Israel's splendid isolation

By Ambassador (ret.) Yoram Ettinger

Notwithstanding the conventional claim that Israel is increasingly isolated, the multinational accounting firm PricewaterhouseCoopers determined that 2014 was a record year of overseas investments in Israel's high-tech industries: $15bn in acquisitions of 52 Israeli startups  (compared to $7.6bn in 2013), in addition to $9.8bn raised by 18 Israeli companies in overseas stock exchanges (compared to $1.2bn in 2013).  Once again, Israel's impact on global medicine, health, agriculture, irrigation, energy alternatives, science, cyber, homeland security and defense, as well as Wall Street, supersedes the impact of Gaza Strip.
But, Israel is increasingly isolated…

Since 1948, a recycled assumption has maintained (e.g., the 1975 "Zionism is racism" UN resolution) that an anti-Israel global Tsunami is about to smother the Jewish State, triggering unprecedented isolation, the collapse of its international standing and the breakdown of its ties with the US, unless it committed itself – in the unpredictable, unstable, violent Middle East - to re-dividing Jerusalem, uprooting over 500,000 Jewish settlers, and retreating to a 9-15 mile sliver along the Mediterranean, which is dominated by the mountain ridges of Judea and Samaria.

However, the demise of the USSR (which facilitated the 1991 revocation of the USSR-sponsored "Zionism is Racism"), the affirmation of the USA as the dominant super power, the upgraded US-Israel mutually-beneficial cooperation, and the emergence of Israel as a global commercial and military high tech power, have enhanced Israel's global standing, dramatically expanding Israel's global networking, beyond Europe, into India, China, Russia, the former Muslim Republics of the USSR, Latin America, all irrespective of diplomatic setbacks. 

 Thus, the Israel-India trade balance catapulted from $200mn in 1992 (following the 1991 establishment of diplomatic ties) to $5bn in 2014.  According to the January 3, 2015 issue of the London-based Qatari daily, Al Araby al Jadid, the substantial improvement in the attitudes of Africa and India toward Israel reflects their growing benefits from Israel's advanced civilian and military technologies. "The shift in India's position will have an impact on the behaviour of other countries. Technology has also played a key role in the development of relations between Israel and China, which is interested in Israel's advanced technology to boost its economic capability, especially in industry and agriculture…. Israel's advanced technology developments have boosted its diplomatic ties and enhanced its security."  According to Bloomberg, Israeli exports to Asiahave soared significantly, from 13% in 2000 to 23% in 2014, equaling exports to the USA.

But, Israel is increasingly isolated…

 The Israel-China trade balance has surged from $51mn in 1992 to almost $11bn in 2013, with China rising to Israel's second top export destination. Free trade agreement negotiations will be launched in 2015.  The December 14, 2014 issue of the Wall Street Journal reported that China has joined the US, European and Russian investors, regularly visiting Israel's high tech parks in their search for companies, startups and investments. The giant Chinese insurance group, Ping An Insurance – which has already invested in eight Israeli startups - considers the US and Israel as the two key arenas for venture investments.  In 2011, ChemChina acquired Israel's Adama, a pesticides manufacturer, for $2.4 bn.  In 2013, China's Fosun Pharma acquired Israel's Alma Lasers for $240mn.  In 2014, China's Bright Food Group acquired a majority stake in Israel's Tnuva Food Industries for $960mn.  

But, Israel is increasingly isolated…

 The Israel-South Korea trade balance increased from $50mn in 1987 to $2.5bn in 2014, highlighting the surging commercial and military ties, featuring the global giant, Samsung Electronics and its two research and development centers in Israel, and additional global South Korean companies such as Hyundai Corp., Daewoo International, Posco Engineering, LG Electronics, Korea Aerospace Industries, Huneed, Firstec, KIA Motors, etc. Japanese companies are, gradually, venturing into Israel; and Singapore-based funds have invested in Israel's high tech, as demonstrated by Broad Peak Master Fund, which led a $15mn round of private placement in the Israel-Singapore Trax Technology. The Australia-based Allflex, the worldwide market leader in animal identification products, acquired the livestock monitoring and intelligent milking solutions Israeli company, SCR Engineers Ltd., for $250mn.

But, Israel is increasingly isolated…

 Israel has substantially expanded its commercial and military ties with the former Muslim Republics of the USSR, Kazakhstan, Uzbekistan, Turkmenistan and Azerbaijan.  According to the Begin-Sadat Center for Strategic Studies, "over the last twenty years, the ties between Israel and Azerbaijan have improved drastically."  Israel receives reliable oil supplies from Azerbaijan, while supplying Azerbaijan with advanced weapon systems (e.g., unmanned aerial vehicles), counter-terrorism systems and training, vital intelligence on Islamic terrorism and medical, irrigation, agricultural and cyber technologies. 

But, Israel is increasingly isolated…

Bloomberg reported on December 9, 2014 that the European Union signaled interest in a possible pipeline to import Israeli offshore natural gas via Cyprus and Greece, in order to reduce reliance on Russia.  However, there is another option of exporting Israeli offshore natural gas through Turkey, which has been a vicious critic of Israel, while expanding it trade balance with the Jewish State: $5bn in 2014, compared to $3.4bn in 2009. The harsh British talk toward Israel is contrasted by the British walk: a 28% and 38% increase of the trade balance Israeli export in 2014 over 2013. 

But, Israel is increasingly isolated… Or, not.