Published: 31 January 2023
Last updated: 5 March 2024
Two venture capital companies pull out of Israel in wake of warnings from economists and high-tech sector.
The warnings issued by many leading legal experts about the judicial revolution Prime Minister Benjamin Netanyahu and Justice Minister Yariv Levin are spearheading haven’t yet led the two to retreat or even look into the concerns these experts have raised.
But warnings from 270 leading economists about the damage this revolution is expected to do to Israel’s economy have put Netanyahu under a bit more pressure, because they’re talking about the market economy, and it’s harder to contend with that.
The economists’ letter isn’t written by leftists or the opposition, but by experienced professionals. It is based on research and listed several dangers – a lower credit rating, a decline in foreign investment, high-tech companies relocating operations overseas, a brain drain, and long-term damage to the economy’s growth rate and Israelis’ quality of life.
One high-tech company, Papaya, announced on Thursday that it would move its money overseas rather than leave it in an Israeli bank. Two venture capital funds that manage $250 million also announced that they were moving whatever money they have in Israel overseas to protest the planned legal revolution.
No one should make light of these steps, because they could quickly cause a domino effect that would lead other companies and funds to follow suit. Every such case would certainly give overseas investors more questions about the dubious nature of this legal revolution. The economic threat facing Israel obliges Netanyahu to realise that destroying the Supreme Court will cause enormous damage to the economy. Now is the moment to halt and prevent this.
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Israel's Economy Is in Danger (Haaretz Editorial)
