"Boycotts will have low impact on growth in Israel"

Financial Immunities: The ability of organizations to pinpoint Israeli targets and run effective consumer boycotts against them, is almost non-existent.

"The current risk to Israel's economic growth from an economic boycott is very minor and limited," Financial Immunities Ltd. CEO Adam Reuter told "Globes" today. "Of the various boycotts, diplomatic, academic, cultural, and economic, that may be imposed on Israel as a result of moves initiated by the Palestinian side after the declaration of the state of Palestine by the UN General Assembly in September, the economic boycott is the one that will most hurt the average Israeli," he added.

Reuter said that Financial Immunities had carried out research into the matter, and had concluded that the risk from an economic boycott to Israel's economic growth was low. Financial Immunities argues that a distinction should be drawn between economic sanctions imposed by countries, which have greater effectiveness but which are not on the horizon, and boycotts by consumer organizations and unions in different countries, which are not very effective.

"Specifically in this context one can highlight, for Israeli exporters, consumers in the UK and the Nordic countries as particularly problematic, and to a lesser degree Spain, Switzerland, and New Zealand. Israeli export industries with sensitivity to a boycott are mainly in products and services that foreign consumers and organizations can pick out as easy targets: tourism, packaged produce, personal care products, wines, and confectionery. The issue is not new. Many Israeli companies have worked all along in different countries where they have been subject to the adverse effects of anti-Israel and anti-Semitic sentiment, and have even lost deals as a result."

According to Financial Immunities, "because Israel's exports are driven by thousands of companies, in very diverse industries, companies that are widely deployed, with highly diversified export markets, and low international profiles, some of them being subsidiaries of foreign multinationals - the ability of organizations to pinpoint many Israeli targets and run an effective consumer boycott of them, is almost non-existent."

Nevertheless, the consulting firm suggests that exporters should take precautions and prepare. The firm recommends managing the risk by applying one or more of the following solutions: playing down the Israeliness of the product or service; focusing future development of products and services in niche areas and OEMs; in certain industries, trying to form partnerships with or branding by foreign multinationals; and focusing export efforts in Southeast Asian markets, where countries are more indifferent to boycotts.

In any case, Financial Immunities says that an economic boycott should be considered an act of war: "Israel's policy makers should make clear to the world that the Palestinians will mainly harm themselves if they lead economic boycott moves. Israel has tremendous ability to hurt the Palestinian Authority economically, and is likely to use this weapon."

Published by Globes [online], Israel business news - www.globes-online.com - on June 14, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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