Dear Rotarians,
I was asked by Mr. Edgardo Tumangan, President of the Rotary Club of Manila and Mr. Renato Ampil, Chairman of the Program Committee, to address this distinguished audience, the Rotarians of Manila, the most important Rotary Club in the Philippines and the first in Asia, and I am doing it with great pleasure.
Israel-Philippine relations date back 45 years ago. The Republic of the Philippines was the only country in Asia and one of the very few in the world that on 29 November 1947 voted at the U.N. in favour of the creation of the State of Israel in the land of Israel side by side with a Palestinian State known as the U.N. vote on the Partition Plan. The resolution was adopted with 33 countries voting in favour. Unfortunately, the Arab world rejected the call for the creation of the State of Israel and a Palestinian State culminating in the tragic political situation in the Middle East envisioned until today.
Our friendly ties with the Philippines date even earlier than the 1947 vote at the U.N. to the decision taken by President Manuel Quezon to allow the entry into the Philippines of ten thousand Jews escaping from Nazi Germany. Those Jews were and some are still the core of the Jewish Community of Manila, which some of you might have had business relationships with at a time. The people of Israel will always treasure these gestures of the Filipino people.
Diplomatic relations with the Philippines were established in 1957 and since then both countries enjoy partnerships in political, economic, agricultural, cultural and academic areas. The large Filipino community in Israel, over 35 thousand, are the best ambassadors of the Philippines to Israel. For us the thousands of Filipinos who were trained over the years in Israel under the Israeli Technical Assistance Program are the best ambassadors we could expect in the Philippines.
Since the outset of our diplomatic relations, the Government of Israel has extended programs of technical cooperation to the Philippines. Filipinos from government agencies as well as from NGOs participate in various training courses ranging from agriculture to health, to education, to rural development, and many more trainings are conducted on site, in the Philippines.
The Government of Israel also maintains, in collaboration with the Department of Agriculture and the Department of Agrarian Reform and with various provincial governments, numerous demo units in which Israeli agricultural technologies of irrigation and production are demonstrated. These units are in Los Ba�� Laguna, in Central Luzon State University in Nueva Ecija, in Cebu, in Bohol, in Mindanao and in many other provinces.
Israel is a very small country, one-tenth the size of the Philippines, with half of the population of Metro Manila. It is a young country, an immigrants? society, which in the last decade has absorbed over a million people mainly from the ex-Soviet Union, which translates into an increase of 20% of Israel?s total population. The absorption of these very talented and professional immigrants from the best Universities in Russia coupled with the developments in the Peace Process, opening the gates to investments of the biggest multinational companies and foreign banks, was the major boost to Israel?s economic success in the last 10-15 years.
The economic structure has changed from being mainly a high-tariff barrier market to almost no barriers at all. Imports from all over the world have been eased to zero duties opening our market to importation of cheap products mainly from Asia. Union has also been beneficial for the creation of a stable market for Israeli High-tech products and for Israeli participation in the R & D programs of the European Union.
In addition, privatization of major government, corporations has created a completely new environment of economic stability and prosperity.
Israel?s economic structure of the 90?s has shifted to massive concentration on the high-tech market. Almost 80% of Israel?s industrial exports are high-tech products. Israel has become a major global center for Research and Development in technological new applications and innovations. At the peak, the year 2000, we saw 250 new seed companies and start-ups being established every month.
Foreign investments, whether directly in the companies or through Venture Capitals, amounted to over 13 billion dollars in the year 2000, and over 6 billion dollars in 2001. Prosperity was hiking. Israeli high-tech companies were sold to big Silicon Valley Companies for sky-rocketing prices. You might recall one of the very famous acquisitions of ICQ, a young Israeli start-up, by AOL for 415 million dollars. Merging of Israeli companies into American and European conglomerates was a daily routine. Israel became the global hot-spot for R & D in hardward and software at the same time. Multinationals came searching for our scientists. Shares of Israeli companies heavily traded in NASDAQ, and were rated only seconds to the American bonds.
