The big deal

The biggest financial deal in Israeli history was announced today, at the same
time as the first meeting of the Olmert Cabinet. What a way to start!
Warren Buffet of Omaha Nebraska, the second richest man in the world and
considered to be the most successful investor in the world, bought an Israeli
company, Iscar, for b$4. He bought 80% of the company, and the other 20%
remains in the hands of the Wertheimer family, that now becomes the richest in
Israel. The 20% of the company not sold makes defense equipment for Israel
and so was considered to be essential for defense purposes. Iscar is a "dye
and tool" metal parts manufacturer, the second largest in the world, no sexy
software or internet fantasies, but a good solid company, with a consistent
15% growth rate. Buffet who is not Jewish and has never before dealt with
Israel, was very positive about this deal. He was quoted as saying that if
anyone knows of another company in Israel that is as good as Iscar, call him
collect, and he will buy it. He intends to keep the whole company intact as
it is, with at least 2,000 experienced specialists.
Stef Wertheimer is famous in Israel for having started the concept of the
industrial incubators, that are scattered around the country and that help new
struggling innovative companies to get started. That is why there are more
start-up companies in Israel than in all of Western Europe combined, and
Israel is second only to the US in this respect. Wertheimer started the Tefen
industrial park in central Galilee, where high end technology companies are
situated, and where he built a "model" town, Kfar Vradim, that is like a US
suburb.
This deal is a real fillip for the Israeli economy, not only will the Israeli
Government reap ca. b$1 in taxes from the deal, that will reduce the
national debt, but economists expect this deal to result in a further ca. b$10
of foreign investments being pumped into the Israeli economy.
What a stark contrast with the Palestine Authority, that is not only bankrupt,
but in which the Government (such as it is) employs ca. 30% of the working
population, one third of them in security forces. Yesterday there was a major
demonstration in Gaza in which thousands of people demonstrated because they
have not been paid since March. The Quartet had a meeting at the UN in which
the EU representative proposed a shared way that they could pay for the
humanitarian requirements of the Palestinian population while avoiding
supporting the Hamas Government. And what is the main initiative of the Hamas
Government, to set up yet another security force that will protect them. This
is because Fatah controls all the security forces in the PA, and Pres. Abbas
has refused to give up control to the elected Government. So now they are
starting their own loyal force to protect themselves.
It was announced by The Sunday Times that Israel prevented an assassination
attempt by Hamas on Pres. Abbas when he was due to visit Gaza recently. He
called off the visit, and avoided the attempt. Jordan also invited Hamas to
send a delegation to Amman to see for themselves the evidence that they have
captured of arms and planning by a Hamas squad to assassinate the Jordanian
Royal family. Hamas PM Haniyeh, who denied the plot, refused to send a
delegation (he knows the truth already). Also, three gunmen were killed today
in clashes between Hamas and Fatah security forces.
So while Israel builds its economic strength, the PA is mired in an economic
morass and potential civil war.
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