International Business

Assignment

Study of a Country - Israel

Submitted by:
Pankaj Barapatre M-09-06
George Kurien M-09-17
Sarika Mankani M-09-29
Nimish Pradhan M-09-41
Mrugesh Totade M-09-53
OVERVIEW
Israel in 1948 was a small sliver of land with a minuscule population, overwhelmingly
concerned with the problems of daily survival, and struggling to create the framework for an
independent and viable state. Fifty-two years on, and as we pass from one millennium to
another, Israel is home to a thriving and vibrant cultural life embodying manifold forms of
human expression. It has developed from an inward-looking, introverted and culturally self-
absorbed people, into a universalist, extrovert and dynamic, multi-cultured world-embracing
force. Its artists, writers, dancers, actors and musicians have made an impact far beyond their
number, while an increasing variety of international festivals and events, such as the Israel
Festival, the Jerusalem International Book Fair, the International Poetry Festival, the Karmiel
Dance Festival and many others, have become notable events in the world's cultural calendar.
In Israel itself, the constant search for cultural identity is expressed by dynamic creativity in a
broad range of art forms, appreciated and enjoyed by a great many people - not as an activity for
the privileged few, but as an essential part of daily life

DEMOGRAPHICS

Religions: Jewish 76.5%, Muslim 15.9%, Arab Christians 1.7%, other Christian 0.4%,
Druze 1.6%, unspecified 3.9% (2003)
Languages: Hebrew (official), Arabic used officially for Arab minority, English most
commonly used foreign language
Age structure: 0-14 years: 26.3% (male 855,054/female 815,619)
15-64 years: 63.9% (male 2,044,135/female 2,016,647)
65 years and over: 9.8% (male 266,671/female 353,991)
Median age: 29.6 years
Growth rate: 1.18%
Infant mortality: 6.89 deaths/1,000 live births
Life expectancy Total population: 79.46 years
at birth: male: 77.33 years
female: 81.7 years

Demographics are the statistical characteristics of human populations, such as age, income, sex,
occupation, education, family size, population, ethnic origins, religion, spoken language that are
used by businesses to identify markets for their goods and services. Demographics are used to
identify who your customers are (now and in the future), where they live, and how likely they are
to purchase the product you are selling. By studying your customers and potential customers
through demographics, one can identify changing needs in the marketplace and adjust to them.
For the businessperson, identifying the demographic groups that will be most interested in your
product can mean the difference between success and failure. This is especially critical for the
small businessperson who might have less room for error than larger companies.

Basic demographic analysis is used for two reasons: to identify population characteristics in
order to determine just who your potential customer is and to serve as a means of locating
geographic areas where the largest number of potential customers live.

LEGAL AND POLITICAL ENVIRONMENT

Government type: Parliamentary democracy

Capital: Jerusalem; note - Israel proclaimed Jerusalem as its capital in 1950, but the
US, like nearly all other countries, maintains its Embassy in Tel Aviv
Legal system: Mixture of English common law, British Mandate regulations, and, in
personal matters, Jewish, Christian, and Muslim legal systems; in December
1985, Israel informed the UN Secretariat that it would no longer accept
compulsory ICJ jurisdiction
Suffrage: 18 years of age; universal
Executive branch: chief of state: President Shimon PERES (since 15 July 2007)
head of government: Prime Minister Ehud OLMERT (since May 2006);
Deputy Prime Minister Tzipora "Tzipi" LIVNI; note - Prime Minister
OLMERT resigned on 17 September 2008, but will serve as acting prime
minister until a new government is formed
cabinet: Cabinet selected by prime minister and approved by the Knesset
elections: president is largely a ceremonial role and is elected by the Knesset
for a seven-year term (one-term limit); election last held 13 June 2007 (next
to be held in 2014 but can be called earlier); following legislative elections,
the president assigns a Knesset member - traditionally the leader of the
largest party - the task of forming a governing coalition.
Legislative branch: unicameral Knesset (120 seats; members elected by popular vote to serve
four-year terms)
Judicial branch: Supreme Court (justices appointed for life by the president)

