Feb 12, 2009

Israeli Economy Slowing Down, but Banks Not in Crisis

Long-term prospects more positive in Israel than other western nations
Feb. 12, 2009

The global financial crisis took awhile to cross the continents, but its tentacles have at last reached the Israeli economy forcing the Bank of Israel to revise its 2009 forecast to reflect a .2-percent decline rather than 1.5-percent increase.

The Israeli economy has more easily adapted to hostility than to these external factors. In 2006, the 40-day war with Hizbollah only briefly interrupted an economic boom. But this growth spurt came to a halt in the third quarter of 2008 as the global recession entered the scene.

“The effects of the global financial crisis on real economic activity in Israel are evident,” the Bank of Israel said in a report. “World trade, which exerts a major influence on domestic activity, has dropped, and is expected to fall further.”

The Bank of Israel is forecasting a 6.9 percent drop in exports and a 6.4 percent fall in imports in 2009. Foreign exports make up 45 percent of Israel’s GDP.

According to government figures, the Israeli economy expanded by 4.1 percent in 2008 to a record $190 billion capping off four years of higher than 5 percent annual growth. The slowdown hit Israel when demand for exports plummeted. Foreign companies downscaled their investment projects and consumers reduced spending.

“Israel’s economy is oriented toward export markets and other international activity,” the Tel Aviv Stock Exchange said in its annual report. “It is expected that the global crisis will adversely affect exporting firms as well as Israeli entrepreneurs abroad.”

Even so, Israel’s economy is expected to weather the situation better than many other developed nations.

“It’s going to be pretty gloomy, but it’s not like the United States or Germany,” said economist Jonathan Katz at HSBC. “It will be more of a slowdown than a recession.”

Also working in Israel’s favor is a conservative and stable banking system that is not in crisis.

“Happily for us, Israel’s economy hasn’t caught the three American diseases--consumer and private credit greater than 50 percent of GDP, a bursting real estate bubble, and a bankrupt financial system because of the first two diseases (and other causes)” wrote Ha’aretz financial reporter Guy Ronik. “Americans spent the last decade living well beyond their means. Israelis saved.”

Another factor in slowing the crisis’ arrival in Israel has been the Bank of Israel’s steady hacking of interest rates, down to 1 percent in January from 2.5 percent in November. In fact, investment bank UBS analyst Reinhard Cluse maintains his long-term forecast for 2010 of 2.7 percent growth. UBS said it expects a moderate recovery as early as the second half of the year.

“Following years of prudent fiscal policy, Israel is one of the few countries in (Europe Middle East Asia) where the government now has substantial scope for fiscal stimulus,” Cluse wrote. “After a balanced budget in 2007 and a deficit of 2.1 percent of GDP in 2008, we expect the deficit to rise to 4 percent of GDP or even higher in 2009, thus helping to prevent a more serious decline in growth.”

Feb 11, 2009

Livni surprises with lead, but results remain inconclusive

Right-wing bloc could propel Netanyahu to PM
Feb. 11, 2009

(Article originally posted here.)

TEL AVIV - Tzipi Livni's Kadima party took a surprise lead in Israel’s parliamentary elections on Tuesday, but even if she edges out her rival Benjamin Netanyahu in a final vote count the foreign minister could fail to rally enough seats to build a coalition government.

Despite a one- or two-seat margin for the centrist Kadima party predicted in early exit polls, the left-wing bloc is outnumbered by a strong showing of right-wing, nationalistic and religious parties that casts doubt on Livni’s ability to establish a coalition and become prime minister.

“With all due respect to Tzipi Livni, she won’t be able to build a government. And that is very clear,” said Gilad Erdan, a parliament member on the Likud ticket. “Those in Israel who opposed the disengagement (withdrawal from Gaza in 2005), those who oppose giving up territories for nothing now have the clear majority.”

At Likud headquarters a victorious mood quickly deflated when initial exit polls announced Kadima as the front runner. But party members were quick to spin the results in party leader Netanyahu’s favor.

“Tzipi Livni only has 43 votes in order to create a government and we have 63 members of Knesset who support the idea that Benjamin Netanyahu will be the next prime minister of Israel,” said Likud Knesset Member Reuven Rivlin.

Both Livni and Netanyahu declared victory Wednesday morning and Livni left the door open for her rival to join her government.

“I proposed to you before the elections were set to join a unity government under my leadership. You refused,” she said. “Now all that is left is to do the right thing, to honor the decision of the citizens of Israel, to do what is right for Israel at this time…and to join a unity government led by us.”

Netanyahu hinted at the possibility of working with Livni, but with him as head of the government.

