MBA Peregrinations

Charting the course of my travels through the MBA experience.

Saturday, February 17, 2007

Lehitra'ot Israel

As promised, here is a wrap-up on my time in Israel. All said and done, I'm very glad that I came here. It was a learning experience - culturally, socially, politically, and educationally. I'm going to preface this post by pointing out that the following are my opinions based on my limited time in Israel, and I do not claim to be an expert on Israel in particular or the Middle East in general. I haven't set out with the purpose of writing anything incendiary, but I'm writing about a place and region that is bound to elicit emotion any which way anyone writes about it. Feel free to take everything with a grain of Dead Sea salt.

Overall, my impressions of Israel and its place in the Middle East are mixed. The Israelis have worked really hard to establish the nation and are developing new infrastructure quickly, especially here in Tel Aviv. Given that a lot of modern-day Israel was essentially a desert 50-60 years ago, the rate of development and growth is impressive. They have also worked to forge a presence for themselves in the business world, with strength in industries such as high tech/software, biotech/med device. More recently, Israel has developed a strong reputation in wine and fashion. It is apparent that the Israeli population for the last 50 years has been hard-working and driven to create a successful state, and I've met several Israelis that are smart, diligent, and passionate about the future of Israel.

It has been less obvious to me as an outsider what exactly defines Israeli culture. The Israel I've seen is an amalgamation of various cultures - the laid back and mostly secular living in central Tel Aviv along with the business-driven Ramat Gan (financial district), the juxtaposition of the ultra-orthodox religious Jews and tourism-driven commerce in East Jerusalem, the primarily Muslim and majority Palestinian West Jerusalem that marks the east end of the West Bank, the socialistic qibbutz-dwellers scattered all over the country, the Bedouin that sleep in tents in the barren desert in contrast to the individuals in the north that enjoy a relatively high standard of living and the lush vegetation, and those that host many an Israeli and foreign tourist in Vegas-style resorts in Eilat. Israel is culturally a mix of European and Middle-Eastern, not surprising given the background of those that have immigrated and made aliyah (become citizens of Israel) or been residents for many years here. Many French and Russian immigrants, along with those that lived in the Middle East and Northern Africa. Overall, the salient point that these very different groups had in common was their love of the Holy Land.

And at the center of this Holy Land is Jerusalem. Socially and politically, Jerusalem is the hot potato that will act as a lynchpin for any large movements. It represents what is so incredible about the state of Israel. In Jerusalem's Old City, you have the ultra-orthodox Jewish Israeli reading the Torah at the Western Wall. A few hundred meters away, you have (what I assume because I was never physically inside) the ultra-conservative Muslim Palestinian reading the Quran in the Al-Aqsa Mosque. And then you have everyone in between in the same places - devout Jews and Muslims living in Israel that practice their faith in peace and want to build a life for themselves and their children. The similarities between the two moderate entities exist, but they aren't often recognized as much as the differences - what is heard are the louder voices of the fringe.

I was in the company of secular and moderate Jews, whose often covert and occasionally overt dislike of their Arab neighbors and orthodox brethren is not only for religious and political reasons, but also economic ones. In Jerusalem, about 1/3 of the population is ultra-orthodox Jewish, another 1/3 is NUO-Jewish (not an official term but just easier than writing out non-ultra-orthodox, ranging from secular to religious, with the majority falling in the moderate category), and the last 1/3 is Arab and Muslim. Economically, the existence of the ultra-orthodox Jews in Israel is basically state-funded. The men study in the seminary, the women work, and they receive a stipend from the state per child. They don't pay taxes. And neither does the majority of the Arab Muslim community in Jerusalem on a macro scale. There may be a few exceptions to this, but I think that many of the Arabs have chosen not to become citizens of Israel and I'm not sure about the non-obvious [anti-Zionist] reasons behind this. Only the NUO-Jewish in Jerusalem pay taxes, which means that about 35% of the population of Jerusalem is supporting the economic infrastructure and development of the city. This blows my mind. (Granted, I am from the States and Chicago GSB at that.) The economics at work here is so incredible, and something that is terribly wrong with the state of Israel -- state-funded welfare for the religious fringe (that typically have more children and likely pass on this level of expectation to their offspring much more so than the secular and economically productive population) and no economic incentives to become productive members of society. The Arabs and especially Palestinians are another deal altogether because of the political enmity.

Educationally, I believe that Israel has some catching up to do. I only took classes in English and perhaps the ones in Hebrew are much better. But I was not particularly impressed with the caliber of teaching nor the rigour of the education. And I've heard murmurings from other Israelis in their 20s that the educational system here isn't all that great. Let me be quite clear here - I'm not talking about primary schooling here, but higher general business education. The literacy rate here in Israel is outstanding and the country, for its small size, has been successful in technical innovation and feeds plenty of people into technical programs and positions abroad. But the impression I got was that many of the business ventures in Israel are innovation-driven rather than market-driven, which underscores the need for general business training. Additionally, because many Israelis work full-time and go to school part-time, the level of involvement was less than I would have expected from one of the premier universities in Israel. People were smart, but the communications were primarily through email, which made things extremely time-efficient and left little room for building relationships or a network. Additionally, the state-funded nature of the higher education system struck me as problematic. Continual protests and backing down to hikes in fees means that wages for human capital and other resources will eventually not be high enough to clear the market. Eventually, something will give - either higher taxes or reduction in tuition subsidies are the most likely. An increase in fees and/or reduction in subsidies may hurt the pocketbooks of Israelis, but paying more for it may drive individuals to demand improvement in education, which is beneficial in the long run.

Israel is a place that has some seemingly insurmountable problems, and I can see why the Israelis and Palestinians (and Syria and Egypt to certain areas) want to lay claim to the region. It has an amazing landscape and rich history, and it was well worth the visit. Toda raba to all of my friends here that educated me about life in Israel.

Okay, its now time for me to finish packing. Peace out from Israel y'all. Next stop, New Delhi, India.

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At 2:39 AM, February 17, 2007, Blogger Josekin said...

In Hong Kong, 10% of the population pay for about 90% of the taxes. Just thought that would be interesting.

At 6:10 PM, February 18, 2007, Blogger Josekin said...

By the way, Israel does show up as a dot in the map. Apparently, the web needs a little time before it counts who went where.

At 1:54 AM, February 28, 2007, Blogger Faisal said...

Nice summary of things, from a perspective that only an outsider can bring. That taxation tid-bit is mind-blowing for an economy that does much better than that of its peer countries.

At 11:50 AM, April 25, 2007, Blogger prof said...

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At 12:04 AM, January 17, 2012, Blogger Abhay Patel said...

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