Alien Business Law

There is no one statute addressing foreign investment in Israel or the carrying on of business by
non-citizens of Israel. Under the Trade with the Enemy Ordinance enacted by the British
mandatory government in 1939 and still in force, trade with a citizen of a country at war with
Israel is prohibited and assets situated in Israel of a citizen of such country may be impounded by
the Israeli government.
Depending on the area of business and form of business entity, registration and reporting
requirements may apply. Although there are no exchange control restrictions on direct or indirect
financial investment in Israel, certain reporting requirements by Israeli residents regarding
transactions in foreign currency exceeding certain thresholds apply. Under the Prohibition on
Money Laundering Law and regulations adopted there under, persons (including foreign persons)
having or opening bank, brokerage and other accounts have the obligation to provide certain
declarations regarding the ownership (including the beneficial ownership) thereof to the banks,
brokers and other entities at which such accounts are maintained

Antitrust Laws

Entities operating in Israel are subject to the RTP Law which, inter alia, regulates mergers and
acquisitions that meet or exceed relevant notification thresholds as well as other types of
restrictive practices, such as restrictive arrangements and monopolies.
Restrictive arrangements
A “restrictive arrangement” is defined in the RTP Law as an arrangement made between persons
who manage businesses, according to which at least one of the parties imposes a restriction on
itself that is liable to prevent, or reduce, competition between itself and all or some of the other
parties to the arrangement, or between itself and a person who is not a party to the arrangement.
Monopolies and abuse of market power
The RTP Law regulates (mainly in Chapter Four thereof), monopolies and abuse of market
power. The Antitrust Authority and the Antitrust Tribunal are the main relevant regulators. The
two main elements of the special statutory regime applicable to monopolies are: a declaration
made by the Antitrust Controller on the existence of a monopoly; and special duties imposed on
monopolies.
Declaration of a monopoly
The RTP Law empowers the Antitrust Controller to declare a certain person or company to be a
monopoly. However, this is only a declaration and the provisions of the RTP Law relating to
monopolies and monopolistic duties will apply, without a declaration to any monopoly. The RTP
Law defines a monopoly as a concentration of a market share that exceeds 50% (no proof of
market power is necessary). The main significance of the declaration is that it can be used in any
legal proceedings as prima facie evidence of the existence of a monopoly. The Antitrust
Controller’s declaration is also intended to be a warning sign to the monopolist, reminding him
of his special position in the market and (although not necessary under the RTP Law) constitutes
a first step in intervention in the business conduct of the monopolist.
Violations of the RTP Law could, depending on the circumstances, lead to orders and consent
decrees by the Antitrust Authority, criminal proceedings.
Review of merger notices
The Economic Division of the Antitrust Authority primarily conducts the review process. It
considers the information included in the merger notice and any enclosed letter, as well as any
other relevant public information. It can also ask the views of interested third parties, such as
competitors, suppliers, customers and governmental Ministries. It is common for the Antitrust
Authority to request the notifying parties to provide additional information. Once the Antitrust
Authority has concluded the information gathering process, the Economic Division files an
internal report containing its recommendation. The report is then brought before the Advisory
Committee. The Advisory Committee can also request the Antitrust Authority to provide further
information.
Environmental Regulations:

Israel has a host of environmental challenges and extensive legislation and regulation to promote
protection of the environment.
In addition, environmental considerations are incorporated into the Planning and Building Law
and the Licensing of Businesses Law, both of which may impact a proposed business in Israel at
the earliest stages.
The Planning and Building Law
The Planning and Building Law provides that it is obligatory to obtain a building permit from the
relevant local licensing authority with respect to proposed construction. The Planning and
Building Law establishes different levels of planning institutions and a clear hierarchy among
national, regional and local outline plans. Whilst the principles are determined in outline plans on
the national level, the implementation thereof is determined in plans at the regional and local
levels. The national outline plans deal, inter alia, with national infrastructure (e.g., power
stations, harbors, roads, etc.) as well as the preservation of natural resources, scenery and
archaeological sites.
The Licensing of Businesses Law
The Licensing of Businesses Law, which establishes the framework for the licensing of most
businesses, also incorporates environmental considerations into the process. As a result, general
business licenses may contain special environmental conditions and restrictions with respect to
the operation of the particular business licensed.
Licenses/Permits
Depending on the anticipated activity, a license or permit may be required. The Licensing of
Businesses Law authorizes the Minister of Interior, in consultation with a number of different
governmental Ministries, to require businesses to be licensed in order to protect environmental
quality, public peace, safety and health as well as compliance with planning and building and fire
protection requirements. Pursuant to said law, the Minister of Interior requires businesses
operating in the following general categories to be licensed:
 health, pharmacy and cosmetics
 fuel and energy
 agriculture and livestock
 food
 water and waste
 miscellaneous commerce
 public entertainment, relaxation and sport
 vehicles and transportation
 security and protection services
 industry, crafts, chemistry and minerals
 ECONOMY

