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Unsure if Israel is a democracy foreign investors are fleeing the apartheid state

February 13, 2023 at 2:53 pm

Protests against Netanyahu government’s judicial regulations and far-right policies continue in Tel Aviv, Israel on February 11, 2023. ( Saeed Qaq – Anadolu Agency )

Foreign investors are fleeing Israel over concerns that it is drifting towards dictatorship, the President and Co-Founder of the Israel Institute for Innovation, Leo Bakman, has told the Haaretz newspaper. Bakman’s institute serves as an incubator for 2,500 startups. Speaking as the head of the NGO he described the growing unease among foreign investors in doing business in Israel.

Though Israel has been an occupying power for most of its history, since its founding in 1948 following the ethnic cleansing of three quarters of the indigenous population of Palestine, it is considered a democracy. Wall to wall consensus within the human rights community that Israel is practicing apartheid has dented that image but western countries nevertheless insist on calling it a democracy.

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Judicial reform introduced by the current far-right government led by Benjamin Netanyahu has, however, caused unease over Israel’s self-proclaimed status as a democracy. The country’s President, Isaac Herzog, has himself said that the occupation state is facing “constitutional collapse.” Netanyahu’s coalition has made the overhaul of the judiciary one of its main priorities. Changes include plans to give the government control over the appointment of judges and all but eliminate the top court’s ability to strike down legislation.

The plans have been met with waves of protest which are unprecedented in Israel’s history. For weeks hundreds of thousands of Israelis have taken to the streets in opposition to the government, which decades of illegal expansion, violations of international law and mistreatment of Palestinians have not been able to do.

Recent concerns over the erosion of democracy expressed by the US have been swiftly followed by foreign investors. “Investors are taking a step back and saying: ‘First, decide whether you are a democracy or a dictatorship, and then we’ll talk’,” Bakman is reported saying while commenting on flight of foreign investors from Israel, an outcome which the global Boycott, Divestment and Sanctions (BDS) campaign has been urging for decades.

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Bakman added that Israel’s judicial reform was like “shooting ourselves in the head.” He went on to explain that just as many companies do not invest in China because they are not sure how they’ll be able to get the money out of there. Questions have come up about Israel and the actions of the current government “has created a terrible feeling and great anxiety.”

Bakman said that he has been an entrepreneur for 25 years, and in the past few weeks he has come across a question he never expected to answer: “Why Israel?” It is no longer easy to sell Israel to foreign investors despite the country’s reputation as a “startup nation.”

Echoing the fears to foreign investors, Herzog said that the reforms would cause “harm to the state of Israel’s democratic institutions,” and warned that Israel is “no longer in a political debate but on the brink of constitutional and social collapse.”

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