Israel invests in its youngsters, the share of the Ministry of Education in the total national budget of 9.1% the highest in the world. Investment of the government in Industrial Research and Development is 4.5% of the total national budget. The year 2000 saw a growth of 6.5% in the GNP which amounts to around 111 billion dollars per year, while GNP per capita reaches almost 18 thousand U.S. Dollars.
The global recession has affected the high-tech market in Israel as well. We can?t escape from its implications on our economy as much as it affected the whole world.
The year 2001 marked a downturn in Israel?s economic success with a negative 0.5% growth of the GNP. There is an inevitable downturn of the economic activity, small and medium size high-tech companies find it more difficult to attract foreign investments, and to export their products.
Nevertheless, Israel has the best minds in technology related industries. The global demans has diminished, no doubt, however, there will always be a need for new technologies in the world. The global market is adjusting itself to the current demands which are smaller than expected. The high-tech industries in the Silicon Valley and in Israel have apparently grown out of proportion in the last few years, whereas demand for3G telecom, e-commerce, dotcoms, etc. was at a much smaller scale than the industry offered.
I am quite confident that with the proper adjustment of this industry to the global demand, we will see a recovery of the high-tech sector in Israel as well.
Israel?s yearly exports of goods and services amount to 39 billion dollars, while total imports of goods and services amount to 43 billion dollars. Israel?s exports to the U.S. amount to 40% of the total export, to the E.U. 33%, and to Asia 18% which is 5 billion dollars excluding diamonds and military equipment. Imports from Asia amount to 4 billion dollars. Our major trade partners in Asia are Japan, South Korea, India, Hong Kong, Malaysia and Taiwan. China is becoming a very important market for Israel?s high-tech components.
And to the Philippines.
Israel?s main economic and trade interests in the Philippines are: the ICT market with as special attention to the growing telecom market, the agricultural sector, the energy sector, water management, consultancy work in infrastructure building, such as upgrading of airports, design fo new roads and bridges, banking and financing.
Bilateral trade in the past year amounted to 300 million dollars, almost 250 million dollars in Israeli exports of electronics and related equipment. In the year 2000, bilateral trade was registered at 450 million dollars. Philippine exports to Israel compose of electronic devices outsources by Israeli companies and some food and furniture items. These figures do not include, however, the transfer of capital from Israel to the Philippines by the 35 thousand Filipino workers which according to estimates amounts to over 250 million dollars per year.
Over 30 Israeli companies are represented in the Philippines, some by Israeli representatives and some by Filipinos. To mention just a few in the high-tech market, Lightscape and Enavis of ECI Group, Comverse, Gilat Satellite, Shiron Satellite, Emblaze, Breezcom in broadband, Checkpoint in internet security and many other companies selling software solutions to the banking system, smart cards, new technologies for issuing the new readable passports by the DFA, etc.
In the Agriculture sector two of our major companies selling irrigation technologies and greenhouse technologies are heavily based in the Philippines: Netafim and Plastro while Haogen Plast sells plastic storage cubes for grains, and aquatic technologies. Ilaifa Chemicals sells various fertilizers and Ilazera the best seeds in the world. ORMAT, one of the leading companies in the world in Geothermal technology has a huge project in Leyte with PNOC and is bidding for a new one in Negros. Our national airline, El-Al Israel Airlines, has an active GSM office in Manila and ZIM lines, the biggest Israeli shipping line, is represented here for many years.
This year saw the first Israeli investment in agriculture a 10 hectare green houses farm in Silang, Cavite and negotiations are currently taking place for a first Israeli investment in Subic Bay Industrial Zone.
Israel and the Philippines can definitely expand the spectrum of their economic and trade activities. Our governments have signed all possible agreements to facilitate bilateral trade. Our two business communities have to strive harder to acquaint themselves with one another and to familiarize themselves with the business opportunities existing in our two respective economies. Secretary Mar Roxas has been invited to visit Israel in the year 2002 to head a delegation of local ICT companies. An Israeli trade mission is planned for the 3rd quarter of 2002 to promote the international exhibition of Telecom scheduled to take place in Tel-Aviv in November 2002.
Business seminars on high-tech and on agricultural will continue to be organized by the Embassy. We plan to hold these seminars, as done so far, both in Manila and in other provinces as well. |