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Boosting trade and investment between Israel and the US

Interview - October 2, 2015

In an exclusive interview with Ofra Strauss, Chairwoman of the Israel American Chamber of Commerce, Globus Vision discovers the reasons behind the solidness of the relation between the two countries as well as the significant history and shared values which embody the foundations of this long lasting mutual cooperation.


I would like to gather your comments on the reasons behind the resilience of the Israeli economy during these harsh times and what is the secret behind the entrepreneurship spirit this country possesses?

The important thing when you look at Israel, it is compared to the region, the OECD, the US, and even Africa. We are considered in terms of GDP a developed, but we feel an emerging market. We still wake up, but in this sense we feel like it may all disappear tomorrow morning. In the in-between, we feel we maybe are not anymore an emerging market, but we definitely will always feel like that, I think. We will never feel we are a developed country in this sense that Western Europe feels. In our spirit, we are much more like the US.

We are an immigrant country. We continue to be open to immigration. If you look at Israel and compare it to the world, Ben-Gurion, our Prime Minister, was just amazing. He really created a country with a mix of people from all around the world. There are really no examples like that. Countries with minorities usually feel the internal tensions, and it does not work. Look at the Ex-Yugoslavia, look at Africa. You can create a country and make a lot of declarations, but when there are people with different backgrounds, the internal tension usually ends up in violence. This was not the case with Israel. So in Israel, there is something that was created, that was the right thing, but there is this tension. So some people look at the negative part of it, and some people focus on this mode, which is to want a better future. What we have feels like it is never enough, in a good sense that brings to innovation, to technology that changes the world. There is never a complete satisfaction in this country, and will never be because we aspire for more. I think it is one of those things that moves us ahead. You ask for the opinion of the country, so democracy goes hand in hand with innovation. You do not see countries around the world where innovation is really the flag and you do not have democracy, an established democracy. If democracy works, where everyone counts, you see innovation.

At the beginning of this interview, I really focused on what makes the Israel-America Chamber of Commerce such a thriving, dynamic Chamber, which is why I really chose to do this role for the last five year. It is a mission to take this unbelievable historical relationship between Israel and the US and to make sure that we highlight what is going on in this category. And it is a message to the US, to US citizens. When you talk about job creation, Israel investment in the US creates jobs, and creates good jobs. We are good guests. We always say in the business world that when we do invest in countries that are not our home base, we are guests in the country where we invest. And when Israel invests in the US, we create jobs.

In this sense, I really appreciate Pres. Obama´s hard work on opening the US and welcoming foreign investment. He does. I just came back, I was a Speaker in this event called Invest USA. It is an unbelievable gathering of companies from all around the world. The government comes and says on stage 'We want you to invest in the US. It is important to us.' And they do not ask you to make an investment just in high-tech or a traditional industry. It is a very big signal. We were on stage, we were welcomed. It was in the midst of what the world called the crisis between the two countries. It is a completely different channel. It is a long-term channel. When an American company invests in Israel or when an Israeli company invests in the US, those issues that we have on the political side are not part of it. They really are not. Actually, the two countries also approved global entry, which makes it easier for Israeli investors to do business in the US. All the signs are there, the numbers, we see more and more investment of American companies. And what we also see is Chinese companies coming here. Israel became a place where American companies, Chinese companies, Israeli companies, etc. talk about technology. It is a safer zone in many ways because there is this business community here.

When multinational companies sit here, they talk about the world. Eli Hurvitz, the legendary CEO of Teva, always said, 'Even though there are multinationals, the US is really the place because of the culture.' And Teva merged with a lot of companies. That is the result of Teva. When American companies and Israeli companies work together, the sky is the limit. We are insignificant compared to the size of American companies, but there is something about the combination. When you do it right, it can move ahead. You see those CEOs that really saw it 50 years ago. The Chamber is celebrating this year its 50thanniersary. The first bilateral agreement (Free Trade) was signed thirty years ago.

I think we are now with a peak of investments of American companies in Israel. I can see CEOs of multinational companies looking for the right investment. Their investments are of different types. Two weeks ago, the owner of an American holding company asked us to organize technology companies that can enhance their business. It may be from food to gaming. Some would say the Israeli government is not planning. The Army is a long-term planner. The economy is a long-term planner too, in some aspects. The government declared that when it comes to the next breakthrough in technology, the ten-year plan, besides cyber, is on biotechnology and food technology. When we were founded, it was part of our foreign policy. What they decided in an entrepreneurship way is to really give, for free, food technology, agriculture technology to Africa, to China, to Madagascar, all those forgotten places that the "big ones", Europe and the US did not even care about. The Israeli Foreign Ministry actually gave them free technology, very basic things. Now, Israel has a good relation with those countries. Whenever I travel, it includes the US by the way, the first thing is farming. And farming, when it comes to food, is a great way to actually reach out to the world.

