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The Israeli Global Impact 2030

The State of Israel has often been called a “development miracle” – an island economy with desert covering more than half of its territory which underwent rapid industrialization, established a service-based economy and became a global leader in areas such as cyber, water, health, agriculture, energy and more.  This invaluable experience and knowledge could serve as a tool for deepening Israeli cooperation with the developing world in a way that might simultaneously contribute to solving the significant global challenges facing developing countries, while providing diplomatic and economic benefit to the State of Israel and strengthening Israel's ties with diaspora Jewry. However, unlike other developed countries, Israel lacks a coherent policy of international development and lags behind most OECD countries in terms of investment in international development and humanitarian assistance.

Given Israel's limited resources, it is of paramount importance to use Israel's assets and advantages in a strategic, wise and focused manner in order to transform Israel into a small but significant player in the arena of international development and humanitarian assistance. The matter requires reconsideration of Israel's priorities and modus operandi in the developing world, removing obstacles, taking advantage of opportunities and promoting inter-sectoral cooperation. In order to meet this challenge, the Society for International Development Association - SID Israel ("SID Israel") conducted a strategic thought process over the past year aimed at formulating a policy to enhance Israel’s impact and cooperation with the developing world.

The process was conducted by a small steering committee from SID Israel and was coordinated by Dr. Jennifer Shkabatur (senior advisor to the World Bank and lecturer at the Interdisciplinary Center, Herzliya). The work of this team was based on an analysis of the experience of other countries in the field, consultations, in-depth interviews, surveys of private companies and a public opinion poll. Overall, the team held over 50 interviews with key figures from the public sector, the private sector, academia, civil society and diaspora Jewry, as well as five focus groups with key players in the field and a public opinion poll. As part of the strategic process, a number of public debates were held as well, including at SID Israel’s annual Knesset conference, a roundtable discussion at the Sderot Conference for Society, roundtables during President Reuven (Rubi) Rivlin’s visit to Ethiopia and others. The team's work even led to the adoption of Israeli Goverment Decision No. 4021, which aims to promote Israeli activity in the developing world.

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Right-to-left: Dana Manor - SID Israel, Dr. Bruria Adini - Tel Aviv University, Dr. Jeniffer Shkabatur - IDC, Alon Beer – Director SID Israel, Yoav Horowitz - PMO Director General, Sa’ar Bracha - Tahel CEO, Dina Gidron - Pears Foundation, Ron Eifer - PMO and Amir Sabhat - HCI

On May 14th,  a commission on behalf of the Society for International Development - SID Israel submitted Yoav Horowitz, Prime Minister’s Office CEO with the “Israeli Global Impact 2030” recommendations, on which we were working for the past year.

As the political reporter of “Israel Hayom”, Ariel Kahana, published, during the meeting with SID Israel, the Prime Minister’s CEO, Yoav Horowitz, confirmed that the Israeli government sees a great importance in promoting the area of international development, to assist Israeli companies and civil society organizations to act in developing markets. This will greatly contribute the Israeli economy, Israel’s political efforts, and the global effort to develop developing countries.

Yoav Horowitz, who is also the head of the inter-office team established on behalf of the decision passed last July (which is also the consequence of the strategic process led by SID Israel) regarding the development of a long-term political strategy to increase the Israeli activity in developing markets, mentioned that practically, the State of Israel must fund an investment bank, which already exists in many countries, to allow loans to Israeli entrepreneurs and investors who act in these states, to encourage the expansion of their activity.

“The developing countries of the world hold the greatest potential, and the State of Israel has exactly what they need: vast knowledge in health, agriculture, water, etc.”

The thinking process raised six central systemic recommendations which are necessary in order to enhance Israeli impact in the developing world:

  • Transition from discourse about aid to discourse about cooperation – in terms of Israeli involvement in the developing world: An approach should be promoted that encourages cooperation between government ministries, civil society organizations and the private sector, which is “win-win” in nature - simultaneously contributing solutions to specific development challenges in developing countries, while generating economic and/or diplomatic benefit for Israeli parties.
  • Establish an integrated government entity that will be responsible for formulating, updating, implementing and evaluating policy in the field: The current decentralization and lack of coordination between government ministries significantly reduces the potential for Israeli influence in the developing world. Consultations pointed to a clear and unambiguous need to coordinate government activity in the field and to have a guiding hand that will assist companies and organizations who wish to operate in the field.

