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28 Jan 2023

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Israel Debates Judicial Changes Against Technology Backdrop

Israel's longest-running newspaper, Haaretz, said in a January 27 editorial that recent actions in response to the new Netanyahu government's announced plans to strengthen control over judicial appointments while weakening the country's Supreme Court's purview to rule against the legislative and executive branches “could quickly cause a domino effect that would lead other companies and funds to follow suit."

The Haaretz opinion followed concerns expressed by others in the country. The head of Israeli software company Nice , Barak Eilam, said investors he's worked with “are kind of watching (the proposed overhaul) carefully,” according to a Reuters report.

Yoav Tzruya from venture capital fund JVP also expressed concern, according to the Reuters report, saying, "I think there will be some investors that, given concerns about stability about corruption or whatever might put more hurdles in front of especially a new fund manager.”

The remarks echo a letter put together by a group of 270 business leaders and economists in Israel, which said the reforms represented “a danger to Israel's economy.” Israeli Prime Minister Benjamin Netanyahu, now beginning his third separate stint in the office, in a press conference dismissed concerns about the proposed changes - “the opposite is true,” he said. A government spokesman amplified this opinion, saying "Not only will the reform not harm the economy, it will jumpstart it," he said.

Israeli Gears
Israel is known for its technology development and exports. The tech sector comprises more than 15% of the country's economy, and tech exports more than 50% of all exports. Tel Aviv has been ranked as having one of the Top 10 technology development ecosystems in the world (with five of those in the US). Further, the Tel Aviv area was recently ranked second in the world for producing cleantech technology, trailing only Silicon Valley. The debate over Netanyahu's proposals is thus focused on one of the keystones to the country's prosperity.

Yet Israel's technology excellence is based primarily on fossil fuels. The government has a stated goal of reaching 40% renewable power by 2030, but its current use of renewables is in the single-digit percentages. The country's current GHG emissions are

Israel's EESG Score
Israel ranks 76th out of 147 nations in IDCA's EESG Digital Readiness of Nations index, on a par with Turkey, as the index reflects a nation's prospects of developing the sustainable power needed to build future Digital Infrastructure. To its credit, the country's efficiency in emissions compared to its economy falls among the top 40 countries. It also has moderately strong social structures and governance to bear to the problem, if not the superior environments found in Northern Europe, Canada, and Singapore.

The present debate over judicial change in Israel is subtext within Prime Minister Netanyahu's efforts to change the political climate of the country. Some tech leaders have spoken out against it. As the year transpires, it bears watching to see if the country will maintain its traditional tech strengths, and also be able to make progress in the areas of Sustainability and Digital Readiness.

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