies work globally, because the local market is small. Approximately 45% of Israel exports come from hi-tech industries,” said Tsur.
“Look around the world and you can see dozens of articles on the subject of repeat elections. In every place, the elections are represented as problematic.”
Echoing the concerns of organization members, IATI issued an ultimately unsuccessful warning to lawmakers on Monday, calling new elections an “utter waste” of needed finances.
The association estimates that repeat elections will cost the economy as much as NIS 2 billion, also highlighting the economic impact resulting from another paid national holiday on Election Day.
“We ask ourselves if the political disagreements were truly so wide as to be impossible to bridge, to require such use of resources and lead to this instability,” said Tsur.
“Our concern is real, widespread and non-partisan. It’s not related to any political party, but to the instability of the system and the entire nation.”
In addition to the direct and other associated costs of holding elections, Tsur also expressed the business community’s frustration at the continued political paralysis caused by repeat elections.
Tsur cited several legislative proposals currently supported by IATI that are intended to benefit Israeli industry, including matters of cybersecurity and investments in innovation, but which will remain frozen until at least a new government is formed toward the end of the year.
“Legislative proposals which are important for both the hi-tech industry and the country will now be stuck, probably for three-quarters of a year,” Tsur said.
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