 

We recommend establishing a government entity that will serve as an integrated body responsible for formulating and updating policy in this area, developing and evaluating government support tools, as well as stimulating the various ministries involved in the field, coordinating between them and advising them in accordance with changing policies and needs. This will also enable the existence of a single government address with a birds-eye view and understanding of the needs of organizations and companies active in the field, which will accumulate experience and knowledge related to cooperation with the developing world.

An integrated entity of this kind might be formed as an auxiliary unit in the Prime Minister's Office (like the National Cyber Directorate) or as a designated government office (for instance, by transforming the Ministry of Regional Cooperation into the Ministry for International Cooperation).

  • Establish an Israeli fund to promote cooperation with the developing world: One of the main challenges faced by Israeli companies and organizations seeking to operate in the developing world is difficulty in raising funds and financial guarantees for their activities. This leads some Israeli companies and organizations to turn their backs on activities in the developing world, while others explore financing outside of Israel, thereby reducing the potential for Israeli impact. As such, an Israeli development bank or development fund could play a key role in encouraging Israeli activity in developing countries, thereby contributing to solutions for concrete development challenges in target countries while also creating profit for the Israeli parties involved. We recommend that this Israel Development Fund operate according to the following guiding principles:
    • Joint Governmental-Public-Private ownership. It is recommended that the percentage of holdings in the fund be divided between the government (more specifically, the government entity that will be responsible for formulating and implementing Israel’s cooperation policy with developing countries) and public institutions - commercial banks, pension funds and insurance companies, alongside private investors.
    • Activity based on the blended finance principle, which combines equity investments, loans, grants and collateral. The Fund should operate like the European development finance institutions (DFIs) to provide a comprehensive and diversified financing and insurance package to potential investors, to hedge investor risk and to contribute to the improvement and enhancement of projects.
    • Prioritization of projects which meet the following criteria: Projects should be prioritized which (1) contribute to the achievement of United Nations sustainable development goals (SDGs); (2) offer a comparative advantage for Israeli companies (in terms of sector, geography, etc.); (3) promote long-term strategic cooperation between Israel and the developing country; (4) combine business and social activity; (5) create partnerships between Israeli companies and organizations and those representing Diaspora Jewry.
    • Provision of consulting and support services to companies and organizations seeking to expand their activities in the developing world in relevant areas (in addition to financial assistance).
  • Strategic focus: The decentralization of Israeli activity in the field of international development in various countries and sectors, the lack of coordination between the various ministries and the limited resources allocated to the field all significantly reduce the potential for Israeli influence in the developing world. An unequivocal recommendation that emerged from our consultations is the need to clearly define policy priorities for cooperation with the developing world. The strategic focus might include both specific target countries with whom the Israeli government sees the need to strengthen ties, as well as sectors in which Israel has a traditional comparative advantage. Additional considerations that may be relevant in this context are the assessment of Israeli market supply dynamics; Diplomatic exigencies; Economic necessity; Prior experience and contacts; International obligations; Contribution to the UN Sustainable Development Goals; and the Leveraging of Israeli innovation.
  • Improve government support tools for Israeli companies and organizations: Our strategic process underscored a number of potential avenues for significantly enhancing governmental support to private companies and civil society organizations aspiring to expand their activities in the developing world. These include:
  • Awareness Raising:
    • Knowledge Creation (Encouraging and supporting academic research in the field of international development and SDGs, as well as field studies to evaluate various initiatives in the field);
    • Public Activities (Convening public events, launching media campaigns, recruiting journalists, public opinion leaders and "stars" to raise public awareness of the field);
    • Educational Activities (Supporting school curricula and content on the topic of global challenges); Encouragement of research, study programs, designated courses and field research about international development in institutions of higher learning; Encouragement of internships and volunteer posts in the field in Israel and/or in the developing world;
    • Parliamentary Activity (Encouraging the activities of the Parliamentary Lobby for the Promotion of Israeli Involvement in the Developing world, organizing events in the field, promoting bilateral cooperation with parliaments of developing countries).
  • Capacity Building for Companies and Organizations: Lack of awareness by Israeli companies and organizations about opportunities in the developing world and about ways of conducting business in these countries leads to a potential missed opportunity for expanding business and social activity in these markets. In this context, our strategic process highlighted the importance of government support both in building the capacities of the private sector and in building the capacity of civil society organizations active in developing countries.

