The Future of Israel - Israel Ministry of Foreign Affairs

ISRAEL AT 60The Future of Israel:The Next 60 YearsHow to Keep Israel’s EconomicJuggernaut at Full ThrottleWritten by Hanan Sherthe future of israelA measure of how much things have changed. In thepast, Israelis described their economy’s dependency on theUnited States by saying that when Wall Street sneezed,the Tel Aviv Stock Exchange on Ahad Ha’am Street gota temperature. Today the fever on American financialmarkets due to the sub-prime crisis has triggered no morethan a case of the sniffles for Israel’s economy.The most remarkable measure of Israel’s economy as thecountry enters its 61st year is its strength and stability. Thereal and anticipated slow-down in the United States, theprincipal market for the high-tech products that make upabout half of Israel’s exports, has caused some downwardrevision of growth estimates for 2008 and perhaps beyond.But by and large, there’s confidence that the Israeli economicjuggernaut, marked by low inflation, a positive trade balanceand a stable currency, will keep on rolling ahead.Part of that confidence is based on performance. In2007, with the clouds of crisis already gathering aroundthe world and continuing violence on its southern borderwith Hamas-controlled Gaza, Israel’s Gross DomesticProduct rose by a remarkable 5.3 percent. Perhaps evenmore impressive is that in 2006, a year in which the SecondLebanon War caused a third of the country to virtuallyshut down for more than a month and triggered a majordrop in tourism, GDP growth was 5.1 percent, 1.7 timesthat of the world’s 30 most developed nation. And in thefive years since the end of the second intifada, Israel’seconomy has grown by an average of 5 percent a year.This resilience augurs well for the future, posits LeoLeiderman, a former senior official at the Bank of Israel andnow chief economist for Bank Hapoalim, Israel’s largestbank. “What we have learned over the years,” he says, “isthat as long as we don’t go back to the kind of conditionsof the 2001-03 second intifada, with suicide bombings andthe loss of consumer confidence, and to the concurrentmajor slowdown in the global technology sector, thingscan be all right [in the economy] even though we may havesome level of hostilities” and political unrest.Given the right conditions, Leiderman argues that Israel’spotential is much greater. “Five percent is very nice,” hesays, adding that a changein the political environment -- “amore tranquil situation with our neighbors and a sort ofnormalized relations,” involving at least “the sense of thebeginning of direct talks between the different parties” tothe Arab-Israeli crisis – would allow Israel its real growthpotential of around 7 percent per year.Economic experts call keeping Israel in the economic fastlane a matter of national security, not just economics. Laborbelow: The ItalianHospital in Jerusalem,now the Israeli Ministryof Education, is thebranch of governmentcharged with overseeingpublic educationinstitutions in Israel. Theyare working on improvingthe educational systemto ensure Israeli’scompetitive edge for thenext 60 years.© ISRAEL MINISTRY OF TOURISM134

From Modest Beginnings to a Vibrant StateKnesset member Avishay Braverman, a top economist at theWorld Bank in the 1980s, sees it as essential for fulfillingfounding father David Ben-Gurion’s vision of Israel asa society based on three pillars: excellence, justice andsustainability. He says that Ben-Gurion, who died morethan 30 years ago, would not accept a second-rate economy.“We have the best people, young and older, in the world, andour GDP should be $35,000 per capita as in the prosperousEuropean countries, not the current $25,000.”AMOS BEN GERSHO, © GPO-ISRAEL NATIONAL PHOTO COLLECTIONBraverman, who was president of Ben-Gurion University inBeersheba before entering politics in 2006, sees improvingeducation at all levels as an economic priority, and not onlya social one – particularly since much of the science onwhich Israel’s high-tech rests is based on academic researchdating back a decade and more. He points to the difficultythat Israeli universities, largely supported by governmentmoney, have in attracting talented young Israeli PhDs tocome back for teaching and research. “Israel used to haveone of the highest levels of investment in education,” notesBraverman. “But in the last decade, we have been verynegligent, by not budgeting enough for higher education.... Today half of the senior professors at our universitiesare 55 and older. If we don’t do something to change that,and improve the rest of the educational system as well, wewill be wasting human capital.”“The years ahead will be extremely challenging, becauseglobal competition is going to grow. Look at what the Asiancountries like India and China are spending on universitiesand in support of basic research. American universities arefull of doctoral students from all over Asia. It’s quite scaryin the sense of future competition,” observes Leiderman.Preservation of the Israeli edge in the most advancedsciences is essential.“Strategically speaking, Israel’s place is in the sophisticatedsegment of high-tech, based on R&D. This is our hope,”Leiderman says, adding that Asian countries, with lowerlabor costs, have an obvious advantage in “medium-level”high-tech involving manufacturing and assembly.Maintaining that advantage requires high levels ofinvestment in R&D, by both the government and privatecompanies. Israeli industry “does not live off of low-wageproducts,” notes Shraga Brosh, head of the ManufacturersAssociation. “We are an economy that works on innovationand technology. If we continue to invest in R&D, thefuture will be clear and positive.”Though high-tech accounts for about 50 percent of Israel’sexports and is the main engine of growth, it provides only asmall percentage of jobs. “We have to change the structureof Israeli industry to accommodate the 90 percent of thoseemployed who will not and cannot be in high-tech,” saysBraverman, who like others see places for them in theservices, tourism and construction industries, as well as inindustries that are nominally low-tech in the products theyturn out but may use sophisticated technologies to makethem. One example he gives is father and son Stef and EitanWertheimer’s building of Iscar. “They took simple machinetools, blades for cutting, which is essentially a relativelyunsophisticated business, and transformed it from low-techto motek, which means sweet in Hebrew. The Wertheimersprove that Israel doesn’t have to specialize only in exotictechnologies, like imaging and communications.”above: The clothingstalls in Tel Aviv’s CarmelMarket. Increasedeconomic activity willcreate a prosperity thatthe entire economy willbenefit from.Left: Acting PrimeMinister Ehud Olmert(right) receives the 2005Israel Bank report fromBank of Israel GovernorProffesor Stanley Fischer(left), at the Industry andTrade Ministryin Jerusalem.WEBRESOURCEs:Ministry ofFinance:www.mof.gov.ilBank of Israel:www.bankisrael.gov.ilBank HaPoalim:www.bankhapoalim.comManufacturersAssociation ofIsrael:www.industry.org.il/EngTel Aviv StockExchange:www.tase.co.il➤the next 60 years135

