Israeli hi-tech threatened by diplomatic success it created

Bahrain economic summit showcases Israel's hi-tech industry

July 15, 2019 22:46
4 minute read.
woman hi tech tel aviv

A woman walks near high-rise buildings in the hi-tech business area of Tel Aviv. (photo credit: REUTERS/AMIR COHEN)

The economic summit in Bahrain organized by the Trump administration last month was the latest example of how Israel’s hi-tech industry created new diplomatic opportunities for a country with no apparent natural resources. While Israel had no official representatives, its government was there in spirit. The entire scheme fits Prime Minister Benjamin Netanyahu’s theory of power, by which he hopes to bypass the Palestinian issue and build new alliances based on realpolitik and interests. However, it appears this theory could undermine Israeli hi-tech itself.

Israel’s newly found diplomatic status, built on Netanyahu’s theory, takes advantage of global changes in technology and the rising field of cybersecurity. It replaces the belief that Israel is part of the problems of the Middle East with a paradigm in which Israel provides domestic and security solutions to countries in the region and around the world.

This is a drastic change. In 2011, Ehud Barak warned Israel would face a “diplomatic tsunami” due to the Palestinian deadlock. While the West needed Saudi oil, countries ignored laws forbidding women from driving and engaged with Saudi Arabia despite its abysmal record human rights record. Israel did not have that coveted commodity, and the West demanded it adhere to unparalleled standards of human rights as a precondition for business, trade and acceptance.

Since 2011, the Iranian nuclear threat has grown and forged new alliances. ISIS emerged and terrorist attacks shook Brussels, Manchester and other European cities. Governments turned to Israel to learn how to fight terrorism back home.

At the same time, the world began paying attention to Israel as the Start-Up Nation. Israel replaced the need for natural resources with the products of innovation and entrepreneurship. As Shimon Peres said, in Israel “it’s not the land that blessed the people; the people blessed the land.” And what a blessing it has been: In 2011 Israel’s GDP was $261 billion. By 2017 it surpassed $350b. This is the key to Netanyahu’s “theory of power.”

Israel’s hi-tech and security expertise gave it leverage like that yielded by the oil-rich Gulf states. Numerous state visits to Israel in recent years, including historic visits by Prime Minister Narendra Modi of India and President Jair Bolsonaro of Brazil, make the prospect of international isolation detached from reality. Netanyahu deserves a lot of credit for beating back the “tsunami.” His domestic behavior, however, could destroy the country’s assets.

NETANYAHU’S STRATEGY equates the power of our technology and anti-terrorism capabilities with the power of oil. According to this logic, just as the world ignores the mistreatment of women and the LGBTQ community in Saudi Arabia, it will also overlook events at a checkpoint in the West Bank or anti-democratic legislation in Israel as long as the oil – or the hi-tech solutions and security cooperation – keep flowing.

This is a false equation. Israeli resources do not come from the ground. They stem from the minds of its citizens. As evident in the discourse which surrounded the April 2019 parliamentary elections and which is again present ahead of the September elections, many feel Netanyahu is waging a war against their values. Weakening the judicial system, demonizing the media and hounding NGOs that promote civilian and human rights are only a fraction of the anti-democratic moves by Netanyahu’s last government.

Attacking liberal values could destroy Israeli hi-tech – its greatest diplomatic and economic asset. Our hi-tech is a fragment of the country, but it punches way above its weight. It employs under 3% of the workforce yet is responsible for 40% of Israel’s exports. There is a strong correlation between the people in this field and Netanyahu’s political opposition. In general, the hi-tech sector – centered in Tel Aviv’s metropolitan area – is more liberal, left-leaning, and secular than Netanyahu’s voters. This was evident in the April elections. In Tel Aviv, Netanyahu’s Likud party received under 20% of the vote, while 45% of the residents supported his political opposition – the Blue and White Party. In Herzliya, Likud received 23%, compared to 48% for Blue and White.

A recent study by Prof. Dan Ben-David and the Shoresh Institution for Socioeconomic Research shows only 130,000 of Israel’s nine million citizens are responsible for driving the economy forward. The data are frightening. Some 9% of newly certified engineers or scientists depart Israel every year. For every returning scientist in recent years, 4.5 have left. These people are talented, and large companies and leading universities actively recruit them. Simply put, if they are unhappy, they have options.
It seems the Israelis responsible for its innovation are frustrated by Netanyahu’s domestic politics and policies. Their work opened doors in Asia, Latin America and the Arab world, but now they are leaving. Hurting Israel’s democracy directly hurts Israel’s economy.

Netanyahu’s theory of power brought Israel to new diplomatic heights. However, without a liberal democracy and strong values, good people will continue to leave. As this happens, Israel’s hi-tech will become stagnant and its military weakened. Netanyahu’s international strategy could collapse because of his domestic antics, hurting Israel and its future.
The writer is the chief political analyst for Channel 12 TV.

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