OECD Invites Israel For Membership Talks
Written by: Aaron Katsman | May 16, 2007
By Aaron Katsman
IsraelNewsletter.com
As if investors needed more proof that the Israeli economy has left the realm of emerging markets, today’s announcement by the OECD to invite Israel to become a candidate for membership is just what the doctor ordered. It’s important to note that the OECD has never rejected a country for membership that has been invited for membership talks.
Israel has made it a priority over the last decade to gain membership to this important organization, and today’s invitation is another major step showcasing Israel as a global economic force. Clearly an emphasis towards more governmental transparency, enacting and enforcing strict laws fighting money laundering and enforcing intellectual property rights, as well as economic reforms put in place buy former finance minister Benjamin Netanyahu, have impressed the OECD.
Today happens to be the 40th anniversary of Jerusalem reunification. In the afternoon, there is a large parade downtown in celebration. Unfortunately it’s been pouring rain outside which almost never happens in Israel in mid-May. Everyone is wondering why we are experiencing this downpour. Former Bank of Israel head David Klein, in response to Israel’s OECD invitation, clearly decided to rain on today’s parade. “ It’s roughly like having a membership card to the golf club in Caesarea. It’s prestigious and it’s a club that’s good to belong to, it adds quite a bit to national pride, but it won’t change Israel’s economic future.”
Dr. Klein, go to the 19th hole, drink a beer and relax. The membership isn’t just symbolic. It should help Israel’s credit rating improve, thus allowing us to tap foreign debt markets at a much lower interest rate, enabling significant lowering of national debt. This savings in debt servicing, used to fund continued tax cuts, could help continue the economic boom Israel has been experiencing.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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