ISRAEL AT 60the future of israelThe Wertheimers sold 80 percent of Iscar to U.S. investorWarren Buffett; the $4 billion they received made 2006,the year of the sale, the best-ever for foreign investmentin Israel. Though 2007 foreign investment, at just over$10 billion, represented a 29 percent decline from 2006’s$13.5 billion, it was still almost double the previous recordof $5.6 billion, set in 2005.The faith of Buffett’s Berkshire Hathaway firm in an Israelicompany – particularly one located well within Katyusharocket range of the Lebanese border – was a ratificationof the confidence other foreign companies have had overthe years in setting up plants and R&D facilities in thecountry. To keep them coming, there must be incentives,says Brosh, the industrialist. “The world is a global village.Everyone compares the benefits of investing in one placewith another, why in Israel rather than Ireland, why inIreland rather than Italy, and so forth.”While Leiderman agrees that incentives may induceforeigners to build new facilities and companies, heis careful to make a distinction. “Many times, foreigninvestment has been no more than a change of ownership,”he says. “If a company like Iscar, for example, leaves thingsas is and does not increase its workforce after someone likeBuffett buys it, basically it has little effect on the economy,even though it is registered as a foreign investment.”Much of the success of the past five years – which inaddition to 5 percent average annual growth includesa reduction of the ratio of debt to GDP from over 100percent to last year’s 79 percent, a 2007 government deficitof only 0.02 percent of GDP, a drop in unemploymentfrom 11 to 7.3 percent, a $5 billion positive trade balanceand a 25 percent increase in tourism to 2.3 millionvisitors last year – has been attributed to a combinationof budgetary discipline (read budget-cutting) andconservative monetary policy that has held inflation incheck. In practice, that policy has focused on efforts tocontract the bureaucracy so as to free up assets for theproductive private sector, cuts in government servicesincluding health, education and welfare-style transferpayments to large families, the elderly, the handicappedand others, and tax cuts to the top income brackets in theexpectation that they will stimulate increased economicactivity that will create a prosperity that will affect lowerincome brackets, as well. “As the standard of living rises,the entire economy will be pulled higher,” says Brosh.“And when the average standard of living goes up, theperson who was earning less will earn more.”These policies have, at least in the short term, had anundesired side effect – an increase in poverty rates amongultra-Orthodox Jews and Arabs, two groups in whichworkforce participation is low.6543210Czech RepublicReal GDP Growth 20066.0 6.0 5.3 5.1 4.9 4.0 4.0 3.8 3.4 3.0 2.7 2.7 2.6 2.4 2.2 1.7 1.2TurkeyIrelandIsraelFinlandHungarySwedenSpainUnited StatesDenmarkUnited KingdomBraverman, who sees himself as a European-style socialdemocrat, suggests that this path is an illusion. “The idea,called trickle-down theory, is nice on paper,” Barvermansays. “But if you look at all the clinical work of economists,it has no empirical base, and the fault you see exposedwhen these polices are implemented is that the rich aregetting richer, the middle class is not benefitting and thepoor are not improving.”Bank of Israel Governor Stanley Fischer, who also serves aseconomic adviser to Prime Minister Olmert’s government,recognizes the urgency of cutting back on poverty inIsrael – though he notes that one of the reasons that therich-poor gap has widened in the last decade is becauseof a prosperity that has made the rich richer, rather thanthe poor becoming poorer. Instead of restoring welfarepayments – except in special cases, like the elderly andthose who cannot work for health reasons – he advocateslonger-term fixes, including improved education, enhancedinfrastructure and the elimination of bureaucratic hurdlesthat stifle initiative and make doing business exceedinglydifficult. “What the economy cannot afford,” he told TheJerusalem Post, “is to let the budget get out of control.We will pay a high price in terms of higher [international]JapanEuro areaGermanyFranceItalyPortugalsource: The IsraelEconomy At a Glance 2007.hanan sherHanan Sher recentlyretired after 40years as an Israelijournalist, for TheJerusalem Report (asSenior Editor/Business)and previously TheJerusalem Post. Hegrew up in Florida andimmigrated to Israeljust after the 1967 Six-Day War. Sher and hiswife Sara, who live inJerusalem, havethree children.136

From Modest Beginnings to a Vibrant Stateinterest rates and a loss of confidence in the economy andits management if we do that.”Perhaps surprisingly, both banker-economist Leidermanand industrialist Brosh speak with general approval ofBank of Israel Governor Fischer’s March intervention in themoney markets, when the central bank surprised everyoneby reversing a long-standing policy of non-interventionby stepping in to purchase dollars when the exchangerate threatened to fall below the psychological barrier ofNIS 3.40-$1. And in another move widely interpretedas an effort to stabilize the American currency’s priceon Israeli forex (foreign exchange) markets, the centralbank later announced that it would purchase $10 billionin greenbacks over the coming two years, ostensibly toincrease Israel’s foreign currency reserves.Since the shekel-dollar rates began declining about twoyears earlier, exporters had been complaining bitterlyabout being caught in a trap. On one hand, their dollardenominatedexports were earning them fewer shekels,while their local Israel expenses, including labor, remainedthe same. On the other, a seemingly logical attempt toraise prices to cover the currency-related increase inreal costs might push away customers. But Brosh, theexporters’ main spokesman, is all understanding. “Thedecline of the dollar over the past two years, by 28 percent,has created a major competitive problem in the world,” hesays. “We cannot ask anyone to do more than Fischer hasdone, he has done everything that we dreamed of.” At thesame time, he suggests that the government “do more inthe fiscal area to balance the low dollar exchange rate andexchange production and export.”In the end, though, it will be the market – and not thegovernment or the central bank – that determines the finalshekel-dollar ratio. “These