Israel has a technologically advanced market economy with substantial, though diminishing,
government participation. It depends on imports of crude oil, grains, raw materials, and military
equipment. Despite limited natural resources, Israel has intensively developed its agricultural and
industrial sectors over the past 20 years. Israel imports substantial quantities of grain but is
largely self-sufficient in other agricultural products. Cut diamonds, high-technology equipment,
and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts
sizable trade deficits, which are covered by large transfer payments from abroad and by foreign
loans. Roughly half of the government's external debt is owed to the US, its major source of
economic and military aid. Israel's GDP, after contracting slightly in 2001 and 2002 due to the
Palestinian conflict and troubles in the high-technology sector, has grown by about 5% per year
since 2003. The economy grew an estimated 5.4% in 2007, the fastest pace since 2000. The
government's prudent fiscal policy and structural reforms over the past few years have helped to
induce strong foreign investment, tax revenues, and private consumption, setting the economy on
a solid growth path.

GDP: $185.8 billion (2007 est.)

GDP growth rate: 5.2%
GDP per capita: $26,600
GDP composition by sector: agriculture: 2.6%, industry: 31.7%, services: 65.7%
Inflation rate: 1.3%
Labor force: 2.42 million
Labor force - by occupation: public services 31.2%, manufacturing 20.2%, finance and business
13.1%, commerce 12.8%, construction 7.5%, personal and other
services 6.4%, transport, storage, and communications 6.2%,
agriculture, forestry, and fishing 2.6%
Unemployment: 9%
Budget: revenues: $43.82 billion, expenditures: $58.04 billion
Electricity production by
source: fossil fuel: 99.9%, hydro: 0.1%, other: 0%, nuclear: 0%
Industries: high-technology projects (including aviation, communications,
 computer-aided design and manufactures, medical electronics, fiber
optics), wood and paper products, potash and phosphates, food,
beverages, and tobacco, caustic soda, cement, construction, metals
products, chemical products, plastics, diamond cutting, textiles,
footwear
Agriculture: citrus, vegetables, cotton; beef, poultry, dairy products
Exports: machinery and equipment, software, cut diamonds, agricultural
products, chemicals, textiles and apparel
Export partners: US 36.7%, Belgium 7.5%, Hong Kong 4.2% 
Imports: raw materials, military equipment, investment goods, rough
diamonds, fuels, grain, consumer goods
Import partners: US 17.9%, Belgium 9%, Germany 6.5%, Switzerland 6%, UK
5.4%, China 4.2% 
Currency: new Israeli shekel (ILS); note - NIS is the currency abbreviation;
ILS is the International Organization for Standarization (ISO) code
for the NIS

SOURCES: The CIA World Factbook, U.S. Department of State, Area Handbook of the US
Library of Congress

The major industrial sectors include metal products, electronic and biomedical equipment,
processed foods, chemicals, and transport equipment. Israel possesses a substantial service sector
and the Israel diamond industry is one of the world's centers for diamond cutting and polishing.
It is also a world leader in software development and is a major tourist destination. In 1998, Tel
Aviv was named by Newsweek as one of the ten most technologically influential cities in the
world. American billionaires and business tycoons including Bill Gates, Warren Buffett, and
Donald Trump have each praised Israel’s economic environment, and the country was the
destination for Berkshire Hathaway's first investment outside of the USA when it purchased
ISCAR Metalworking, and the first research and development centers outside the USA for
companies including Intel and Microsoft. The country has now become known as Silicon Wadi.