 

The recommended approach in this context is the model of the Small Business Development Centers (MATI Centers), which provide services to small business owners in Israel, such as the creation of a dedicated Internet platform; information about relevant courses and trainings; information about opportunities to recruit financing or secure guarantees and collateral;  access to information regarding ongoing business consulting and support, as well as special publications relating to specialized projects, business opportunities, networking events and more. It is recommended that such a platform be part of the array of services provided by the proposed Israeli Fund to Promote Cooperation with the Developing World.

  • Streamlining government financing tools: Government support for private-sector firms and civil society organizations interested in emerging markets is often seen as inadequate, placing Israeli companies and organizations at a disadvantage compared with competitors from other countries.

 

In terms of support for the private sector, models should be considered to offer earmarked grants, supplementary financing, subsidized loans, guarantees, and other financial and insurance tools - all to be managed by the proposed Israeli Fund to Promote Cooperation with the Developing World.

In terms of support for civil society organizations, it is recommended that Israel adopt the European and American model, in which civil society organizations act as reliable contractors on a variety of international development and humanitarian assistance projects financed and supported by governments. In the Israeli context, civil society organizations can play a major role in the export and assimilation of Israeli knowledge and experience in areas such as education, health, and community development. Given available sources of funding, these organizations can be more effectively managed than government mechanisms, contributing to problem-solving in developing countries and improving Israel's image. In order to promote the activities of these organizations in the developing world, we recommend a government support mechanism be introduced in the model of support grants to civil society organizations active in Israel. Details of the proposed "support grants" are presented in Appendix A.

  • Encouraging cross-sectoral cooperation: Organizations and companies lack coordination and information about needs and opportunities in target countries and platforms are lacking to develop relationships with potential Israeli partners. Therefore, Israel’s impact policy should be based on cooperation and coordination between the various sectors, with government assistance and with significant academic involvement, including the creation of platforms for sharing information, knowledge and experience through social networks, designated forums, work groups and more; Encouraging cooperation through grants, subsidized loans for joint projects, tax benefits, consortium programs, and more; Developing innovative financial models that integrate the different interests of civil society and the business sector; And encouraging cooperation between start-ups and civil society organizations with a significant presence in the field for purposes of pilot testing, feasibility assessments and more.
  • Encouraging cooperation with diaspora Jewry: Significant involvement of Israel in the developing world offers a rare opportunity to create a common agenda between Israel and diaspora Jewry and connect young Jews to their identity around the values ​​of Tikkun Olam. However, as of today, Israeli involvement in the arena of international development and “Tikkun Olam” is relatively small compared to this potential. Ways of promoting this cooperation include: Encouraging Jewish investors to invest in the proposed Israeli Fund to Promote Cooperation with the Developing World; Offering matching governmental funding to organizations which raise donations from Jewish donors around the world for the purpose of engagement in the developing world; Encouraging the systematic integration of professional volunteers from the Jewish world into Israeli humanitarian delegations dispatched to assist with disaster situations; Integration of modules for volunteering in developing countries into existing programs (e.g. Birthright, MASA) and other projects of the Ministry of Diaspora Affairs; etc.

               

  • Develop tools for measuring and evaluating work in the developing world: The absence of tools and methods to measure the impact of government programs prevents an objective assessment of the viability of investments in specific sectors; the need to prioritize certain strategic objectives over others; the effectiveness of various financial tools; and the level of success of specific models of business/social activity. Therefore, a government policy aimed at promoting Israeli activity in the developing world must include clear indicators to enable the evaluation and assessment of the short- and long-term impacts of the various programs.
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