days the exchange rate is marketdependent,” Leiderman says. “And if the world decidesthat Israel is a great place to invest, we will see the shekel at3.40 or 3.20-$1, and there will be nothing that the centralbank will be able to do over time to prevent that. In thatsense, a strong currency is the price of success.” ◆ISRAEL 15Becoming one of the World’s15 Leading NationsWritten by Gidi GrinsteinAt its 60th anniversary, Israel needs a new vision whichwill not only guide its priorities and inform its actionsbut will also be relevant to the lives of all Israelis. Thisis why the ISRAEL 15 Vision, which calls for Israel tobecome one of the 15 most developed nations within 15years, is so compelling. It requires improving the qualityof life of all citizens.WEBRESOURCEs:Frequently AskedQuestions on theFinancial Crisis andits Implications forIsrael:www.bankisrael.gov.ilbelow: One key tobecoming a top 15 leadingnation is to improvequality of life overall.Jerusalem’s Ben YehudaStreet pedestrain mall,known as Midrachov,is an enjoyable way forIsraelis to spend their dayand help stimulate theeconomy at the same time.© ISRAEL MINISTRY OF TOURISMCentral banks can intervene on money markets, saysLeiderman, himself a former Bank of Israel official,when they see disorderly behavior on foreign exchangemarkets. The March dollar purchases, he says, followed“an assessment that the forex market was behaving inwhat the professionals at the Bank of Israel thought wasa strange way, so the bank bought some of the dollarsthat flooded the market.” In the short term, he viewsthis as permissible “but everything we know about othercountries seems to indicate that attempts of central banksto force on the market a given trend in the exchangerate sooner or later may not work out and may result inspeculative losses, because some specs will take positionsagainst the central bank.”➤the next 60 years137

ISRAEL AT 60the future of israelQuality of life is a very elusive issue. Its definition changesby geography. The quality of life of a religious and spiritualperson is different from that of a secular business person.Notwithstanding, quality of life is also visible and tangible.For example, anyone can tell that the average quality of lifein countries like Canada or Australia is higher than inGreece or Spain. Furthermore, although income per capitais an important factor determining quality of life, otherpublic goods such as health, education, employment andsocial cohesion play a critical role as well.Israel’s growth of recent years can be intoxicating.However, we often tend to forget that the world economyhas experienced significant growth, as well, in recent years.Hence, impressive rates of growth notwithstanding, Israeldidn’t succeed in leapfrogging – i.e. in catching up withthe leading nations of the world.In contrast, during the first 20 years of the State, Israel’seconomy bounced upward. Israel doubled its well-beingrelative to the United States, starting with an averageincome of 30 percent of the U.S. average and reaching 60percent by the early ’70s. Since then, Israel has not beenable to bridge the gaps with the richer countries, whileother countries such as Ireland, Singapore and SouthKorea have made leaps ahead.The importance of closing the gaps with the richestnations stems from the mobility of people, technology andinvestment. These highly mobile resources “choose” whichcountry to go to. Consequently, nations compete for them.Success in this fierce battle is essential for the future of anycountry but is critical for the survival of Israel.Israel suffers from the largest gap between the level oftalent of its population and the quality of life that it offersits residents. Israel is currently ranked 28th in the worldin quality of life. Yet, our population is one of the mosteducated and technologically savvy in the world. Indeed,Israel is a leading exporter of talent with one of the highestlevels of brain drain among developed nations.Becoming one of the 15 leading nations – roughly at thelevel of Holland, Singapore or New Zealand – requiresleapfrogging our socioeconomic performance and growingat an annual pace of 7 to 8 percent for at least 10 years.This is a national challenge that will require widespreadmobilization of the key sectors of society.The phenomenon of leapfrogging is different than growth.While the world has established a recipe for stability andgrowth in the form of a set of accepted principles knownas the “Washington Consensus,” which primarily callsfor fiscal and monetary discipline and privatization, thereis no such recipe for leapfrogging. In other words, eachcountry charts its own path.However, the common denominator among the countriesthat have leaped ahead has been their agenda. They allestablished an ambitious vision, identified growth enginesand exhausted them, benchmarked their performance toother countries, improved the capacity of their governmentto make decisions and implement them, enhancedcollaboration among key sectors of society and investedin human capital.In addition, nations that leaped ahead contained theirunique challenge and tapped into their individualpotential. For example, Singapore understood that itwas located at a junction between East and West andtherefore developed the world’s leading airport, seaportand airline, while Ireland tapped the benefits of itsinclusion into the EU.We also know that leapfrog happens as a consequenceof a combination between top-down leadership by thegovernment and bottom-up mobilization of the key sectorsof society. Hence, on the one hand, reforming Israeligovernance is key since it is significantly underperformingcompared to our business sector. At the same time, we haveto find ways to harness mayors and local governments,businesspeople, philanthropists, nonprofits and worldJewry to the ISRAEL 15 Vision and create the space thatallows them to make a contribution as well.Finally, growth and development have to turn into a“national obsession.” We have had such passions inthe past: greening the desert, redeeming the land orimmigration absorption. The challenge for the ISRAEL15 Vision is to become a household phrase and aframework that inspires for action.The ISRAEL 15 Vision may be ambitious, but it isattainable. Already today Israel is a world leader in keyareas such as research and development, human capitaland technology. We have outperformed expectations inthe past. There is no reason we cannot do it again. ◆Gidi grinsteinGidi Grinstein isfounder and presidentof the Reut Institute.This article is basedon a speech given byGrinstein at the 2008Herzliya conference.above: The KofflerAccelerator at night.WEBRESOURCEs:Reut Institute:reut-institute.orgInstitute forPolicy andStrategy-HerzliyaConference:www.herzliyaconference.org/Eng138