Israel has signed free trade agreements with the European Union, the United States, the European
Free Trade Association, Turkey, Mexico, Canada, Jordan, Egypt, and on 18 December 2007,
became the first non-Latin American country to sign a free trade agreement with the Mercosur
trade bloc.

Israel also enjoys the availability of $3.148 billion in U.S. loan guarantees, whose conditions are
negotiated each year at the U.S.-Israel Joint Economic Development Group (JEDG), if needed to
help support government bond sales, though in recent years Israel has opted not to use this
facility.

Two developments have helped to transform Israel's economy since the beginning of the 1990s.
The first is waves of Jewish immigration, predominantly from the countries of the former USSR,
that has brought over one million new citizens to Israel. These new immigrants, many of them
highly educated, now constitute some 16% of Israel's 7.5 million populations. The second
development benefiting the Israeli economy is the peace process begun at the Madrid conference
of October 1991, which led to the signing of accords led to a peace treaty between Israel and
Jordan (1994).

In the past few years there has been an unprecedented inflow of foreign investment in Israel, as
companies that formerly shunned the Israeli market now see its potential contribution to their
global strategies. In 2006, foreign investment in Israel totaled $13 billion, according to the
Manufacturers Association of Israel. Moreover, while Israel's total gross external debt is US$84
billion, or approximately 44% of GDP, since 2001 it has become a net lender nation in terms of
net external debt (the total value of assets vs. liabilities in debt instruments owed abroad), which
as of June 2009 stood at a significant surplus of US$54 billion.

The Israeli economy withstood the late-2000s recession, registering positive GDP growth in
2009 and ending the decade with an unemployment rate lower than that of many western
countries. There are several reasons behind this economic resilience, for example, the fact, as
stated above, that the country is a net lender rather than a borrower nation and the government
and the Bank of Israel's generally conservative macro-economic policies. Two policies in
particular can be cited, one is the refusal of the government to succumb to pressure by the banks
to appropriate large sums of public money to aid them early in the crisis, thus limiting their risky
behavior. The second is the implementation of the recommendations of the Bach'ar commission
in the early to mid-2000s which recommended decoupling the banks' depository and investment
banking activities, contrary to the then-opposite trend, particularly in the United States, of easing
such restrictions which had the effect of encouraging more risk-taking in the financial systems of
those countries.

As of 2010, Israel ranks 17th among of the world's most economically developed nations,
according to IMD's World Competitiveness Yearbook rankings. The Israeli economy was ranked
as the world's most durable economy in the face of crises, and was also ranked first in the rate
research and development center investments The Bank of Israel was ranked first among central
banks for its efficient functioning, up from the 8th place in 2009. Israel was ranked first also in
its supply of skilled manpower.

Israeli companies, particularly in the high-tech area, have enjoyed considerable success raising
money on Wall Street and other world financial markets; As of 2010 Israel ranked second among
foreign countries in the number of its companies listed on U.S. stock exchanges.

CULTURE IN ISRAEL

A review of any country's cultural history over the last fifty years would show enormous changes
- undoubtedly a quantum leap - and certainly more changes than in any other fifty year period in
history.

A Flood of Immigrants

As we have seen, Israel's cultural founding fathers and mothers perceived a national imperative
in creating one society where ethnic individuality and varied cultural backgrounds would be
subsumed within a homogenous "Israeli" society. Today, that perception is very much a thing of
the past. Israel is a multi-cultural society, and it is now accepted that the country stands only to
benefit from retaining cultural individuality while striving to achieve a parallel Israeli culture
that will absorb and be enriched by the manifold strands that make up the whole. Israel is still a
country of immigrants - since 1989, over one million immigrants arrived from the countries of
the former Soviet Union. In "Operation Moses" of 1984-1986 and "Operation Solomon" of 1991,
over 30,000 Jews arrived from Ethiopia. All of these, in addition to thousands of other
immigrants from all over the world, increased the population of the country by over 12 percent in
six years - comparable to the United States taking in over 30 million people in the equivalent
amount of time!

