group 6 - israel- ib assignment

8/8/2019 Group 6 - Israel- IB Assignment

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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


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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


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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


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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


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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

Controllers 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 consentdecrees 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


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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


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protection requirements. Pursuant to said law, the Minister of Interior requires businesses

operating in the following general categories to be licensed:

y health, pharmacy and cosmeticsy fuel and energyy agriculture and livestocky foody water and wastey miscellaneous commercey public entertainment, relaxation and sporty vehicles and transportationy security and protection servicesy 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 yearsince 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.


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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%


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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 Israels 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


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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 centralbanks for its efficient functioning, up from the 8th place in 2009. Israel was ranked first also in

its supply of skilled manpower.


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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.


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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.


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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 toanswer 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


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IsraeliBusiness 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, its 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 toprevent embarrassing moments.

DO address your colleagues and business partners directly in private if you have any concerns.

This way, misunderstandings wont grow and conflicts can be solved more easily.

DONTs

DONT 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.

DONT 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.

DONT 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.


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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 countrys economy is still growing and will continue to prosper because of its strongmultinational 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 thedevelopment 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.


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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.

GovernmentSupport

"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


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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 FinancialSupport

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.


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Culture ofRisk 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 itsconsumers 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.


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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

y Proximity to developing markets in East Europe and Asiay Jewish money thats looking for investmenty Jewish and ex-Israeli human resources attraction to Israely Existing mechanisms of raising capital of the Bonds

EXTERNAL THREATS

y Geopolitical situationy The sub-prime crisisy Non-harmonious regulationy 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.


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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:

y Development of the financial industryy Development and advancement of financial tools to enhance competition in the capital

market

y Accessibility of household, small and medium sized business to the capital market andcurrency

y Harmonization and equalization of infrastructure of regulatory bodiesy 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.


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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 countrys 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:

y Israel does not have too much agricultural land, hardly any for growing cottony 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

y Israel being a Jew country and having a hot climate, prefer cotton clothes. Thus, with afew experimentations but keeping the idea basic and simple, good variety of clothes can

be exported.

Sources:

1. www.answers.com/topic/israel2. http://www.jewishvirtuallibrary.org/jsource/Politics/Arabs.html3. 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.