From Modest Beginnings to a Vibrant StateFrom Curiosityto ExcellenceWritten by Proffesor Daniel Zajfman, President of theWeizmann Institute of Science© WEIZMANN INSTITUTE; KLUGER ZOLTAN, © GPO-ISRAEL NATIONAL PHOTO COLLECTIONExcellence is a concept that many espouse but few canreally define. When we meet up with excellence, werecognize it immediately, even as we struggle to pinpointthe quality that separates the excellent from the rest. Partof our difficulty is that excellence is revealed differentlyin different areas of human activity: An athlete who winsOlympic medals, an airline that provides outstandingservice and a scientist whose breakthrough discovery earnsa Nobel Prize – each is excellent in their own milieu. Butwhat do they have in common?Investigating the roots of this attribute we call “excellence,”we might discover that it’s really a way of life. The basictrait shared by all those who aspire to excellence is aninternal drive, a constant striving for perfection that is,in most cases, unattainable. In other words, excellence isa way of life that leaves those who choose it in a state ofperpetual dissatisfaction.The excellent sprinter competing in a 100-meter raceknows that a world record can be topped tomorrow. Themanagement of the excellent airline knows that its specialextras will soon become industry standards, forcing themto redouble their efforts to maintain their top position.The excellent scientist knows that every new discovery ortheory will shortly be replaced by even newer findings.My personal experience of excellence comes from theWeizmann Institute of Science and its contributionto the technological, economic and educational wellbeingof Israel, and so I will focus my remarks on thisarea. The Weizmann Institute of Science is a researchinstitute in which about 400 scientists, supported by astaff of some 2,200, conduct research in the exact andnatural sciences: mathematics, computer science, physics,chemistry, biochemistry and biology. The Institute, as anorganization, knows how to cultivate excellence: Two ofthe necessary ingredients are freedom and an open mind,and the Institute is adept at providing one and nurturingthe other. Along with providing the necessary scientificinfrastructure, it gives scientists the liberty to managetheir research independently, with no demands other thanthose of their own curiosity. In some sense, the excellenceof their research is directly linked to the extent to whichwe allow them the freedom to think outside the box.This freedom – usually referred to as “academic freedom”– stems from an understanding that the paths to scientificbreakthrough run through a setting in which scientistshave carte blanche to search for answers to the questionsthat gnaw at their minds. Experience teaches us thatengaging in a relentless attempt to satisfy their curiositycan bring scientists to the very frontiers of the known –thereby expanding the bounds of human knowledge. Thisis how they attain excellence.The Weizmann Institute strategy was developedover many years. It begins with the astute selectionof promising new scientists, a tactic that has led tooutstanding results throughout the Institute’s history.For example, in 1954, Institute scientists built thecountry’s first computer – in fact, one of the first inthe world. In those days,Israel was hard-pressedto feed its population, butthose scientists managedto gather together theresources needed tobuild the computer. Atthe Weizmann Institute,they gave us a computerrather than searching forimmediate solutions tothe woes of the day. TheInstitute scientists thenAbove: The Jubilee Plazaand Koffler Acceleratorof the Canada Centre ofNuclear Physics.bottom: Profesor ChaimWeizmann presentinga diploma during thegraduation ceremony.➤the next 60 years139

ISRAEL AT 60generates new knowledge– the hard currency ofexcellence.the future of israelused the new computer to calculate the position of theworld’s amphidromes – points in the ocean that neverexperience tides.The cost of constructing that computer, which theynamed WEIZAC, was huge, especially given themeager financial resources of the Institute at that time.But someone here understood that a computer used fortheoretical, “non-applicable” research (what immediatebenefits might result from knowing the exact tide-lesspoints in the oceans?) had the potential to change thefuture for all of us. The project ultimately led to theestablishment of the first academic department ofcomputer science in Israel, and this department becamethe basis of the country’s entire computing industry.How did this happen? How did theoretical research,with no practical application whatsoever, come to shapethe face of our society and our economy? It happenedbecause, in the pursuit of excellence, the subjectmatter – locating amphidromes for example – is notwhat counts. It’s the people that count. Behind thecomputer construction project were people with a thirstfor knowledge and a nagging dissatisfaction with thealready known. These qualities drove them to embarkon a highly complicated project (building a computer)and thus to take the first step in laying the foundationsfor an advanced, knowledge-based high-tech industry– today the pride of the whole country. The way toexcellence begins with human curiosity. When theyearning to reach beyond present understanding turnsthat curiosity into a real thirst for knowledge, it fuelsnew invention and discovery. Curiosity, therefore,How, then, can wesafeguard the impetusborn of our curiosity?Preserve the high level ofacademic research in Israel?Ensure that the WeizmannInstitute of Science and theother excellent universitiesin Israel will continue toprovide the high-qualityhuman resources neededto shape the country’s future? Israel’s current economicoutlook is increasingly based on knowledge (ideas) ratherthan on tangible products. In fact, trends show thatintellectual property (really great ideas) is rising in value,in comparison with natural resources (even oil). The key tosuccess is the Weizmann Institute formula: Give universitiesboth the means and the freedom to attain the intellectualbreakthroughs of the future. We must remember thatwhat appears today to be basic academic research can leadto the development of advanced industrial applications todrive tomorrow’s economy. The bottom line, then: It makeseconomic sense to invest in research and education. True,it’s expensive, but it carries almost no risk. If past experiencecan be our guide, it’s the best investment possible – one thatwill yield a future we can’t yet even imagine. And if a brightfuture is what we aspire to – well, we won’t be able to createit in any other way. ◆professordaniel zaifmanIn December, 2006,Proffesor DanielZajfman was electedto be the tenth (andyoungest) presidentof the WeizmannInstitute. In 1989 hereceived a Ph.D. inatomic physics fromthe Technion, in Haifa.He then completedpost-doctoral researchat the ArgonneNational Laboratorynear Chicago.WEBRESOURCEs:WeizmannInstitute ofScience:www.weizmann.ac.ilAbove left: Dr. VladimirY. Umansky works atThe Joseph H. and BelleR. Braun Center forSubmicron Research inthe Condensed MatterPhysics Department.Left: Professor YoramSalomon (left) worksin the department ofBiological Regulation andProfessor Avigdor Scherz,a frequent collaborator,works in the departmentof Plant Sciences.© WEIZMANN INSTITUTE140

