Prime Minister Benjamin Netanyahu painted a bullish picture of the Israeli economy during the opening session of the Globes Business Conference in Jerusalem this morning.
"The cybersecurity industry, in which we are a leader - I said five years ago that we should be a leader, and we are there, in my opinion much higher than number five. We're in second place in markets after the US. Israel has 0.1% of the world's population, and we have 20% of the private cybersecurity market. This means that our share is 200 times the proportion of our population. This is enormous power. We are in a very exclusive club.
"Let's look at another industry. Do you remember that we once didn't have a car industry? There are over 500 startups now, because there is something new now - a car is becoming a computer with wheels, and now we can compete, like we do in cybersecurity, and we are competing. We're getting billions in investments; Waze was sold for the ridiculous price of $1 billion. Amnon Shashua made a slightly better deal ($15 billion sale to Intel) for Mobileye. What is important is that Intel has a campus here, and Google gave them its international autonomous vehicle business. This is very important, and this is the second industry.
"The third industry we are developing now is in my opinion potentially bigger than cars and cybersecurity. It is not there yet, but we have a very large database. We will take 100,000 saliva samples to make a 3D database like nothing that the world has ever seen before. We want to use it for personalized medicine and preventative medicine. Anything like this can make an enormous difference.
"There is no end to it. Many industries can grow and eventually get a high rank. The reason why we don't have the highest ranking is that we live in a very difficult environment.
On social gaps, Netanyahu said, "It is said that the economy is good for rich people - that the rich are getting richer and the poor are getting poorer. Not a day goes by without my hearing that. There is only one problem - it isn't true. Israel is almost the only country in the West where that isn't true, and here's why. This is the Gini Index of inequality. The index went up a few years ago, because we took the child allowances, but after the haredim got used to it, the index went down. Israel is the only country in the world in which it always goes down. The most significant increase in income was in the second quintile from the bottom, and after that the bottom quintile. The smallest increase was in the top decile. The rich are getting richer, but relatively less than the bottom quintiles.
"Some say, 'That's all very well, but what about purchasing power? What does it matter that there is less inequality and no unemployment?'
"The price of electricity in Israel is substantially lower than in European countries"
"Let's see what happened to the price of electricity. The price of electricity went up, and has fallen 15% since 2013. Even if goes up further, it will still be lower than it was in 2014. Who was minister of finance then?
"The price of electricity in Israel is substantially lower than in European countries. I tell you that the price of electricity will not go up 8%. If we have our own gas and develop Leviathan, it will significantly lower the price of electricity.
"What happened to food prices? Here are the food prices, the average wage, and the minimum wage. The reason for what is happening in France does not apply here, because people know the truth - Israel is an enormous economic success story, but no miracles are involved. It is the implementation of a free economy with government investments in places that I will not list here, but it gives us enormous power. You can't develop startups here with a 66% marginal tax rate, which is what the rate was when I became minister of finance in 2003. Who will come here with a tax rate like that? Who will stay? We almost strangled cyber with regulation. Today, we have a combination of a strong economy and strong technology, which enables us to fulfill our military needs."
Published by Globes, Israel business news - en.globes.co.il - on December 19, 2018
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