“From this day on, the right wing bloc rises to an absolute majority in the Knesset,” he said. “There is no doubt regarding our own movement’s meteoric rise. In the last Knesset we had only 12 seats, 10 percent of the Knesset. We have more than doubled our power and grown more than any other party.”

After all the votes are counted, President Shimon Peres has one week to decide which party leader will be first to attempt to build a government and the prime minister-designate then has six weeks to form a coalition. Peres may decide that even with fewer mandates Netanyahu has a better chance at establishing a stable government.

Israel Beiteinu (Israel our Home) became the third largest party, surpassing Labor, traditionally one of the top two parties. A polarizing figure who has been called a racist by the media and opponents, Israel Beiteinu leader Avigdor Lieberman appears to have galvanized the secular Zionist vote.

Lieberman’s campaign theme, “No loyalty, no citizenship” refers to his proposed loyalty test aimed at Israeli Arab members of parliament who speak out against the Jewish state and, in some cases, advise the Palestinian government. Lieberman’s views struck a cord among voters who are disillusioned with faltering peace talks and unabated terror attacks.

Leading up to the elections many factors indicated a shift to the right, including a desire to balance Barack Obama’s democratic administration with a more hawkish Israeli government in U.S.-led negotiations between Israel and the Palestinians.

Likud jumped from 12 seats in the previous government to an estimated 27 or 28, while Israel Beiteinu surged to a likely 16 seats from 11. The right-wing bloc is bolstered by religious parties Shas, Jewish Home and United Torah Judaism.

“The conservative side of the political spectrum has gotten stronger,” observed Dore Gold, author and director of the Jerusalem Center for Public Affairs.

The left-wing vote was split just three ways. Kadima led with 29 possible seats. Rounding out the leftist parties was Labor, which saw a dismal drop from 19 seats to an estimated 13, and Meretz, expected to earn four or five seats. In that context, Prof. Barry Rubin of the Interdisciplinary Center in Herziliya said Kadima’s apparent edge is not surprising despite Likud’s strong lead in the polls in recent weeks.

Rubin also disagrees with the assumption that Israelis voted more hawkishly this year and that the Likud party is right wing.

“The real move has been toward the center, which is represented not only by Kadima and Likud but also by Labor,” he wrote in Tuesday’s The Jerusalem Post. “A greater majority is about to vote for parties close to centrist positions than at any time in history.”

The final voter turnout was 65.2 percent compared to 63.2 in 2006.

Feb 10, 2009

Election Day Reading

Feb. 10, 2009

The polls are open and all the major party leaders have already cast their votes. I will be at Likud headquarters this evening covering the results. Tomorrow I will post articles and reaction to the elections.

In the meantime, here's some good reading for the day:

High-ranking Foreign Office diplomat arrested over anti-Semitic gym tirade London Daily Mail
Sounding a lot like Iran's A'jad: Stunned staff and gym members allegedly heard him shout: 'F**king Israelis, f**king Jews'. It is alleged he also said Israeli soldiers should be 'wiped off the face of the earth'. Sometimes anti-Israel IS anti-Semitism, just couched in political terms making it appear on the surface less ugly.

Dispatch from the Gaza border by Michael Totten
Fewer than twenty Israelis have been killed by rocket fire from Gaza since Hamas and Islamic Jihad adopted the tactic. ... It’s not just about casualties, though. Thousands of rockets have fallen on Sderot. And every rocket launched at the city triggers an air raid alert. Everyone within ear shot has fifteen seconds to run into a shelter. Imagine sprinting for cover 5,000 times.

Ending the West's Proxy War Against Israel Wall Street Journal online
As long as the West continues to subsidize Gaza's extreme demographic armament, young Palestinians will likely continue killing their brothers or neighbors. And yet, despite claiming that it wants to bring peace to the region, the West continues to make the population explosion in Gaza worse every year. By generously supporting UNRWA's budget, the West assists a rate of population increase that is 10 times higher than in their own countries.

Feb 9, 2009

Hamas' Secret Service: the Ghost unit

Feb. 9, 2009

A slightly chilling article from The Jamestown Foundation by Abdul Hameed Bakier describes a Hamas unit called “Ghost” Suicide Bombers:
Recently, Islamic and jihadi internet forums circulated an article entitled “The Ghost suicide bombers. Who are they? And how do they spend their day?” (hanein.info, January13). The posting, written by the Gaza correspondent for the influential Doha-based Islamonline website, included a short interview with the trainers of Hamas’ suicide bombers (Islamonline.net, January 12).