From Modest Beginnings to a Vibrant StateThe Importance of ZionismIsrael and the Jewish People in the 21st CenturyWritten by Gil Troy© GPO-ISRAEL NATIONAL PHOTO COLLECTIONWhile celebrating the miracle of Israel as a thriving,sovereign state for 60 years, some believe it is time toproclaim the end of Zionism. Even many who are not hostileto Zionism believe it has run its course, having achievedits main objective by establishing a Jewish state. ShouldZionism be thanked and given a gold watch even before itsgreatest creation Israel reaches mandatory retirement age?In fact, Israel – and world Jewry – needs Zionism morethan ever. Zionism is the movement of Jewish nationalliberation. And in this challenging 21st century, the Jewsstill need liberating, be it in North America, Israel, or therest of the world.Zionism has two important dimensions. It defines whowe are and suggests what we need to do. As the movementof Jewish nationalism, Zionism emphasizes Judaism’suniqueness. Judaism is not just a religion; the Jews area people – a nation – enjoying a rich, historical past,overlapping multi-dimensional present-day ties, and acommon fate. They share a language, Hebrew, a worldview,Judaism, and a traditional homeland, Israel.Judaism, one of my teachers taught me, is an Oreo cookie.Just as Oreos need the cookie and the cream to be Oreos,Judaism is both a nation and a religion. Consider Israel– both Holy Land and sovereign state. Consider Pesach(Passover) – a religious moment of deliverance and acritical step in nation building. Consider the Bible itself– a book of theology and the story of our people.Appreciating Jewish civilization’s national aspects, thispeoplehood thing, explains many mysteries about beingJewish. It explains how even non-believers can be deeplyinvolved in Jewish affairs. It explains how Jews who have neverbeen in Israel, can feel assaulted when a bomb rips througha pizzeria in Jerusalem or a cafe in Tel Aviv. It explains howIsraelis – helped by world Jewry -- can take responsibility forresettling 850,000 Jews expelled from Arab lands, a millionRussian Jews and tens of thousands of Ethiopians. And itexplains all the cultural, national, non-religious pieces of ourown particular Jewish puzzles we each fill in daily.Zionism teaches that thisnational identity cannot bestatic or passive. We shouldnot just be Jewish, weshould do Jewish. And weshould not just do Jewish toentertain ourselves, or findspiritual meaning alone,but to help each other asJews and as human beings.Zionism, at its best, likeall great nationalisms, isa movement of nationalself-protection that canmobilize masses to makethe world a better place,what we Jews call tikunolam. So Zionism is about individuals finding greatermeaning by identifying with historical and forward-lookingforces greater than themselves through collective efforts asJews. Zionism is about fighting anti-Semitism and helpingto resettle refugees from Darfur, in Israel and elsewhere.Zionism is about improving Israel’s quality of life andexporting life-saving technology around the world. Zionismis about critiquing the world as it is, dreaming about how itshould be and doing our best together to fix it.These visions should animate a Jewish national agenda forthe next 60 years, focusing on Crisis Zionism, IdentityZionism and Israeli Zionism as a special case.CRISIS ZIONISM:We cannot forget the initial Zionist impulse -- towardself-defense. And if we did, our enemies would remindus. Just as the continuing Arab onslaught against Israeldemands vigilance that often raises Zionist consciousness,the renewed epidemic of anti-Semitism returns Zionismto its roots and reaffirms the importance of having a Jewishstate in this occasionally hostile world. The state of Israel ismodern Jewry’s most powerful ally against anti-Semitism,with sovereign leaders who can lobby other state leadersto control outbursts in problematic countries, with aabove: Theodor Herzlon the balcony of thethree kings hotel in Baselin 1898 during the firstZionist Congress.WEBRESOURCEs:World ZionistOrganization forYoung Adults:www.hagshama.org.ilJewish Agency-Zionist Education:www.jewishagency.orgHadassah-Women’s ZionistOrganization:www.hadassah.orgBirthright Israel:www.birthrightisrael.com➤the next 60 years141

ISRAEL AT 60legendary army whose deterrent effect is important andwith the ability, if necessary, to rescue and absorb any newJewish refugees. The once stateless, friendless Jews havetheir own state, their own champion – and have greatlybenefited from the association.IDENTITY ZIONISM:Zionism is more than responding to crises and rescuingJews; it is also about dreaming, about creating a New Jewshaping an exciting Jewish future. This identity Zionismmay be most useful where it is least welcomed – in NorthAmerica today. Despite the surveys showing a growingdistance between American Jews and Israel, despite thestudies claiming America has become “post-ethnic,” thenotion of Jewish peoplehood remains the essential gluekeeping the American Jewish community together andlinking American Jews to their heritage. With barely 13percent of the American Jewish community defining itselfas religious, the Zionist emphasis on peoplehood explainswhy American Jews remain Jewish. In fact, throughout theWest, Identity Zionism can unite religiously motivatedJews with more culturally or nationally motivated Jews.The central challenges facing most people in modernconsumerist democratic societies – and especially Jews –have more to do with identity than survival. Living amidWestern freedoms, riches and technological miracles, mostof us seek anchors, guideposts, ways to make sense of life.Zionism can provide the ideological framework, communalvision and enduring values we desperately need. So manyJews from across the religious spectrum share that sense ofidentification, of pride in fellow Jews, of instant intimacywith fellow Jews, of specialfamiliarity regardingJewish traits. Zionismmakes our tribalismtranscendent, shaping oursense of connection into acommunal quest filled withenduring values, orientedtoward constructive andcommon dreams.In building this nationalidentity, Israel, as theslogan says, “Is real;” itfleshes out this peoplehoodthing. In good times, and bad, Israel raises Jewishconsciousness, and provides a stage with a rich Jewishsetting for