TLR 158 – Regional Rumbling

This issue was intended to discuss the current agenda in both Section A: Regional Developments and in Section C: Macro-economics. However, the central item on the economic policy agenda, namely the budget for 2013-2014, is held up by lack of agreement between Finance Minister Yair Lapid and Prime Minister Binyamin Netanyahu, between Lapid and the Treasury top brass and by Lapid‟s lack of experience and probably his lack of confidence in this area. Meanwhile, developments in the foreign exchange market made it necessary to write and send (on April 9) a Bulletin on the Bank of Israel‟s renewed intervention there, which also touched on monetary policy.

I have therefore decided to simply split these topics, with the geo-political round-up now forming a stand-alone issue, and the macro-economic discussion deferred, presumably for only a short time. In any event, there are other matters to catch up on in the next issue or two, notably D: Corporate Affairs, where a slew of developments are clamouring for attention. But let me take this opportunity to note one critical non-event, which links the domestic political, macro and corporate discussions: a source I believe to be reliable tells me that the deal whereby the Israel Corporation was going to sell Israel Chemicals to the Potash Corporation of Canada, was fully negotiated and ready to go – apparently, with Netanyahu‟s blessing. Yair Lapid, in one of his first and most important decisions, killed it dead. It will never happen now, because the mood of the Israeli public has turned very ugly toward any deals involving „national resources‟ and against the „tycoons‟, but most of all against Idan Ofer, the owner of the Israel Corporation. Ofer‟s decision to move to London may have won him kudos from the Financial Times, but has destroyed what little respect he and his family still had among the public here. There is much more to say about this and allied subjects, but it is important to highlight this milestone in the process I have been writing about for two years, namely the massive swing in the public mood and its implications for corporate profits, management and even ownership.
With regard to the region, both in the narrow and wider senses, there is a great deal happening — almost all of it negative. This issue discusses a gamut of countries and problems, from the good news regarding the rapprochement with Turkey to the bad news regarding the renewed deterioration vis-à-vis Iran, this time – and crucially – led by the Americans. Let me summarise that discussion by personalizing the conclusion: whereas in 2012 I thought, said and wrote that things were moving in the direction of a negotiated „deal‟ between the US and Iran which, whether satisfactory or not from Israel‟s point of view, would have made a military confrontation unnecessary and/or impossible, in 2013 I view the evidence as pointing in the opposite direction. On that happy note, please read on…

A: Regional Developments

a) Obama came, saw – and what?

b) Rapprochement with Turkey
c) Noisy neighbours: Gaza, Palestine, Syria, Lebanon
d) Egypt: the swinging pendulum
e) Iran: This time is different?

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