Islamonline’s correspondent, Muhammad al-Sawaf, said the suicide bombers, known as “Ghosts” to other Gaza militants, are the first line of defense in Gaza. They spend up to 48 hours at a time in ditches, reciting verses from the Quran while waiting for Israeli forces to pass by in order to blow them up. The bombers belong to the military wing of the Izz al-Din al-Qassam battalions of Hamas. Abu Moath, an al-Qassam leader supervising the suicide bombers, said the bombers are very determined individuals chosen carefully by Hamas: “They live like any other pious Palestinian youth. Some of them are university students that go about their lives without raising unwanted attention or bragging about their end mission. They go through a special faith program.”

Since the start of the conflict in Gaza, the “ghost” suicide bombers have isolated themselves from families and friends. They spend their time hidden close to areas where Israeli forces deploy. On the selection criteria for suicide bombers, Abu Moath briefly explained that only young people are chosen from the ranks of al-Qassam’s battalions, which number up to ten thousand fighters. Abu Moath disclosed females are also recruited to the ranks of the suicide bombers. The candidate bombers are secretly scrutinized by al-Qassam lieutenants to make sure they are religiously committed and responsible. The next phase is to notify the bomber of their acceptance and put them through psychological and military training on weapons and tactics, especially those used by the Israeli Defense Force (IDF). Abu Moath asserts that all through the selection and training phases the suicide bombers are tutored by religious clerics and Islamic preachers. Upon completion of training, the bombers are sent behind enemy lines. Each group of suicide bombers is compartmentalized and does not know the location or composition of other groups to avoid compromising their comrades if one of them is captured by the Israelis. Abu Moath admits such captures happen very often because the suicide bombers operate behind enemy lines. Each suicide bomber is issued special weapons and a custom-tailored explosive belt.

Other Hamas units of suicide bombers include the “Booby-Trapped Martyrs.” These martyr units are designed to deploy on the streets and alleys of Gaza’s cities, armed with heavier explosive belts than those used by the “ghosts.” These units are as secret and compartmentalized as the “ghost” suicide bombers and deploy with Hamas commando units tasked with kidnapping Israeli soldiers.

Many forum chatters hailed and prayed for the “ghost “ and “martyr” suicide bombers, posting comments such as: “It is only my lack of luck that I am not with them. I wish them all the best in this life and hereafter. May God give them steadfastness and determination, amen.”

In another interview by Islamonline correspondent al-Sawaf, al-Qassam Brigades spokesman Abu Obeida said Hamas fighters have surprised the Israeli forces with offensives attacks rather than the expected defensive operations. He said the suicide-bomber Mahmoud al-Rifi, whom he claimed stayed for days in a ditch on the al-Raes mountain west of Gaza city and blew up an Israeli commando unit, was one example of Hamas’ successful new guerilla warfare tactics. However, other sources said al-Rifi did not carry out a suicide attack; rather, he waited for Israeli forces in a ditch on the al-Raes mountain and attacked a detachment of Israeli commandos with a machine gun, killing two Israeli soldiers before being killed while trying to take a third injured soldier prisoner (muslm.net January 9).

According to earlier threats by Hamas leaders, Hamas is expected to resume suicide bombing attacks in Israeli cities in retaliation for the war on Gaza. Regardless of the Israeli wall built to prevent suicide bombers from entering Israel, Hamas leaders allege they have managed to infiltrate tens of their suicide bombers who are already in place in Israel and the West Bank awaiting orders (alrainews.com, December 22, 2008). Even though Hamas has enough experience and possible accomplices among Palestinians living in Israel to resume suicide attacks in Israeli cities, Israeli forces demonstrated their ability to prevent suicide attacks in the assault on Gaza. The absence of successful suicide attacks on Israeli forces in the conflict is likely an indication of Hamas’ inability to recruit enough volunteers to perpetrate suicide bombings, regardless of whatever claims are made by the Hamas leadership.

UN-neutral Getting Bitten by the Dog it Feeds

Summarizing recent weeks of the Hamas-UN battle
Feb. 9, 2009

If nothing else positive, and there was little positive, the Gaza war has brought to light several inconsistencies, or shall I say ‘UN-consistencies,’ when it comes to the United Nations and its dealings with Hamas, Israel and the Palestinians.

First, here are some incidents that have occurred in recent weeks:

1. When Israelis saved Arab students trapped in a United Nations Relief and Works Agency (UNWRA) school in East Jerusalem, they encountered pictures depicting the IDF as murderers. Several students fell into a six-foot deep hole when a floor in the school collapsed on Feb. 1. Israeli responders found drawings depicting Israeli soldiers at the Gaza border shooting Palestinians at them at point blank range while they tried to get food. Another picture, drawn by a student, showed an Arab shot to death by an Israeli soldier.