writing and updating the ongoing Jewish script.Studies show that modern acculturated Jews respond to24/7 Jewish experiences. Israel is the ultimate 24/7 Jewishexperience, following Jewish time, living in a Jewish space,implementing Jewish values, improvising a modern Jewishlife. In particular in the United States, as Jews grow furtheraway from the immigrant experiences and the “old country,”Israel has an important role to play as both the “old” and“new” country. Israeli foods, songs, stories, images, customs,accents can restock the American Jewish imagination asmemories of Eastern European Jewish life dim. Israelcan become an important source of new experiences andan important laboratory for generating new Jewish ideas,perfecting new Jewish forms, tapping new Jewish energiesand pioneering new Jewish solutions to the real problemsof running a state.Above: The Mt. Scopuscampus at the HebrewUniversity of Jerusalem.Hebrew study is the keyto stronger Zionism andJudaism in Israel.left: Father and sonpray and reflect atthe Western Wall inJerusalem. Zionismteaches one to findgreater meaning throughhistorical and forwardlookingforces that aregreater than themselves.the future of israelTwo simple solutions could trigger the kind of Zionistrevival needed to revitalize modern Diaspora Jewry. Forstarters, we need more Hebrew study. Hebrew is the keyto unlocking prayer, the gateway to Jewish religious life,and Israel is the gateway to a rich, real, Jewish national life.Rather than retreating from Hebrew study, Jewish parentsshould embrace the multilingual trends of this globalizedworld and make sure their children achieve Hebrew fluency.Second, we must build on the great success of birthrightIsrael and remember the formula 2DW=1il. For mostNorth American Jews, two trips to Disney World roughlyequal the cost of one Israel trip. The more Diaspora Jewsvisit Israel, the more time Jews spend in Israel, the strongerboth Zionism and Judaism will be.gil troyGil Troy is Professorof History at McGillUniversity in Montrealand a Visiting Scholaraffiliated with theBipartisan PolicyCenter in Washington.Troy is also the authorof Why I Am a Zionist:Israel, Jewish Identityand the Challengesof Today.© ISRAEL MINISTRY OF TOURISM142

From Modest Beginnings to a Vibrant State© ISRAEL MINISTRY OF TOURISMISRAELI ZIONISMAs Israel reaches middle-age, a renewed Identity Zionismcould help solve the country’s mid-life crisis. As Israeli Jewsbecome Americanized, they suffer more and more fromthe excessive materialism, alienation, individuation, apathyand loneliness that afflict so many moderns in advanced,consumerist society. Already, many Israelis complain ofa values crisis, lamenting too much corruption, greedand selfishness, at all levels of society. The Zionism ofthe kibbutz and the Jaffa orange may be more suited tomuseums; these days, it is hard to jump up and down,doing the circle dances of yesteryear, without sending yourcell phones, iPods, Blackberries and car keys flying. Butthe us of Zionism can counterbalance the I of modernityin Tel Aviv, as well as in New York. Zionist dreams canneutralize post-modern cynicism; Zionist social activismcan help cure the computer age’s couch-potato passivity.Having helped make so much of the desert green,Zionism has to help stop the modern Israeli from feelingso blue. Instead of draining swamps, there is pollutedair to clean and far too much litter to pick up. Insteadof broken refugees to resettle, there are the poor tofeed, the uneducated to teach, those broken by moderndysfunctions to heal. Instead of jumpstarting a culture, asociety, an economy and a political system, there are thesystems of a modern country waiting for their 60-yearcheck-up and, in some cases, a serious overhaul. Zionismwas never just about getting to Israel or surviving; it wasabout perfecting this new country and thriving. For all ofIsrael’s tremendous accomplishments these last 60 years– many thanks to Zionism – a renewed Zionism will tapa forward-thinking, altruistic, idealistic, creative sense ofcommunity for the next 600 years.True, so many of these lovely sentiments would be muchmore compelling, and easier to address, without theconstant security challenges Israel has been forced to face.But we cannot let the continuing threats against Israel robZionism of its idealism – and its transformative potential.Abandoning Zionist dreams amid sobering realities – orlimiting Zionist activism to Jewish self-defense – givesour enemies a victory they do not deserve. A centuryago, Theodor Herzl, the modern founder of this old-newmovement taught us: “Im Tirzu, ayn zo agaddah.” (If youwill it, it is no dream.) Today, we still need to dream – andstill need to show just how often we can transform thedreams of today into the triumphs of tomorrow. ◆Above: American-Jewsvisit a camel ranch inEilat. It is important tobuild on the great successof birthright Israel andhave Jews from all overthe world visit Israel.WEBRESOURCEs:The Jewish PeoplePolicy PlanningInstitute:www.jpppi.org.ilIsraeli PresidentialConference 2009:http://presidentconf.themarker.comConferenceof Presidentsof MayorAmerican JewishOrganizations:www.conferenceofpresidents.orgUnited JewishCommunities- TheFederation ofNorth America:www.ujc.orgRelations BetweenIsraeli and AmericanJewry: A RealisticVisionWritten by Professor Yehezkel Dror, Founding President ofThe Jewish People Planning InstituteRelations between American Jewry and Israel duringthe first 60 years of Israel’s existence have by and largedeveloped into a great success, to the benefit of all.However, achievements in the past do not automaticallyguarantee future success in a rapidly changing world,where clinging to what has worked in the past oftenassures failure in the future.This applies, first of all, to U.S.-Israeli relations as a whole.While excellent cooperation between American Jewryand Israel facilitates these relations, this relationship inturn depends on them. American Jews are committedU.S. citizens. Thus, they support U.S. policies that intheir view benefit both America and Israel. Therefore,Israel – in cooperation with American Jewry-- has towork hard at maintaining and strengthening its specialrelationship with the United States, as it is essential forits relations with American Jewry, in addition to othercritical considerations.Moving to intra-Jewish considerations in the United States,generational changes are increasingly raising difficultissues. The new generation shares less and less the deep➤the next 60 years143

