Israel Update Week Ending September 3
Budget Passed,Biden Meeting,Defense, Covid 19 and the Economy
PASSAGE OF THE BUDGET
For the first time in three years, the Knesset passed a budget yesterday, along with the supplemental laws that institute many reforms in the economy. Passage of the budget was the first real test of the new government. Last night's vote was just the preliminary vote, as the budget will be brought up for second and third votes when the Knesset reconvenes after the holidays. Finance Minister Lieberman was willing to negotiate changes in supplemental laws to meet requests of the various political parties that make up the coalition.
Some of the most notable reforms include:
1) A major agricultural reform that will allow the free import of fruits and vegetables, established to lower produce prices here in Israel. In order to gain support from the labor party, additional financial aid was promised to farmers, and eggs were excluded from the final agreement.
2) The retirement age for women will be raised to be equal to men, however, the increase will be done incrementally over 11 years.
3) The creation of a body to review all Israeli regulations was approved, but its powers have been reduced to a primarily advisory role.
4) New taxes on one-time plastic cutlery and sugary drinks made it into the reform.
5) Congestion pricing on cars entering Tel Aviv at certain high volume hours.
The budget itself includes generous increases in funding for most areas of social welfare.
Assuming the budget passes in the second and third readings, the coalition's future will be mostly assured for the next two years. In a speech yesterday, former PM Ehud Barak said it best — what makes this government so special, is its normalcy. People are working together, arguing, but eventually reaching agreements, which they keep.
BENNETT-BIDEN MEETING
Last week, after a one-day delay, Prime Minister Bennett met with President Biden. By all accounts, the meeting went well. Bennett achieved his stated goals of building a personal relationship with Biden, and sharing his views on any agreement with Iran.
Bennett was successful in encouraging Biden to talk about other means of stopping Iran, in the event that an agreement is not reached. Biden recommitted to providing funds for Israel to restock its inventory of Iron Dome interceptors. Unfortunately, Netanyahu could not stop himself from attacking Bennet, from his Hawaii vacation spot. The Israeli version of “politics stop at the ocean shores” (no longer the case in the US), is certainly not the case in Israel at the moment. My take on the Bennett-Biden meeting can be seen in my ILTV interview from Sunday.
While it's not clear whether the Iranians want to go ahead with an agreement, Dan Shapiro, former US Ambassador to Israel, has been appointed to the State Department Iran negotiating team, as liaison with the Israeli government. Shapiro never left Israel after Trump's victory and his resignation as Ambassador. Shapiro is someone I know and respect and is an excellent choice.
GAZA
This week, Border Patrol sergeant, Barel Hadaria Shmueli, tragically succumbed to his wounds. His funeral became political, when his mother criticized Bennett, and Likud activists in attendance stirred up the crowd. The claim being made was that IDF orders on the use of force had changed, so as not to upset the Biden-Bennet meetings, an assertion that has been refuted. IDF Chief of Staff Kochavi spoke out about the incident on Thursday, making it clear there was no change in orders of when to open fire.
This morning, the official IDF report on the incident was presented to the family. It concluded the tragedy was the result of a tactical mistake, the positioning of soldiers so close to the wall, when so many Gazans were next to it. The IDF stated that the rules of engagement were not the issue, rather the above-mentioned tactical error. This has been one of the first times the death of soldier in combat has been politicized in such a way. The army hopes the report will end the politicization of this tragedy. Sadly, the first signs are that it will not, as the lawyers for the family claim they do not accept the investigation results.
Nightly demonstrations continue along the Gaza border, during which, Israel killed one of the protestors last night. Hamas is not happy with Israel's new policy of working to make life better for the average Gazan, while doing its best to bypass Hamas.
DEFENSE
According to foreign reports, Israel attacked sites around Damascus last night. The Syrians responded by wildly firing their Sa-5 air defense missiles. These missiles have a long range, and last night, one of them flew over Tel Aviv, before falling into the sea. Parts of the rocket were found in Tel Aviv this morning.
There were two interesting appointments in the IDF this week. First, General Yifat Tomer became the second woman to achieve the rank of Aluf (General) in the IDF, when she received her new rank upon becoming chief legal officer of the army.
In addition, Major Ella received her new rank this week, becoming the highest-ranking Muslim woman in the IDF. She serves in IDF Spokesperson Unit.
Defense Minister Gantz met with Palestinian Authority President Mahmoud Abbas earlier this week. This was the first time that a high-ranking Israeli has met with President Abbas, since Tzipi Livni met with him in 2014. The meeting took place with Prime Minister Bennett’s approval and is part of the government's approach — to try to strengthen the Palestinian Authority, as one of the ways of fighting Hamas — i.e. the opposite of Netanyahu government policy.
In the aftermath of the meeting, there were howls from the right-wing, with MK Bezalel Smotrich, claiming the overture would lead to buses blowing up. Exactly why meeting with the Palestinian leader who has consistently opposed violence to end the occupation would lead to terror attacks, is an interesting question. Unfortunately, Bennett, whose Achilles heel is criticism from the right-wing, immediately stated there would be no diplomatic process with the Palestinians— which was a very unnecessary statement. After all, Bennett can always make sure there is no process; in the meantime, it works to Israel's advantage on the international scene to leave this issue hazy.
COVID-19
Israel is, once again, leading the world in the number of Covid infections per 100k population. This is despite a successful booster shot campaign, and having one of the most vaccinated populations in the world. Nevertheless, we opened all our schools this week, with almost no restriction or precautions warranted by Covid.
This past week, the number of daily Covid-19 cases seems to have plateaued, at between 10-11,000. The good news is that the number of severely ill has declined in the past week, from 726 to 667. Part of the decline was due to the 164 Israelis who died over the course of this past week. However, there seems to be an evident decline, thanks to the booster shot. The impact of the school opening remains unclear. However, resuming in-person instruction, followed by allowing large family dinners for the holidays, is not a recipe to beat the disease.
After two days of school being open, 100,000 students are in isolation, and 41,590 have Covid. (out of approximately 2 million school children). As of last night, Israelis who go abroad and have had the booster shot no longer have to remain in quarantine, beyond the one day it takes to receive a negative result on their PCR test, taken at the airport.
The government continues to put all of its eggs in the vaccine basket, something that can work when there is a low infection rate, but is not nearly as effective with the high rates we have here now. Vaccines work, but they do not provide 100% protection.
ECONOMY
Israeli companies raised significant funds in August 2021. According to reports the total raised was over $1 Billion.
Firms that raised considerable cash include:
4M Analytics $11 million
Antidote Health $12 million
Balance $25 million
BrainQ $40 million
Browzwear $35 million
ByondXR $7 million
Castor $3.5 million
Circles $8 million
Edge Gaming $2 million
Eloops $2 million
Hunters $30 million
Jifiti $22.5 million (from Ikea its first investment in Israeli startups)
Joonko $10 million
Monte Carlo $60 Million (C-Round)
OwnBackup $240 million (E-Round at $3.35 billion valuation)
Rapid Medical $300 million (E-Round at a valuation close to $10 billion)
Reali $50 million
Renovai $3.7 million
Retrain.ai $7 million
Sayata Labs $17 million
STORE $8 million
TetaVi $20 million
Walnut $15 million
Upstream $62 million C-Round
In addition, Bioventus, a leading US ortho-biologics firm is poised to purchase Kfar Saba-based CartiHeal in an exit, for an expected $500 million.
And with that,
Shannah Tova - May you have a healthy New Year!!