Executives Representing 30 Percent of Israel’s GDP Want a Peace Deal. Will Netanyahu Listen?

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March 26 2014 11:56 AM

Muscle Tov

Israeli business leaders are pushing Netanyahu to cut a peace deal. Will he listen?

Benjamin Netanyahu
When Israeli Prime Minister Benjamin Netanyahu surveys the political scene, it is hard for him to find much upside in making a serious commitment to peace.

Photo by Abir Sultan/AFP/Getty Images

In late January, the face of Israeli Prime Minister Benjamin Netanyahu began to appear on scores of billboards in Tel Aviv. The caption read: “A strong state signs the deal. Bibi only you can do it!” The message—to work out a peace agreement with the Palestinians—was idealistic. But the money was all business. The 1 million shekel (around $300,000) advertising campaign was paid for by the Israeli wing of Breaking the Impasse, an alliance of more than 150 Israeli corporate executives.

The campaign comes at a crucial time. U.S. Secretary of State John Kerry is one month away from his April 29 deadline to release a framework agreement that will establish the U.S. government’s principles for a final deal. After nine months of discussion there is widespread worry that the framework agreement will be dead on arrival. Kerry’s demands from the Palestinians might cause Mahmoud Abbas, the Palestinian president, to withdraw from talks or lose his authority to negotiate. At the same time, Kerry’s demands for Israeli concessions over settlements or East Jerusalem might lead the Israeli right to pressure Netanyahu to withdraw from the talks. Israelis are pessimistic about the peace process, and Netanyahu has little domestic incentive to make concessions to spur negotiations.

This worries Israeli business executives. They’re concerned that Israel will face increasing international isolation, including an expanded boycott campaign, if the talks founder. BTI represents these business people. It’s planning a well-funded public campaign to pressure Netanyahu to make concessions and sign a deal.

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BTI’s first public move came in late January, when major European banks and funds divested from Israeli banks and companies. At that time, Norway’s sovereign wealth fund reissued a ban on two Israeli companies involved in settlement construction in East Jerusalem: PGGM, a large Dutch pension fund, divested from five major Israeli banks because of their business in the West Bank. Danske, a major Danish bank, divested from Hapoalim, Israel’s largest bank.

The European decisions gave a big boost to the BDS movement, which advocates boycotts, divestment, and sanctions to change Israeli policy. The policy hasn’t changed yet, but BTI’s emergence shows Israeli politics are shifting. In a country that takes great pride in its entrepreneurs and business elite, hundreds of Israeli tycoons and tech leaders are pressuring the government to sign an agreement with the Palestinians.

The pressure is both public and private. In January, Smadar Barber Tsadik, CEO of the First International Bank of Israel, visited Netanyahu with a delegation of other BTI leaders. According to Yedioth Aharot, Tsadik warned, “The largest investment fund in Holland has already announced that it will not invest in Israel anymore because of its treatment of the Palestinians—and that's a problem.” BTI leaders have had many private meetings with Netanyahu’s cabinet over the past few months to discuss the threats to Israel’s economy if the country doesn’t make peace.

Israeli business leaders affiliated with BTI cite several economic reasons for Israel to resolve the Palestinian situation. But they emphasize that the boycott movement could devastate the Israeli economy. Yarom Ariav, the executive chairman of Lavi Capital and former director general of Israel’s Ministry of Finance, told me, “The boycott issue is a threat because Israel is an open economy. We don’t have a big internal market [as] was the case in South Africa. … Our exports are about 40 percent of the GDP.” Oren Most, the founder of two major Israeli telecommunications companies, rejected the idea of “taking shortcuts to satisfy the boycotters.” But he acknowledged, “The boycotts are a potentially major threat.” The best defense against them, he argued, is “to continue to work on the peace process and let everyone know that we are doing it.”

BTI has real clout. The Israeli economy is dominated by a relatively small number of tycoons. According to Ariav, the businesspeople who make up BTI control more than 30 percent of Israel’s GDP, when you add up their personal wealth, the companies they run, and the funds they oversee. This gives BTI’s members, including tech entrepreneur Yossi Vardi and Meir Bran, the CEO of Google Israel, influence with Israel’s center-right leadership.

It also means that the January advertising blitz was a test run for a potentially far larger public campaign. According to Ariav, once Kerry reveals his framework agreement, BTI plans to fund “a campaign in the streets” to counter the “right-wing militant groups … that are pushing for no compromise.” Most says BTI’s goal is to “create the right atmosphere for [political] leaders to take the credit.”

In a January poll, 87 percent of Israelis predicted that the peace talks will fail. The left does not believe Netanyahu is interested in a two-state solution. The right is opposed to concessions on West Bank settlements and Jerusalem that would be required for peace. Furthermore, the right has passed a bill requiring a public referendum if any “sovereign” Israeli land is relinquished as part of a treaty. When Netanyahu surveys the political scene, it is hard for him to find much upside in making a serious commitment to peace. His own party has implied that it will kick him out if he does. Unless Kerry’s peace terms are radically slanted toward Israel, the referendum would pit an angry, mobilized right against a suspicious, apathetic left.

BTI wants to change that equation. Its goal, in Ariav’s words, is to “help Netanyahu find the courage to make the decision to go through with the negotiations.”

The surest sign of BTI’s influence is that it has the Israeli right worried. Uriel Lynn, the president of the Federation of Israeli Chambers of Commerce (the largest employers association in Israel) and a former Knesset member from Netanyahu’s party, Likud, told me that BTI was “behaving very irresponsibly.” Israel, he insisted, is “not going to in any way bend for economic reasons.” But he acknowledged BTI’s importance: “BTI serves a trend in Israel. They may be able to move something which would be anti-Israel.”

Likud, like Netanyahu, is fiercely pro-business and fiercely nationalistic. BTI is telling the prime minister that he can’t be both. This time, he might have to listen.

Jon Emont has written for Slate, Tablet, and the American Prospect. He's a co-founder of Extend, which offers immersive tours of the West Bank to young Jewish-Americans interested in exploring Palestinian life.

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