Doing Business in Israel

Working practices in Israel

• Business is not conducted on Saturday as this is the Jewish Sabbath day. Therefore, the
working week in Israel starts on Sunday. People typically work 40-45 hours per week from
Sunday to Thursday, mostly from 9:00 or 9:30am to5:00 or 6:00pm.

• Appointments may be arranged at short notice and business partners are expected to be on time.

• Although English is mostly spoken in the Israeli business environment, it may be helpful to
learn some Hebrew expressions beforehand. Being able to say a few greetings will be
appreciated.

• People in Israel have only recently started the tradition of exchanging business cards at
meetings.

• The role of women in the public sphere is increasingly becoming more important.
Traditionally, women in Israel have had a more inferior position in society because of the
influence of their religion. However today, more and more women are entering the job market
and obtaining equal positions to their male counterparts.

Structure and hierarchy in Israeli companies

• Hierarchy in Israeli companies is usually very flat. Decisions are made collectively depending
on their significance. Every employee is entitled to express their opinion during staff meetings
which creates a rather open working environment. Nevertheless, the most senior person will have
the final say in the decision-making process.
• Israel is increasingly individual-oriented. Many Israeli employees will make decisions without
the consensus of others.

• Qualities expected from managers include individual skill, fairness, initiative and
qualifications. Due to the immigrant background of most Israelis, individual performance is
valued higher than seniority and status.

Working relationships in Israel

• The working atmosphere and dress code tend to be casual in Israel so it is not uncommon to
find Israelis wearing jeans in the office. Until you are familiar with your business counterpart,
you should wear a suit or smart trousers and shirt/top.

• Personal relationships play a central role in Israel. In fact, the company is often considered as a
second family. People are very likely to come into contact easily and help each other out.

• Israeli colleagues will call each other and even their superiors by their first names, which
emphasizes the familiarity. Business partners, however, tend to be addressed more formally until
a personal relationship is developed.

• Israeli society is achievement-oriented. Recognition and job status is based on

accomplishments, experience and knowledge. Based on the general idea of equality, during
negotiation Israelis will be fierce competitors.

Business practices in Israel

• Israelis can be very direct and prefer to get things done quickly. Therefore, you should plan
projects against a shorter timescale of days and weeks instead of months.

• As a result of the many conflicts and wars Israelis have been experienced, they tend to rely on
the present and do not focus as much on the future.

• Be prepared for interruptions during your business meeting. The informal atmosphere of Israeli
business combined with the importance of relationships means that people will take the time to
answer calls or visits from other people. This may be very distracting and may seem impolite,
but being efficient in Israel means doing more than one thing at the same time.

• Be ready for tough but friendly negotiations

• When negotiating with Israelis it is a good idea to record any agreement in writing. Despite the
informality of Israeli business and the importance of relationships, the written word tends to be
more important than the spoken word

• During the decision-making process, feelings and intuition are very important

Israeli Business Etiquette (Do's and Don'ts)

DOs

• DO address your Israeli partner by their first name and ask them to do the same. This will
create a comfortable and informal business environment which is typical of Israeli business
culture.

• DO respect the religious background of your business partner. For example, if doing business
with Orthodox Jews, it’s a good idea to choose a kosher restaurant for a business dinner. Ask
your partner about his eating habits beforehand to make sure you choose the right place to
prevent embarrassing moments.

• DO address your colleagues and business partners directly in private if you have any concerns.
This way, misunderstandings won’t grow and conflicts can be solved more easily.

DONTs
• DON’T discuss Israeli government, politics or religious issues during a business meeting.

However, listen carefully if your Israeli partner starts talking about these topics and try to remain
neutral on the subject to avoid causing offense.

• DON’T be offended if Israelis interrupt you while you are speaking. This is not a rude gesture,
simply a reflection of their communication style which often involves debate and passionate
discussions.

• DON’T come late to appointments and business meetings. Even though punctuality is favored,
Israelis tend to be a little late sometimes. But they expect you to be on time.