2. The United Nations agency in charged of a school in Gaza where dozens of civilians were killed by Israeli mortar fire in Operation Cast Lead has admitted to employing terrorists to work at its Palestinian schools in the past, has no system in place to keep members of Hamas or Islamic Jihad off its payroll and provides textbooks to children that contain hate speech and other incendiary material against Israel and Jews.

3. UNRWA brought the media to watch while it tried to pass unapproved goods through the Gaza border Tuesday, Feb. 3. The Israeli army, as expected, turned away the unappoved trucks then slammed UNRWA for trying to pass through the unkosher good and bringing the media to film Israel’s rejection of the trucks. Israel’s Coordinator of Government Activities in the Spokesman Maj. Peter Lerner said the incident was a “regretful provocation. ... UNRWA receives preferential treatment at the crossings, and today alone 50 of its trucks were allowed in.”

Just two days later, however, Hamas put on its own show albeit not for the cameras. Hamas turned against its complicit ally, the UN, and twice in one week (Feb. 3 and 5) commandeered hundreds of tons of humanitarian aid from UNRWA. The UN actually ceased shipping aid over the border until Hamas returns the goods.

Perhaps the UN is beginning to see the light. Or at least one ray. In another first, it announced this week it will probe Hamas’ use of children as human shields during the war, according to The Jerusalem Post.

“It is still very difficult for us to say that it was actually happening and we still need to conduct a full investigation into what exactly took place... but we are not denying that it happened; it is absolutely possible that Hamas was using its civilians as human shields,” said UN special representative for children and armed conflict Radhika Coomaraswamy.

A small leap for morality, but a huge step in the right direction for the UN nonetheless.

Also, in a report released last week, a former legal official with UNRWA accused the organization of politicizing the Palestinian refugee issue. James Lindsay, UNRWA’s legal advisor from 2002 until 2007, said the agency should conduct background checks so as not to hire terrorist organization members anymore; help those who wish to move out of refugee camps by expanding loans; and shift from a “status-based” system of aid designated for refugees to a “needs-based” system.

Andrew Whitley, director of the UNRWA representative office at UN headquarters, slammed the report and immediately did what the report lambasted the UN for: politicizing the situation.

“Someone reading this paper with no background would assume that the Israeli government was a benign actor.,” he said. “No mention is made of the occupation of the West Bank and the Gaza Strip.”

But NGOs are notoriously biased against Israel. A Jerusalem-based watchdog, NGO Monitor, documented more than 500 statements by some 50 NGOs just in one month during the recent fighting in Gaza.

“These statements are characterized by overwhelming condemnation of Israel, devoting minimal attention to Israeli human rights and casualties,” the organization reported. “These same groups were markedly hesitant to condemn the widespread and illegal use of human shields by Hamas. ”

A Palestinian from Gaza blamed Hamas for the humanitarian crisis in the Strip. Nuaf Atar, a Fatah operative captured during the operation, accused Hamas government officials of controlling humanitarian aid Israel allowed in and selling it instead of distributing it for free, as was intended. But Israel continues to get blamed by the NGOs and the international community, which clamors for it to open the borders for a more free flow of goods. Goods that never make it to the people who need them.

NGO Monitor Executive Director Gerald Steinberg summed it up best: “The consistent attempt to demonize Israel in the media and in the courts while turning a blind eye to the illegal activities of Hamas demonstrates that many human rights groups have lost their moral compass.”

Carter strikes again

Former president exhibit his usual anti-Israel gusto
Feb. 9, 2009

I have a hard time choosing. Is former Pres. Jimmy Carter blindly optimistic or blatantly anti-Israel? He can’t be an optimist, he was a US president, but that leaves us with the latter.

If you are going to solve the Israel-Palestinian issue you cannot be against wither side, but in an interview with the Houston Chronicle, Carter clearly outlines which side he believes must pay up in order to achieve peace. Perhaps its the reporter’s fault for not asking tough questions, but he never puts the onus on Hamas or the Palestinian Authority for stopping acts of terrorism.

Carter, 84, talks about his new book, the assertive and cheerily titled “We Can Have Peace in the Holy Land.” I have yet to read the book, but in the interview with reporter Mike Tolson, Carter, 84, notes that he is optimistic for “peace” because “the vast majority of Israeli citizens also are committed to withdrawing from the West Bank.” No recognition of the State of Israel by Hamas or cessation of terror is a prerequisite for peace apparently.

He goes on to say that the war in Gaza has engendered “more intense hatred and resentment against Israelis for doing this.” No mention of the Hamas rockets that were unanswered for nine years and which terrorized innocent civilians occasionally killing a few, but only a few because they are miraculously inaccurate..