ISRAEL AT 60emotional experiences of the Shoah, the establishmentof Israel and its struggle for survival, which for themis “history” rather than a formative experience. Also,the scope of shared campaigns such as “Let My PeopleGo” from the Soviet Union, has become more limited.And post-modern values attractive to many young Jews,compounded with a lack of understanding of MiddleEastern realities, can undermine support for Israel as aJewish State, as well as its policies.In Israel, the younger non-Orthodox generation regardsitself increasingly as “Israeli” first and only secondarily asJews. Many Israelis know all too little about AmericanJewry. And many Israeli policies, such as assigningsecondary status to main American Jewish religiousstreams, harm relations. Also, some Israeli realitiestarnish Israel’s image as a just and high-quality country,imperiling its standing among American Jews, especiallyin the younger generation.If the quite radical differences between the subjectiveexperiences and the objective realities of being a Jew ina Jewish State and being a Jew in the United States areadded to the outlook, the unavoidable conclusion is thatunless Israeli-U.S. Jewry relations are restructured on somenovel foundations, their future may be bleak. However, athriving future is possible as illustrated by the followingrealistic vision for the next 60 years:• Israel recognizes the legitimacy of Jews living in theDiaspora and accepts them, and especially AmericanJewry, as full partners sharing responsibility for the futureof the Jewish People as a whole.pressing predicaments, such as large scale assimilation.• American Jews better understand the realities facingIsrael in the Middle East, with special attention to theyounger generation so it is not carried away by anti-Israeli“new age” ideas.• American Jewry increases its moral, political and materialsupport for Israel, understanding that Israel cannot shoulderalone the continuous burdens and challenges of building(and defending) a Jewish State in the Middle East.• U.S. Jewry and Israel cooperate in developing newpatterns of “multiple residence,” as fitting globalization andpartly in place of diminishing full Aliya, with an increasingnumber of Jews dividing their time between the U.S. andIsrael, while respecting their citizen duties.• U.S. Jewry and Israel engage in joint projects, such asdesigning core curricula on Judaism and the Jewish Peopleto be shared by Jewish schools in both countries; cultivationand development of Jewish People leadership and a varietyof “Tikkun Olam--Mend the World” projects.Such a flourishing future relationship between Israeland American Jewry, within the special United States-Israel relationship, is definitely possible, and if it comes tofruition, will be of much benefit to all. But it is not assured.It does not stretch the imagination too much to constructa plausible nightmare scenario in which deterioratingIsrael-American Jewry relations have dire consequencesfor both communities within a context of serious tensionsarising between the United States and Israel.professoryehezkel drorProfessor of PoliticalScience at theHebrew Universityof Jerusalem, amember of the Clubof Rome, scholarand internationaladvisor on statecraft,governance, andpolicy planning. Heserved as a senior staffmember of the RANDCorporation in theUSA; Senior Advisorin the Offices of IsraeliPrime Ministers andMinisters of Defense.the future of israel• U.S. Jewish organizations and leaders are regularlyconsulted on major Israeli decisions that impact Jewry and theJewish People as a whole, such as the future of Jerusalem.• Israel does not “require” automatic support for all itsactions as a duty of American Jewry and is instead wideopen to frank discourse.• Israel changes domestic policies which are anathema tolarge parts of American Jewry, such as non-recognition ofmain religious streams.• Israeli public and leadership understand in-depth the maindynamics of American Jewry and tries to help in coping withTherefore, the 60 year anniversary of Israel is not only atime for celebrating the heroic achievements of the past,but also for working hard to assure continuing progress,prosperity and good will in the future – with the realisticand revitalized vision of Israel-American Jewry relationsserving as one of the policy compasses for doing so. ◆Below: The U.S. andIsrael on the worldmap. Both countries areworking hard towards aprosperous future.144

From Modest Beginnings to a Vibrant State© ISRAEL MINISTRY OF TOURISMWhat Israel Meansto meFinal ReflectionsWritten by David A. HarrisI’m sure I am not alone in admitting that I still getgoose bumps when I hear Israel’s national anthem,Ha’tikvah (The Hope).The establishment of the state in 1948, the fulfillment ofits envisioned role as home and haven for Jews from aroundthe world, its wholehearted embrace of democracy andthe rule of law and its impressive scientific, cultural, andeconomic achievements are accomplishments beyond mywildest imagination.For centuries, Jews around the world prayed for a return toZion. We are the lucky ones who have seen those prayersanswered. I am ever so grateful to witness this mostextraordinary period in Jewish history and sovereignty.No other country has been subjected to such a constantchallenge to its very right to exist, even though the ageoldbiblical, spiritual and physical connection betweenthe Jewish people and the Land of Israel is unique inthe annals of history.No other country has faced such overwhelming oddsagainst its very survival or experienced the same degree ofnever-ending international vilification by too many nationswho slavishly follow the will of the energy-rich and morenumerous Arab states, and, in doing so, throw integrityand morality to the wind.Yet, throughout, Israelis have never succumbed to afortress mentality, never abandoned their deep yearningfor peace with their neighbors or willingness to takeunprecedented risks to achieve that peace, never lost theirzest for life and never flinched from their determinationto build a vibrant, democratic state.That the blue-and-white flag of an independent Israelcould be planted on this land, to which the Jewish peoplehad been intimately linked since the time of Abraham,just three years after the Second World War’s end –and with the support of a decisive majority of U.N.members at the time – truly boggles the mind.And what’s more, that this tiny community of Jews, includingsurvivors of the Holocaust who had somehow made their wayto Palestine despite the British blockade, could successfullydefend themselves against the onslaught of five Arab standingarmies that launched their attack on Israel’s very first day ofexistence is almost beyond imagination.I witnessed firsthand what Israeli embassies and consulatesmeant to Jews drawn by the pull of Zion or the push ofhatred. I stood in the courtyard of the Israeli embassyin Moscow and saw thousands of Jews seeking a quickexit from a Soviet Union in the throes of cataclysmicchange, fearful that the change might be in the directionof renewed chauvinism and anti-Semitism.Awestruck, I watched as Israel never