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Celebrating over 50 years of trade between Australia and Israel

02 April, 2009

Israel has always had a strong influence in my life. First of all, from the very beginning, my great-grandfather’s name was Israel – Israel Harkowitz. He emigrated from Transylvania (then Hungary now Romania), via Alexandria, to Sydney in the 1880s. By Tim Harcourt.

He married Dinah Berger from Cracow, Poland in Orange and they ran general stores all over country NSW. Dinah’s brother Daniel Berger had a boat called ‘The Wandering Jew’ that delivered supplies to the general stores around the colony.

According to family lore, whilst Daniel was a great entrepreneur, ‘Israel’ or ‘Issy’ was not but he was a snappy dresser – so people thought he was! He clearly knew about marketing and the importance of making an appearance!

Israel and Dinah’s first son, my grandfather, named Kopel was born in Lismore in 1892. Whilst Dinah always wanted to him to be a Rabbi, young Kopel wanted to be a true blue Aussie lifesaver at Bondi.

(Also, as an atheist, Kopel thought his lack of religious beliefs may be an occupational hazard if he went down the rabbinical path). He originally had trouble getting in the club as Kopel Harkowitz but when he fronted as Ken Harcourt, they said ‘no worries, you’re in Ken, we’re looking for new recruits’.

But when I used to ask my grandfather (known to us as ‘Poppy’) why he changed the family name, he used to say “Well, I didn’t really, I just left the Goldbergs and joined the Icebergs!

Secondly, I myself have lived in Israel. In fact it is 20 years ago this year that I was working on my graduate school dissertation on the economics of the kibbutz, and actually living on a kibbutz outside Haifa.

Every morning, At Kibbutz Ramat Yochanan, I was sent off to pick avocados and mangoes in the fields with 30 beautiful young Israeli and American women (with a few German, Dutch and Brazilian volunteers as well for good measure), which led to my long held belief in field work and that economists should always do things in practice first before they leap into theory.

Thirdly, when I worked for the ACTU, the influence of Israel was everywhere. As we know, the ACTU provided support for the establishment Israel in 1948, Australia’s then Foreign Minister Dr Evatt heading the United Nations.

Dr Evatt’s lead was followed up passionately by Bob Hawke’s championing of Israel’s cause (as both ACTU President and Prime Minister) with strong support since from various Labour movement leaders such as Bill Kelty, Simon Crean and now Prime Minister Kevin Rudd.

Finally, at the Australian Trade Commission (Austrade) after over 50 years of Australia and Israel active being trading partners, Israel is now an influential player in our international network and a great source of trade, knowledge, venture capital and investment for the Australian business community.

In fact I think my own wandering past, and my own time in Israel, has influenced my career as an ‘airport economist’. In fact when the Deputy Prime Minister Julia Gillard launched my book titled The Airport Economist who was in the queue to get his picture taken with the Acting PM – none other than Anthony Hollis from the Australian Israel Chamber of Commerce (AICC)!

The AICC is a star in the book and so it seems, everywhere else, has been a great supporter of Australian business both here and overseas and Austrade has been very appreciate of his energetic efforts! I said in the book, that the AICC is one of the most amazing institutions in Australian business and its vast network and quality intelligence is of great value to Australian exporters.

So we all know about the AICC but what do we know about the importance of Israel itself to Australia’s trading fortunes? In The Airport Economist, one of the most cited chapters has been about Israelis affection for the iconic Australian biscuit the Tim Tam in the chapter Tim Tams to Tel Aviv.

The chapter focuses on the amazing skill of entrepreneurs like Guy Elan to crack the Israel market and the amazing flow of trade and commerce between our two nations. But as delicious as they are, we know that Australians export much more to Israel than just Tim Tams.

According to Eric Goldberg, our man in Tel Aviv, the Australia-Israel trading relationship is a sophisticated one.

“Israel is a very interesting niche market that can provide excellent opportunities for Australian companies. Australians do everything here from agribusiness (Israel is the second largest export market for live Australian cattle after Indonesia) to exports of healthcare and other forms of advanced technology.

For example, despite its small population, Israel is one of the top ten export markets for the Cochlear ear implants due to the high level of subsidised funding for ear implantations within the framework of the social health system in Israel,” he said.

Goldberg cites water and solar energy as two key growth markets for the Australia-Israel relationship as the world tackles the problems of climate change. “Both countries have many arid regions, face difficult water management issues and are basically dry countries.  Israel’s vast research and development (R & D) in irrigation and water infrastructure is well known and provides strong potential for Australia.

In fact, whilst the old kibbutzniks used to say to me “Too much college, not enough knowledge” when I told them I was at graduate school (or they said “what good is an economist when you can’t get a plumber on the weekend?”), Israel’s high rate of education has helped develop its high levels of knowledge capital, venture capital, and strong entrepreneurial culture.

It’s like the old story of how can you tell if the beggar on the street is Israeli? He’s holding up the sign that says “please give generously; I have a spouse and 4 PhDs to support!”

And what about investment? One of my father’s favourite sayings was “Jesus may save, but Moses invests” and in looking at foreign direct investment (FDI), Israel is a major player. In terms of global ranking, the United Nations Conference on Trade and Investment Development (UNCTAD)'s FDI performance index for 2007 ranks Israel as a front runner in terms of both FDI performance and potential. Israel has ranked consistently in the top 20 for outward FDI in 2006 and 2007.

UNCTAD records Israel's outward FDI at US$46 billion and inward FDI at US$59.5 billion in 2007. With greater investment in environmental technology and water management some Israel investment may flow to Australian and vice versa in the future.

Finally, there’s “The Power of Schmooze”, whilst Israel is a small country, it punches above its weight in terms of knowledge and networks. The strong flow of immigration between Europe and Israel and South Africa, Australia, New Zealand, Canada and the USA has helped grow trade and investment between these markets.

In fact, 50 per cent of all Australian business owners who export were born overseas with Israeli connections being disproportionately represented. If you look at the exporters’ hall of fame, the names Lowy, Abeles and Gudinski all spring to mind, and the strength of the AICC are a testament to this tradition.

In fact if you look at Australia’s number of exporters to the Middle East, Israel is in third place, behind Saudi Arabia and the United Arab Emirates, illustrating how many companies in Australia have links to Israel.

But let’s get back to Bondi beach where we started. Nowadays there’s a new Harcourt (Harkowitz) at the beach – my 4 year old daughter Yun Shi who, like her great-grandfather, loves Bondi.

My American born (and now true blue Aussie) wife Jo and I adopted her Yun Shi from Guilin in 2005. And now I have a personal interest in China as well as an economic one which has been amplified since the election of a Mandarin speaking Prime Minister.

In fact, whenever Kevin Rudd comes on television Yun Shi says “That’s Kevin. He can speak Chinese! You can’t Baba (which is father in Mandarin)….but that’s ok I will be your teacher.”

I think this story as it shows that whether you are lifesaver of Romanian origin like Ken Harcourt in 1909 or a Chinese born nipper like Yun Shi Harcourt in 2009, the beach belongs to all of us as Australians and it is a great symbol of our country’s links with the world.

In conclusion, in my wandering days as an airport economist I think that my own ties with the world have been influenced by Israel on a number of levels so I would like to thank Israel, thank Australia and finally thank the Australia Israel Chamber of Commerce.

*Tim Harcourt is Chief Economist of the Australian Trade Commission and the author of The Airport Economist: www.theairporteconomist.com. Thanks to Eric Goldberg of Austrade Tel Aviv for his assistance. This article was based on a speech to the Australian-Israel Chamber of Commerce Trade Awards in Sydney.

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