Feeling at one with The One is he?
“Most presidents have been very cautious and have waited until the last part of their administration before they would expend that capital, and it’s too late. (Obama) has taken a different position, as I did 30 years ago. I started the first day, even before I became president, to do that.”
Carter insults the “Israeli lobby” in the United States: “You have to remember that the major Israeli lobbies, they’re not in favor of peace. They never have professed to be. What they are in favor of is protecting the policies of whatever government is in charge in Israel. If you look at their Web sites, they make that quite clear. So they’re for Israel, they’re not for peace between Israel and its neighbors.”

How interesting. He is basically calling Israel supporters war mongers. This is an incomprehensible insult to intelligence and to the people who support Israel. No mention of Hamas supporters and pro-Palestinian lobbyists. They are for peace.

In conclusion, if you don’t agree with Carter’s approach to peace, then you are not for peace. Diplomatic, hey?

Feb 5, 2009

Troubles with Turkey cause Jews to rethink Armenian genocide

Feb. 5, 2009

And now for an issue dear to my heart: Jews check Armenian genocide stance. Only fitting that one genocide survivor support another. However, the article is thin on proof of an actual movement. From the Jerusalem Post:
An official with a leading American Jewish organization told the The Jerusalem Post on Monday that a deterioration in Israel-Turkey relations might prompt his group and others to reconsider Armenian efforts to win recognition of the century-old Turkish massacres as genocide.

A bill that would ensure such recognition by the US, which was backed by Rep. Adam Schiff - a Jewish Democrat who represents a heavily Armenian area of Los Angeles - failed to make it to a Congressional vote in 2007. However, it sparked a row in the American Jewish community between those who sided with Turkey in an effort to protect Israel's political interests, and those who argued that Jews were particularly responsible for helping other groups block the public denial of genocide.

"No Jew or Israeli in his right mind will insult Turkey," the official told the Post. "But next time... they might not come to Turkey's aid or equivocate quite so much on the issue."

The Bush administration opposed the bill out of concern for what it would do to US-Turkey relations.
I’d like to add that even several Israeli politicians oppose recognition for the same reason.
The current blowup between Israel and Turkey comes amid expectations that the Obama administration will name academic and writer Samantha Power, an expert on genocide, to a key National Security Council post dealing with multilateral institutions. Power has been outspoken in labeling the Turkish massacre of Armenians genocide, albeit from outside the government.

Anti-Defamation League head Abraham Foxman - whose opposition to the Armenian genocide legislation in 2007 provoked widespread criticism - told the Post that as long as Israel maintained its diplomatic ties with Turkey, he saw no immediate reason to change his position on any future genocide resolutions.

"This is not a punishment or a reward issue - we don't change our position on what's right or wrong based on what people say," Foxman said. "The interests between Israel and Turkey continue."

Foxman also noted that he knew of Jewish friends who had cancelled trips to Turkey over Erdogan's comments, but described the Erdogan flap as a disagreement between "friends."
The Armenian community of some 20,000 in Israel has long lobbied the Israeli government to recognize the genocide. Several Israel scholars have taken up the cause arguing that of all people groups, Jews should express sympathy with genocide victims. But the issue hasn't taken hold in the political world. Three years ago, Knesset Member Yuri Shtern told me (noticing that my married name is Armenian) that he and Israel's chief Rabbi Yona Metzger traveled to Armenia and were fighting for recognition. Shtern--a fair and compassionate politician--has since died of cancer, however, and no one has taken his place on this issue.

On the other hand, it is rare for Israel to have strong ties with a Muslim nation and recognizing the genocide would risk their friendship with Turkey. But after the outburst of Turkish PM Tayyip Erdogan at the Davos conference, Israelis are starting to see just how far their friendship with Turkey stretches, or not. Erdogan stalked off the stage there on Jan. 29, calling Israeli Pres. Shimon Peres a murdered.

Since then relations ahve been strained with both sides trying to patch things. But trust has been damaged.

Turkey: “It’s not a business-as-usual relationship anymore,” said Cengiz Candar, a columnist for Radikal, a Turkish daily. “It’s a very uneasy sort of cohabitation in this region now.”

Israel: "He has burned all the bridges with Jerusalem,” said one senior Israeli official, who spoke anonymously to the NY Times. “He won’t be seen as an honest broker anymore.”

Turkey denies slaughtering 1.5 million Armenians beginning in 1914. Recognition of the genocide would mean denying Turkey's claims, thus ruining relations with the vast Islamic country.

To learn more about the Armenian genocide, of which my husband's grandparents were survivors, check this out: Armenian Genocide (http://www.armenian-genocide.org)