Israel’s True Riches
Israel's Brain Wealth vs. Arab-Islamic Oil Riches
..."In your seed all the nations
of the earth shall be blessed, because you have obeyed My voice."
- Genesis 22 : 18
being outnumbered by a ratio of over 30+ to One ( Arab Population
around Israel ) the Israeli Jews have built up a little paradise
of their own in what was only 70 years ago a barren
desert...While most Arab countries use Israel as the scapegoat for their
failed domestic policies, Israel continues to produce some
of the brightest minds on the earth, a fact that
can be verified just by studying the Nobel Prize winners
of the Century in all areas...
Question: What do America’s premier investor, Warren
Buffett, and Iran’s toxic president, Mahmoud Ahmadinejad, have in common? Answer: They’ve both made a bet about
Ahmadinejad declared on Monday that Israel “has reached its final phase and will soon be
wiped out from the geographic scene.”
By coincidence, I heard the Iranian leader’s statement on Israel Radio
just as I was leaving the headquarters of Iscar, Israel’s famous precision tool company, headquartered in the Western
Galilee, near the Lebanon border. Iscar is known for many things, most of all for being the first enterprise that Buffett
bought overseas for his holding company, Berkshire Hathaway.
Buffett paid $4 billion for 80 percent of Iscar and the
deal just happened to close a few days before Hezbollah, a key part of Iran’s holding company, attacked Israel in July
2006, triggering a monthlong war. I asked Iscar’s chairman, Eitan Wertheimer, what was Buffett’s reaction when
he found out that he had just paid $4 billion for an Israeli company and a few days later Hezbollah rockets were landing outside
its parking lot.
Buffett just brushed it off with a wave, recalled Wertheimer: “He said, ‘I’m not
interested in the next quarter. I’m interested in the next 20 years.’ ” Wertheimer repaid that confidence
by telling half his employees to stay home during the war and using the other half to keep the factory from not missing a
day of work and setting a production record for the month. It helps when many of your “employees” are robots that
move around the buildings, beeping humans out of the way.
So who would you put your money on? Buffett or Ahmadinejad?
I’d short Ahmadinejad and go long Warren Buffett.
Why? From outside, Israel looks as if it’s in turmoil,
largely because the entire political leadership seems to be under investigation. But Israel is a weak state with a strong
civil society. The economy is exploding from the bottom up. Israel’s currency, the shekel, has appreciated nearly 30
percent against the dollar since the start of 2007.
The reason? Israel is a country that is hard-wired to compete in
a flat world. It has a population drawn from 100 different countries, speaking 100 different languages, with a business culture
that strongly encourages individual imagination and adaptation and where being a nonconformist is the norm. While you were
sleeping, Israel has gone from oranges to software, or as they say around here, from Jaffa to Java.
The day I visited
the Iscar campus, one of its theaters was filled with industrialists from the Czech Republic, who were getting a lecture —
in Czech — from Iscar experts. The Czechs came all the way to the Israel-Lebanon border region to learn about the latest
innovations in precision tool-making. Wertheimer is famous for staying close to his customers and the latest technologies.
“If you sleep on the floor,” he likes to say, “you never have to worry about falling out of bed.”
kind of hunger explains why, in the first quarter of 2008, the top four economies after America in attracting venture capital
for start-ups were: Europe $1.53 billion, China $719 million, Israel $572 million and India $99 million, according to Dow
Jones VentureSource. Israel, with 7 million people, attracted almost as much as China, with 1.3 billion.
who heads engineering at the Technion, Israel’s M.I.T., told me: “In the last eight months, we have had delegations
from I.B.M., General Motors, Procter & Gamble and Wal-Mart visiting our campus. They are all looking to develop R &
D centers in Israel.”
Ahmadinejad professes not to care about such things. He was — to put it in American
baseball terms — born on third base and thinks he hit a triple. Because oil prices have gone up to nearly $140 a barrel,
he feels relaxed predicting that Israel will disappear, while Iran maintains a welfare state — with more than 10 percent
Iran has invented nothing of importance since the Islamic Revolution, which is a shame. Historically,
Iranians have been a dynamic and inventive people — one only need look at the richness of Persian civilization to see
that. But the Islamic regime there today does not trust its people and will not empower them as individuals.
oil wealth can buy all the software and nuclear technology you want, or can’t develop yourself. This is not an argument
that we shouldn’t worry about Iran. Ahmadinejad should, though.
Iran’s economic and military clout today
is largely dependent on extracting oil from the ground. Israel’s economic and military power today is entirely dependent
on extracting intelligence from its people. Israel’s economic power is endlessly renewable. Iran’s is a dwindling
resource based on fossil fuels made from dead dinosaurs.
So who will be here in 20 years? I’m with Buffett: I’ll
bet on the people who bet on their people — not the people who bet on dead dinosaurs.
Source : Friedman N.Y. Times