When the world’s leading investor bets billions on Israel, it’s cause for optimism.
This week, Berkshire Hathaway president and stock market guru Warren Buffett announced he had purchased 80 percent of the Israeli tool company Iscar Metalworks. Israel was ecstatic over the news, with Tel Aviv Stock Exchange blue chips up 2.7 percent after the deal closed.
Two days later, Berkshire Hathaway acquired 60 percent of a second, smaller Israeli firm, Agrologic.
Buffett’s $4 billion Iscar deal made headlines because it was the biggest foreign investment agreement ever involving an Israeli tech company, the third-largest deal ever for Berkshire Hathaway and its first acquisition of a company based outside the United States.
When asked about it in an interview with PBS “Nightly Business Report,” Buffett said, “Iscar operates in 61 countries … but it’s very definitely Israel-based. That’s a very talented management there. And they’re thinking about every country in the world.”
High praise from the high priest of capitalism.
Buffett isn’t the only tycoon with the good sense to bank on Israel. Foreign investment there totaled $1.72 billion in the last two months alone.
What does all this mean for Israel’s economy, the region and the world? Bottom line, it means that despite the ongoing conflict between Israel and the Palestinians, the Jewish state is a good place for foreign investors to do business, and getting better.
It might seem incongruous that a nation facing global anti-Semitism, Palestinian terror attacks and existential threats from Iran could lure so much global capital. But Israel decided long ago to apply its formidable collective brainpower to building a better future for the nation and the planet.
Today, Israel is one of the world’s premiere high-tech centers. The country does brisk business with India, China and Europe in addition to the United States. Israelis are everywhere, lending their expertise and, by extension, their national good will to the wider world.
This is much more than a reason for the Jewish community to pat itself on the back. In this world, money talks.
Every dollar, yen and euro invested in Israel contributes to a safer and more secure nation. Because the Warren Buffetts of this world want to see healthy returns on their investments, they now have a stake in Israel’s success.
The 18th-century economist Adam Smith once famously claimed that a rising economic tide lifts all boats. If that is true, then the latest news means Israel may have smoother sailing ahead.