Balans van buitenlandse investeringen in Israël (Bank of Israël)“Despite BDS, Israeli firms enjoy a foreign investment boom”

With pro-boycott arguments failing to make an impact, Bloomberg report finds, fertile conditions are driving record capital flow

Last week the Israeli State Comptroller’s Office issued a scathing report chastising the Foreign Ministry for not having a cohesive strategy to fight the Boycott, Divestment and Sanctions movement, which targets Israel over its perceived ill-treatment of the Palestinians.

But despite the many “failings” detailed in the report, underlining an inability to present any significant political achievements in the battle against BDS, the movement seems to be having little economic impact, according to a Bloomberg report examining foreign capital flow into the country.

While BDS has seen some victories in its efforts to stop international entertainers from performing in Israel and encourage companies to divest from Israeli firms, total foreign investment in Israeli assets has in fact gone up, with 2015 clocking a record high of $285.12 billion, Thursday’s report said. That’s a threefold increase since 2005, when the BDS campaign was first launched.

“We don’t have a problem with foreign investment in Israel — on the contrary,” Yoel Naveh, chief economist at Israel’s Finance Ministry, told Bloomberg.

The report showed that even firms based in the West Bank — a specific target of BDS — have seen an increase in investment. It surveyed nine major Israeli firms with varying ties to settlements that all recorded a hike in non-Israeli holdings over the past three years.

Of the companies included, the two that saw the largest percentage increase in their foreign holdings were banks: Bank Leumi, Israel’s largest by total assets, went from 33 percent to 50%; and Israel Discount Bank more than quadrupled its percentage, going from 13% to 55%.

A number of reasons were cited for the sustained increase in foreign investment.

“Money managers, economists and government officials say Israeli assets are an attractive alternative to weak performers elsewhere. The country’s economy is slowing but growing faster than those of the US and Europe and its interest rate is higher,” the report said.

A forecast of 2.8% growth for the Israeli economy in 2016 compared with just 1.8% in the US and Europe, coupled with an appreciating shekel, creates the perfect conditions for breeding foreign investor confidence.

In addition, the moral arguments presented by BDS seem to have little impact on potential investors.

The BDS movement says it targets Israel primarily over its treatment of the Palestinians through its continued military presence in the West Bank and blockade of Gaza. Yet, according to the report, many investors reject the idea “that investing in Israeli innovation and natural gas violates Palestinian rights, and that Israel’s misdeeds are so exceptional that they justify singling it out for censure.”

In January 2014 GM of the Netherlands, one of the 20 largest pension asset managers in the world, decided to divest from five Israeli banks because of their involvement in financing the construction of Jewish settlements in the West Bank. Last year the US United Methodist Church followed suit, adding the banks to a list of companies in which it will not invest. More recently, Norway’s $860 billion sovereign wealth fund excluded Africa Israel Investments from its portfolio.Still, some companies have been swayed by the BDS movement and chosen to pull funding from Israeli projects and companies.

But according to Israeli officials, the damage is but a drop in the vast ocean of foreign funding.

True, there are “some institutional investors that said they are pulling their investments,” Naveh, the Finance Ministry economist, said, but based on the continued increase in foreign investment, “we don’t need it.”

Lees ook:

“The Boycott Israel Movement May be Failing” – Bloomberg 

Physicist Stephen Hawking shunned a Jerusalem conference hosted by Israel’s president, singer Lauryn Hill canceled a Tel Aviv concert and a giant Dutch pension fund blacklisted five Israeli banks. All are signs that an international movement to isolate Israel is gaining ground.
Yet an examination of foreign capital flow into the country shows the opposite trend — a steep increase. Foreign investments in Israeli assets hit a record high last year of $285.12 billion, a near-tripling from 2005 when the so-called Boycott, Divestment and Sanctions (BDS) movement was started by a group of Palestinians.

Psychological Impact
Barghouti argued that the BDS movement’s strength is precisely in its “indirect, palpable psychological impact on the mainstream Israeli psyche about the country becoming more ‘isolated’ from the world.”
He pointed to the boycott of apartheid South Africa in the 1980s that helped lead the country to dismantle its racially exclusivist policies. BDS is expanding more quickly than that boycott which started in the 1960s, he said. Large corporations pulled out later, following economic sanctions imposed by the U.S., Europe and Japan.

Sheldon Adelson, a Jewish-American billionaire who has helped raise millions to fight BDS, says he is not worried about possible economic damage for Israel. Adelson said he is encouraged by the efforts in more than 20 state legislatures to pass laws banning contracts with entities that boycott based on race, color, religion, gender, or national origin.
“This is a PR battle and its biggest threat is demonization of Israel,” Adelson said in an interview. …

“SodaStream CEO: To Improve Your Company’s Sales, Get Attacked by BDS Movement” – The Algemeiner

Times of Israel / Bloomberg – foto: Balans van buitenlandse investeringen in Israël (Bank of Israël)