faltered, not even for amoment, in transporting Soviet Jews to the Jewish homeland,even as scud missiles launched from Iraq traumatized thenation in 1991. It says a lot about the conditions they wereleaving behind that these Jews continued to board planes forTel Aviv while missiles were exploding in Israeli populationcenters. In fact, on two occasions, I sat in sealed rooms withSoviet Jewish families who had just arrived in Israel duringthese missile attacks. Not once did any ofthem question their decision to establishnew lives in the Jewish state. And equally,it says a lot about Israel that, amid all thepressing security concerns, it managed,without missing a beat, to continue towelcome these new immigrants.In the mid-1980s, I saw firsthand Israeldo what no Western, much less Arab,country had ever done before—bring outblack Africans, in this case EthiopianJews, not in chains for exploitation, butin dignity for freedom. These EthiopianJews, numbering tens of thousands, hadlived as Jews since the time of Solomonand Sheba and had yearned for a returnto Zion ever since. In our lifetimes, theirdreams came true, though the perilousjourney out of Ethiopia cost the lives ofthousands who fell victim to bandits,unforgiving terrain and hunger.above: Israel has manygreat cities with stateof-the-artarchitecturesuch as the GovernmentBuilding in downtownHaifa.below: The Israeliflag is hung proudly atthe Western Wall inJerusalem.➤the next 60 years145

ISRAEL AT 60the future of israelAnd how can I ever forget the surge of pride, Jewish pride,that completely enveloped me in July 1976 on hearingthe astonishing news of Israel’s daring rescue of the 106Jewish hostages held by Arab and German terrorists inEntebbe, Uganda, over 2,000 miles from Israel’s border?The unmistakable message: Jews in danger will neveragain be alone, without hope and totally dependent onothers for their safety.It gives me great pride that the American Jewish Committeewas the first American Jewish organization to open a fulltimeoffice in Jerusalem, in 1961. Our Project Interchangeprogram, started in 1982, has sent thousands of political,civic, ethnic and religious leaders from around the worldon educational seminars in Israel, providing them with afirsthand look at the country.There is the tricky and underappreciated issue of thepotential clash between the messy realities of statehoodand the ideals and faith of a people. It is one thing for apeople to live their religion as a minority; it is quite anotherto exercise sovereignty as the majority population whileremaining true to one’s ethical standards. Inevitably,tension will arise between a people’s spiritual or moralself-definition and the exigencies of statecraft, between ourhighest concepts of human nature and the daily realities ofindividuals in decision-making positions wielding powerand balancing a variety of competing interests.In just 60 years, Israel has built a thriving democracy,unique in the region, including a Supreme Court prepared,when it deems appropriate, to overrule the prime ministeror the military establishment; a feisty parliament thatincludes every imaginable viewpoint along the politicalspectrum; a robust civil society and a vigorous press.It has built an economy whose per capita GNP exceeds thecombined total of its four contiguous sovereign neighbors– Egypt, Jordan, Lebanon and Syria.It has built universities and research centers that havecontributed to advancing the world’s frontiers of knowledgein countless ways, including several Nobel Prize winners.It has built one of the world’s most powerful militaries –always under civilian control, I might add – to ensure itssurvival in a rough-and-tumble neighborhood. It has shownthe world how a tiny nation can, by sheer ingenuity, will,courage and commitment, defend itself against those whowould destroy it through conventional armies or armies ofsuicide bombers. And it has done all this while striving toadhere to a strict code of military conduct that has few rivalsin the democratic world, much less elsewhere – in the faceof an enemy prepared to send children to the front lines andseek cover in mosques, schools and hospitals.It has built a quality of life that ranks it among theworld’s healthiest nations and with an exceptionally highlife expectancy.It has built a thriving culture, whose musicians, writers andartists are admired far beyond Israel’s borders. In doing so, ithas lovingly taken an ancient language, Hebrew, the languageof the prophets, and modernized it to accommodate thevocabulary of the contemporary world.It has built a climate of respect for other faith groups,including Baha’i, Christianity and Islam, and theirplaces of worship. Can any other nation in the areamake the same claim?It has built an agricultural sector that has had much toteach developing nations about turning an arid soil intofields of fruits, vegetables, cotton and flowers.Step back from the twists and turns of the daily informationoverload coming from the Middle East and consider thesweep of the last 60 years. Look at the light-years traveledsince the darkness of the Holocaust and marvel at themiracle of a decimated people returning to a tiny sliver ofland and successfully building a modern, vibrant state –against all the odds – on that ancient foundation.In the final analysis, then,the story of Israel is thewondrous realization of a3,500-year link among aland, a faith, a language,a people and a vision. Itis an unparalleled story oftenacity and determination,of courage and renewal.And it is ultimately ametaphor for the triumphof enduring hope over thetemptation of despair. ◆david a. harrisDavid A. Harris isExecutive Directorof the AmericanJewish Committee.WEBRESOURCEs:American JewishCommittee:www.ajc.orgAbove: The PoliceOrchestra performs atthe Ben Yehuda Streetpedestrian mall inJerusalem.below: The AshdodInternationalFilm Festival.© ISRAEL MINISTRY OF TOURISM146

Boston Hannah International sends itscongratulations to the state of Israel on theoccasion of its 60th anniversary2008Official magazine of theAmerican Heart Association’sMidwest AffiliateISRAEL AT SIXTYFrom Modest Beginnings to a Vibrant State1948–2008HEALTHY LIVING WITH HEART DISEASE THE LATEST NEWS ABOUT HEART DISEASEAND STROKE RECIPES FOR A HEALTHY HEART STROKE AND ETHNICITY:WHO IS MOST AT RISK? ADOPT A HEALTHY LIFESTYLE LOBBY DAY 2008OFFICIAL COMMEMORATIVE PUBLICATION • ISRAEL MINISTRY OF FOREIGN AFFAIRSBoston Hannah International is a specialist custom publisher, producinga range of consumer, business and anniversary publications and websitesworldwide from offices in USA and EuropeCall in confidence to discuss what we can do for youIf your organization would like to explore the benefi ts and opportunities for a publication of your own,please contact Doug Haddad at 312.701.0000www.bostonhannah.com