OTHER CONSIDERATIONS AND ISSUES

STRENGTHS

Strong Economy

Despite the ongoing political and economic upheaval in the Middle East, Israel's innovative high-
tech sector has lost little of its dynamism. Israel has survived a number of economic downturns
in its recent history including a tourism crisis because of political turmoil and worldwide
economic recessions. Though the country has witnessed a slowdown in some sectors, the
country’s economy is still growing and will continue to prosper because of its strong
multinational corporations and defense industry exports.

Human Capital

Israel's population of less than 6 million people consists of highly educated and very skilled
professionals. This abundance of skilled labor has allowed the country to compensate for its lack
of other types of resources.  Israel has the highest per capita population of engineers engaged in
research and development in the world and they have contributed significantly to the
development of the high-tech industry.

The compulsory military institutions have created a very centralized and team-oriented nation,
while Israeli world-renowned programs and educational institutions have produced some of the
most talented Information technology developers and workers. 

Source: Embassy of Israel

The Military

Military service is mandatory for youths over 18 years old. This service not only provides young
adults with proper technological training, but also assists in the development of their work habits,
ethics and management styles.  The military also fosters a sense of team building and teamwork,
which encourages them to form close networks and communities. These close relationships not
only prepare them for the corporate team-orientated environment, but also allows them to build
lasting relationships that can transpire into start-up companies.

 Government Support
"Israel's strength in the high-tech arena dates back to the early seventies, when the country's
leaders decided to focus on developing the technology industry, recognizing that they lacked
much in the way of natural resources or low-cost labor, and so the only area in which the country
had a relative advantage over other nations was in its highly educated workforce."

Apart from the compulsory military service that has lead to the creation of a number of local IT
firms, the government is actively involved in funding the IT industry with subsidies, tax
incentives and incubator programs. The advanced stated education infrastructure has also
contributed greatly to the current and future success of the IT Industry.

Changes in regulatory policy will continue to be strength for Israel; the introduction of
competition in the Telecommunications industry has not only improved service greatly but has
also encouraged more investment in the nation. Improvements in Legal Policy, including the
revision of copyright, trademark and patent laws will also encourage investment as well protect
Israeli innovation.

External Financial Support

External support from investors both domestic and foreign has also been an integral part of the
success of the IT industry. Venture capital firms and private foundations have invested billions
into the continuous development of this industry.  Bi-National partnerships have encouraged
investors from many developed nations in the world, including the United States and Japan, to
participate in the IT revolution in Israel.

Approach to IT

"The Israeli high-tech sector's focus on fundamental technology is what has made it less
vulnerable to the current NASDAQ downturn than were the many service-oriented dot-coms"
Although most Israeli high-tech firms were founded as start-ups, they continue to thrive as a
result of their focus on telecommunications, software development and the Internet.

Russian Immigrants
Of the 70,000 immigrants who joined the Israeli population in the early 1990's, 50% had
university degrees, while many of them were highly educated scientists, engineers and
technicians. They not only brought with then innovation, but specific technologies that
contributed significantly to the development of Israeli high-tech industry. 

Culture of Risk taking

Another of Israel's strength is the culture itself, which places a premium on risk-taking and
entrepreneurship. This attitude has enabled Israelis to leave their jobs in established corporations
to take part in start-up companies - the foundation of Israeli high-tech.

Size of Country

Due to the small size of the country, close-knit communities are formed from various
neighborhoods. These relationships often form the basis for successful start-up companies. Also,
the corporations within the high-tech industry are geographically close together. The country as a
whole operates similarly to that of a tech park.

The Internet

Although Israel is geographically far from many of its business partners, the Internet provides
the country with a means to communicate quickly, access free information and connect to its
overseas counterparts. Now, with over 40 Internet Service Providers, the internet penetration rate
grows steadily.

WEAKNESSES

Distance from Markets:

Although demand for various technologies might be high per capita, due to the country's size, it
is not enough to support an entire industry. This forces the country to look abroad.  Because of
Israel's geographic location, it is far from many markets and creates a competitive
challenge. Although the Internet has created the free flow of information and increased
communication between countries dramatically, the physical distance between Israel and its
consumers is a definite weakness for the country. It is important for Israel to continuously assess
this problem, while forming strategic partnerships with foreign firms and taking other such
actions to alleviate this problem.