So when you talk about Israel and the US, I think we have had a mission in the last two years, there is a big movement there. Big companies are really working together to create this food technology hub now in Israel which will one day close the gap between the amount of people that the world is going to have ten years from now and the shortage of food, which is called food security. So Israel is now declared to be a center for food technology. Google just launched Farm 2000, which is a game matching partnerships between technology and food companies. So there are new ways now, and Israel is part of it. We always talk about communication, and therefore you have a whole list of large technology companies that are here, such as Cisco and IBM. A lot of banks are here as well. Look at the multinationals here, they do not have expatriates, they do not need expatriates. That was a big surprise to me. Everyone speaks English here, and you have immigrants from every country. HR is really important for companies that open offices here.

Bureaucracy was always one of the things that pulled that down. The government took their first initiative this year, and theyare just launching it. They are really determined to change what we see now, because bureaucracy became a big thing. The government just published yesterday their initiative to make it easier for investors to invest in Israel.

Now it is really the time to think this is the next opportunity for investing in Israel. In the AMCHAM, we will be working very hard to bring new investments. We see a lot of technology around that. Wherever you have traditional industry, immediately around it you start to see technology created. I can really move from one industry to the other and say 'Israel is like a small laboratory.' You can really try everything here.    

What are your main motivations at the moment to maximize the bilateral relations between the USA and Israel?

At the beginning, it was to make sure 'It is here, it is done, and we have the platform.' My main motivation is to really make sure that everyone knows it. The American business community is almost there to know that Israel is a great place to invest. For the next five years, every American will know that investment of American companies in Israel and Israeli companies in the US not only create jobs, but also create a better future for the people in the two countries and around the world. Look at the innovation that is created.

This is not the traditional 'Let's go and find a place to manufacture because of low cost.' This is not the traditional investment that some multinationals are looking just to sell in this country. The investment of American companies in Israel and Israeli companies in the US, in most of the places that we track in and look at, is about foundation for the next investment. I think that once those things are part of our lives, part of the front pages of the magazines, we will make a prosperous Middle East. The commercial relations between the two countries are and will be very strong.

I think the peace will come not through politicians, but through these channels. I do not think that a government can really create sustainable stability in any region of the world without job creation. Our conflict is a hundred years old, and every government's cycle is about four years or less. So I think that, in this sense, that is my mission. And especially in this region, it is more important than in other regions. I have to say that when it comes to Obama's administration, they were extremely helpful and supportive of this mission. I was not there in the other administrations, but we had great support from both governments to continue and to do what we are doing. And the numbers are there.

The G20 Summit is taking place at the end of this year, and global safety is the major concern for all the power houses. How do you see this synergy between the top twenty members going forward in terms of creating what you have mentioned, a prosperous Middle East? How important do you see this Summit for the future of the Middle East in the coming years?

I always say that those Summits are extremely important. One of the issues about the G20 is that the papers do not really work and implemented from one Summit to the other. However, I see more and more the taking of the initiative to really work with the G20. The G20 is really the flag, it is really an announcement of what is important.

I think that the target of the G20 should be to talk about the prosperous Middle East and not about boycotts. It is just wording, I know. But growth creates jobs, takes people out of poverty and creates sustainable regions. For our region, it is really about that. Look at the GDP in most of the countries in the Middle East. It is not where the people who live in the Middle East want to be. What I see more and more is that my generation wants a better future for their children. And in this sense, something has changed. The Middle East can reallybe the next prosperous region. It is still on its way to make it. That is definitely my expectation of the next G20. The Summit in Mexico made it really clear that one of the subjects they are dealing with is food safety. Environment is another one. A lot of the research and workforce can be just part of the big effort that the G20 is doing.

What is your final message to our readers? What are the main points about Israel that you would like to highlight?

It is definitely one of the most exciting times to invest in Israel because it has become a center for international companies from all around the world to sit together and think about the innovation that will make this world a better place to live in. It sounds really a cliché, but when we talk about the innovation that was created here, you feel that those things do not happen just because somebody wrote an article. Israel does not have land, we do not have water, and we have a very small amount of people. And in order to really overcome that, you have to be innovative. I am talking about entrepreneurship. And technology is a part of it. And of course education level. That is one thing.

In terms of culture, everyone will find its match. JVs are the new thing in the business world. One of the things a business around the world learns is that we cannot do things by ourselves. There is a lot to be said about Join Ventures. And Joint Ventures between American companies and Israeli companies work. Of course, there are obstacles, but when they do, they create great results. Again, that is also to enter into other countries like China, Russia, etc. It is a small platform, but a great one.