Israel innovation nation: a miracle shaped from the desert

When Malcolm Turnbull welcomed Benjamin Netanyahu last year, he spoke movingly of the Jewish state as ‘a miraculous nation’.

Israeli Prime Minister Benjamin Netanyahu and wife Sara with Malcolm and Lucy Turnbull in Sydney. Picture: Renee Nowytarger

When Malcolm Turnbull welcomed Israeli Prime Minister Benjamin Netanyahu on his historic first visit to Australia last year, he spoke movingly of the Jewish state as “a miraculous nation” that has “flourished despite invasion, conflict and an al most complete lack of natural resources, other than the determination and genius of its people”.

Turnbull was right. As Israel prepares to celebrate the 70th anniversary of its foundation, in all the narrative and incessant contest of ideas that surrounds the country there is no better way to describe its survival in a hostile world.

Israel’s success in emerging as the Middle East’s solitary functioning democracy where the rule of law and religious freedom prevail, and as a prosperous nation hewn from arid wasteland that is now a world leader in global science and technological innovation, is nothing short of miraculous.

As Turnbull emphasised, “in a region racked by war, (Israel) succeeds as the sole liberal democracy, a world leader in every field of science and technology, its culture of innovation the envy of the world”.

After the Arabs had rejected a UN-proposed partition, Israel’s founding father David Ben-Gurion declared the birth of a new nation on May 14, 1948, and became its first prime minister.

Less than 24 hours passed before Israel found itself under attack from Egypt, Jordan, Syria, Iraq and Lebanon. The fledgling state won its war of independence, but a pattern had been established. The heroic task of nation-building would be punctuated by security crises — from the 1956 Sinai Campaign, the 1967 Six-Day War and the 1973 Yom Kippur War, through conflicts in Lebanon and terror attacks within Israel to today’s Hamas-engineered turmoil.

As Colin Rubenstein, executive director of the Australia/Israel and Jewish Affairs Council, has observed, there is continuity in the fact that Israel today faces complex challenges, just as it did in the era of Ben-Gurion.

Australia played an unwitting role in the path to Israel’s foundation. Last October, Turnbull travelled to Israel to mark the 100th anniversary of the Australian Light Horse charge at Beer Sheva against a sizeable Ottoman contingent. It was a feat of arms that helped British-led forces go on to establish supremacy in Palestine, with profound consequences for the future state of Israel.

Two days after the charge at Beer Sheva, on November 2, 1917, the British issued the Balfour Declaration: “His Majesty’s government view with favour the establishment in Palestine of a national home for the Jewish people ... it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities.”

The moment of truth had to wait until another world war, Hitler’s near-successful attempt to annihilate the Jews of Europe, and Britain’s contested mandate in Palestine.

The writer Nurit Greenger has captured the impotence and agony of a people without a homeland — “a people brought to the brink of utter destruction by the genocidal policies of Nazi Germany and its allies ... we are speaking about people who were utterly voiceless and powerless to influence a largely indifferent world to stop or even slow down the Nazi final solution plan.”

The Jewish world, Greenger says, “stood hopelessly naked before its fate”.

No wonder Ben-Gurion’s declaration speaks to the lives of all Israelis as well as those of the Jewish diaspora. Its unequivocal commitment “to be a free people in our own land, the land of Zion and Jerusalem”, and never again to fall victim to the ravages of anti-Semitic tyranny after the Holocaust, is what underpins and anchors the Jewish state.

Yet its existence has often seemed precarious. Less than a decade after independence, the politician-scholar Abba Eban summed up Israel’s predicament: “Surrounded by hostile armies on all its land frontiers, subjected to savage and relentless hostility, exposed to penetration raids and assaults by day and by night, suffering a constant toll of life among its citizens, bombarded by threats of neighbouring governments to accomplish its extinction by armed force ... embattled, blockaded, besieged, Israel alone among the nations faces a battle for its security anew with every approaching nightfall and every rising dawn.”