Geography of country:

Israel falls in the midst of a developing region, many of its neighbors lack both financial capital
and overall infrastructure to participate in the IT industry. This makes exporting developments in
both goods and services difficult. If the region was more developed, local trade would greatly
increase the market potential of the industry.

Slow e-commerce adoption:

Although business to business and business to consumer activity is increasing in Israel, adoption
is still behind the other sectors of the high-tech industry. E-commerce adoption has been rather
slow due to Israeli hesitancy to provide credit card information over the web and because of the
culture preference to touch items before purchase.

EXTERNAL OPPORTUNITY

 Proximity to developing markets in East Europe and Asia

 Jewish money that’s looking for investment
 Jewish and ex-Israeli human resources – attraction to Israel
 Existing mechanisms of raising capital of the Bonds

EXTERNAL THREATS

 Geopolitical situation
 The sub-prime crisis
  Non-harmonious regulation
 Strong workers unions (mostly banks)

'The Great Knowledge Robbery'

TIM Chair Lester Thurow recently pointed out that a major disaster occurred around
September 11. No, it was not the terror attack on the World Trade Center. Almost unnoticed,
between September 11 and 14, 2003, in Cancun, Mexico, the rich and the poor countries failed to
agree on a deal in negotiations sponsored by the World Trade Organization that began in Doha in
2001.
The deal was to allow freer access for poor countries' agricultural exports to rich nations'
markets, in return for poor countries' agreement to respect patents and intellectual property. In
the rich countries, farmers have enormous political power. So the rich countries refused.
The result: The poor countries may in future ignore the intellectual property rights of the rich. In
fact, they already do. This is a huge threat to all nations who make their living with their brains,
including Israel.

Issues to address:
 Development of the financial industry
 Development and advancement of financial tools to enhance competition in the capital
market
 Accessibility of household, small and medium sized business to the capital market and
currency
 Harmonization and equalization of infrastructure of regulatory bodies
 Human capital

PRODUCT THAT CAN BE MARKETED:

Few items that are banned for imports in Israel are wheelchairs, dry food items, and crayons, to
stationary, soccer balls, and musical instruments have been blocked by Israel. Amnesty
International and other organizations reported that cement, glass, steel, bitumen, wood, paint,
doors, plastic pipes, metal pipes, metal reinforcement rods, aggregate, generators, high voltage
cables and wooden telegraph poles are high priority reconstruction materials currently with no or
highly limited entry into Gaza through official crossings. A UN report by Kevin M. Cahill called
the restrictions "Draconian", and said that reconstruction is halted because Israel does not permit
the importation of steel, cement or glass, among other building materials, and has restricted
importation of lentils, pasta, tomato paste and juice, as well as batteries for hearing aids.

Our Product

We decided on marketing textile products in Israel as the Indian textile industry contributes
about 14 per cent to industrial production, 4 per cent to the country's gross domestic product
(GDP) and 17 per cent to the country’s export earnings, according to the Annual Report 2009-10
of the Ministry of Textiles.

It provides direct employment to over 35 million people and is the second largest provider of
employment after agriculture. Exporting textile goods will be win-win situation for both Israel
and India

Reasons why Israel need textile:

 Israel does not have too much agricultural land, hardly any for growing cotton

 Israel is fast becoming an advanced country with high stakes in infrastructure and
technology. People thus have a good capacity to pay for higher priced clothes

 Israel being a Jew country and having a hot climate, prefer cotton clothes. Thus, with a
few experimentations but keeping the idea basic and simple, good variety of clothes can
be exported.
Sources:

1. www.answers.com/topic/israel
2. http://www.jewishvirtuallibrary.org/jsource/Politics/Arabs.html
3. Doing Business in Israel: Communicaid Group Ltd (2009)
4. A Guide to doing Business in Israel: Lex Mundi (S. Horowitz and Co.)
5. Documents published by Embassy of Israel.