Even so, Israelis have struggled to ensure that a siege mentality and military imperatives do not trump democratic integrity.

It has not been easy. Changes in immigration have remade Israeli politics and sharpened divisions. Demography, the settler movement and ascendant religious parties have added to the pressure. As a generation of the socialist-leaning, European-born elite passed into history, Israel’s state-managed economy was bound to be challenged. It happened amid crisis. After near defeat in the Yom Kippur War, defence spending rose to a remarkable 30 per cent of GDP two years later; by 1984, public debt was almost 300 per cent of GDP and hyperinflation touched 450 per cent.

The policy response included an austerity program, the reining in of budget deficits, a more independent central bank, privatisation and deft encouragement of venture capitalists.

These were among the preconditions for a more open economy blessed with innovation (although cartels persist and high consumer prices breed discontent).

Israel’s population of 8.5 million enjoys a per capita GDP of $46,700. Income inequality is high for a developed nation, and labour productivity lags for the burgeoning ultra-Orthodox and Arab-Israelis. Israel’s robust trade and investment links beyond the Middle East give the economy a measure of protection from the region’s political instability.

In 2004-13, export-led growth averaged almost 5 per cent per year. In 2014-17, however, average annual growth fell below 3 per cent. Israel’s uncertain security outlook had indeed dampened demand and investment.

From the outset, Israel has made expert use of meagre resources and relied on ingenuity in the face of hardship and obstacles. It could not count on abundant natural resources to fuel development; promising natural gas fields off the coast were not discovered until 2009.

With little arable land, Israelis applied themselves to the careful husbandry of water — including the invention of drip irrigation — and made the desert bloom.

The fertiliser of human talent, as well, has made all the difference to Israel. More than 700,000 Jews arrived from the former Soviet Union in 1990-97 and well over half of them were university educated, including engineers, doctors and teachers.

The “right of return” has attracted migrants with a commitment to the future of Israel.

They help explain Israel’s fame as an innovator with more start-up companies per capita than any other nation. Many spring to life in the area known as Silicon Wadi near Tel Aviv (wadi is the Arab word for valley).

Israelis have launched inventions in fields as diverse as defence, driverless vehicles and drones, digital health, agriculture and water. About 15 per cent of the world’s venture capital investment in cybersecurity finds its way to Israel.

There are many elements to this success — sheer chutzpah, a foundation of military R&D, even the exposure of the young to life-and-death challenges as soldiers.

“The experience they have in the army faces them with the need to be innovative — you do not get a pocket book that gives you answers to every situation. Many of the solutions are improvised and later on became a theory or a method,” Menahem Ben-Sasson, the former president of the Hebrew University of Jerusalem, said on a visit to Sydney last year.

“After the army, they also know how to fail — failure, and recovery from failure, is part of start-ups.

“They come to us at university very skilled, mature in life ­already. The ecosystem dictated by the security situation creates for us a special type of student that you can hardly find worldwide.”

As a foreign correspondent who has worked in the world’s conflict zones for almost as long as Israel has been an independent state, I have seen at first hand the fine qualities of the nation. Time and again, in situations of catastrophe far from home, Israelis have suddenly appeared offering to help, armed with skills and hi-tech equipment well in advance of any other available.

That was evident, for example, during the savagery of the Rwandan massacres in 1994, when millions of traumatised people were in dire need of help. It was in evidence again during the 2008 Mumbai Islamist terrorist attack. On both occasions, Israelis, despite international opprobrium against them, provided resources and other relief work that would not otherwise have been available.

In Mumbai, one of the worst terrorist attacks since 9/11, they were able to help track the terrorists in a way that would otherwise have been impossible.

Years earlier, in 1976, I was witness to Israel’s genius during the hijacking and rescue of the Air France aircraft seized by Palestinian terrorists and taken to Entebbe, in Uganda. The sheer courage and innovative brilliance of the Israeli raid to successfully rescue victims of a terrorist hijacking so far from home epitomises what the country’s achieve-ment has been all about.

Having been in Entebbe during the raid and seen the savagery of the hijackers and Uganda’s then dictator Idi Amin, I know something of the genius behind the raid, which was led by Prime Minister Netanyahu’s brother Yoni.

In tactics and strategy, Israel has had to be better and smarter than the rest. As Ronald Lauder, president of the World Jewish Congress, has pointed out, Israel has problems that would have destroyed most other countries. Sometimes those challenges seem unfathomable in their defiance of rational solutions.

“I fear for the future of the nation I love,” Lauder wrote in The New York Times in March, pointing out that 13 million people live between the Jordan River and the Mediterranean, almost half of them Palestinian.

“If current trends continue, Israel will face a stark choice: grant Palestinians full rights and cease being a Jewish state, or rescind their rights and cease being a democracy,” he warns, pressing the argument that the only viable path for Israel is a two-state solution to the Palestinian problem.

At 70, Israel confronts a strategic scenario that is finely balanced. With Barack Obama no longer in the White House and Donald Trump unstinting in his support for Israel, the Jewish state is, in many ways, better placed in international terms than it was. Significantly better relations with a number of Arab states, including Saudi Arabia, Jordan and Egypt, have also improved Israel’s regional outlook.

Yet anti-Semitism has been on the march in the heart of Europe. Jews have fled France for Israel, while partisans of UK Labour leader Jeremy Corbyn dress up anti-Jewish bigotry as progressive politics.

Iran’s Ayatollahs are unrelenting in their hatred of Israel, despite the nuclear deal that Obama agreed with them, and the threat to the Jewish state remains ominous. Quite recently, Iran’s Supreme Leader Ali Khamenei issued a new call to Muslims across the world to unite in the destruction of Israel. Meanwhile, Tehran heightens the tensions with its insurgency in collusion with Vladimir Putin in Syria, which could provide new bases from which to attack Israel.

And then there is the upsurge of violence in Gaza. Hamas terrorists are inciting impoverished Gazans into defiant protests under the banner of a “Great March of Return” aimed at reclaiming Palestine, to coincide with Israel’s 70th anniversary.

It is a reflection of Israel’s technical superiority that Hamas’s old tactic of raining down rockets on civilian population centres no longer works: Israel’s Iron Dome missile shield has effectively countered such attacks. Other technological advances have ensured that the tunnels used to infiltrate fighters into Israel are now quickly detected and neutralised.

Hamas’s latest tactic is aimed at goading Gazans in their thousands to try to tear down the fence along the border with Israel, leading to violent clashes with Israeli security forces seeking to protect the international frontier. Hamas assails a country that could help Gazans escape their misery and impoverishment (per capita GDP in Gaza is about $2190).

Hopes for a separate Palestinian state are as remote as ever. Israel has consistently been willing to negotiate peace with the Palestinians and the creation of a Palestinian state without pre-conditions. Palestinian obduracy after Yasser Arafat’s retreat from the 1993 Oslo Accords has, however, made agreement on the vital two-state solution impossible.

The Palestinian leadership is torn by internecine strife between the West Bank and Gaza. Palestine Authority President Mahmoud Abbas is obdurate in refusing to sit down and talk peace with the Israelis who, for their part, are uncompromising on the question of settlement building. The result is stalemate, the ever-present threat of violence and the sacrifice of the manifold benefits that could flow from peaceful co-existence.

“If people cannot live together decently,” remarked the Israeli writer Amos Oz, “let them live in separate cages.”

At 70, Israel can be proud of a history of nation-building unparalleled in modern times. Turnbull chose his words well when celebrating this as a “miraculous” achievement. Yet it is still the case that Israel’s security — the freedom of its citizens to live and prosper with respected borders and good neighbours — remains elusive, at best provisional. This is a shameful state of affairs and one Israel’s friends must work to remedy.

Still, there is always room for the rueful optimism of Abba Eban, who said: “History teaches us that men and nations behave wisely once they have exhausted all other alternatives.”

Additional reporting: Bernard Lane.