Photo by GPO

Prime Minister Gordon Brown,
Sir Trevor,
The Honorable Ambassador of Great Britain in Israel, Mr. Phillips and Mr. Pursol, The Israeli Ambassador in London,
Distinguished Members of the business community of the State of Israel led by Mr. Brosh, the Chairman of the Manufacturers Association,
And the British group which accompanied the Prime Minister in this very important visit,
Distinguished Guests,
Ladies and Gentlemen,

I must say, Gordon, for a warm-up speech, it was extraordinary.  Thank you very much.  Actually, there couldn't be a better presentation of the merits of the Israeli economy and business community than the one that you made in this presentation right now.  But allow me before I talk about business – I want to thank you for so graciously accepting my invitation to visit the State of Israel as part of our 60th anniversary celebrations.  Great Britain is a great friend of Israel.  We had chapters in our history in which we were in some conflict before the creation of the State of Israel. While we have mixed memories, we have many memories and one which we will never forget is that the foreign minister of Great Britain in 1917 issued the famous letter that led in many different ways to the recognition of Israel's right to be the country of the Jewish people, and that made the creation of the State of Israel thirty years later a reality.  This is a landmark in the history of the Jewish people, and it is so closely and so intimately and so deeply connected to the tradition, to the attitude and to the commitment of the British people, to the Jewish people and to the State of Israel.  And therefore you follow in a long line of great British leaders who were committed to the State of Israel and I'm very proud of your leadership, of your friendship, of your support and of my personal relations with you, Mr. Prime Minister, Gordon Brown.  Thank you so much. 

Actually, I will never forget – I hope I can share it with the crowd – I'll never forget the first time that Gordon Brown came to Israel, when I was Minister of Finance and he was Minister of Finance, and he came to Israel.  We were coordinating a few times, and finally we set a date, and we decided to have breakfast at his place, at 8:00 in the morning and at 7:00 a.m., I get a telephone call and my secretary tells me, "There is a phone call from a person by the name of Gordon Brown, and he wants to talk to you."  I say, "Gee, I mean, what the hell is going on here?  I'm going to see him at 08:00 a.m., have breakfast."  And Gordon Brown is on the line and he says to me, "Listen, Ehud, something terrible happened.  When I landed, I got a telephone call from my Prime Minister asking me to come back directly to a very important vote in Parliament.  So I can't stay, I have to go right away."  I said, "Hey, Minister, when are you going to come back?"  He said, "Tomorrow, the same time."  Let me tell you something, this young man – he's younger than me – went back to London, voted the right way, won the vote in the Parliament and the next morning we had breakfast, in Tel Aviv though because there was this conference, the Prime Minister's Business Conference that we hold every year.  It was in November 2005. 

And the one thing which interested Gordon Brown then, other than direct business between Israel and Great Britain which we'll talk shortly about, was how he can contribute to the expansion of business cooperation between Israel and the Palestinians as a foundation for building up a peace process – a viable, serious, dynamic peace process between us and the Palestinians.  And we talked a lot about it, and we thought of some joint plans that will facilitate this process. And then we met in London, and Gordon hosted me as the Minister of Finance together with the G-8 ministers and the Palestinians to work plans that will build up this process and we will spend some time talking about this now as we seriously and genuinely, Mr. Prime Minister, are interested in building up the foundations for economic and business cooperation between us and the Palestinians.  Because we believe, we genuinely believe that alongside the political efforts which we are making these days in order to bring forth the peace process and the promise of Annapolis at the same time, we must build up this basis of trade and business cooperation between our two countries in order to allow ourselves and them to create a new reality of life, a new quality of life, which will make a big difference in the atmosphere of the Middle East.   And we depend largely on your wisdom, on your experience, and on your success as one of the most successful ministers of finance in the history of Great Britain to help us in advice and in action in order to move this process forward. 

At the same time of course, we are very much interested in strengthening and expanding the trade and business between Israel and Great Britain.  I'll tell you something.  I believe every word you said about us, but sometimes out of love and friendship there may be a little bit of exaggeration.  So I forgive you, Mr. Prime Minister, because I know that you did it from a very good part of your attitude and affection for the State of Israel.  There is a lot that we can learn from you; and there is a lot that we want to learn from you; and there is a lot that we hope we can join forces with you in order to achieve that will really make the Israeli economy competitive by world standards.  It is true that in the last few years we enjoyed a great deal of success, of which we are very proud.  The growth of the Israeli economy over the last four years was over 5% annually, which is quite remarkable even by comparison to some of the countries that you are familiar with: European countries, North American countries, and so on.  And the unemployment in Israel went down, so that actually now it’s 6.3%, which is below the average of the OECD countries.  At the same time, the growth of the first quarter of 2008 in the Israeli economy was over 5.4% on an annual basis, which is a remarkable achievement.  So I can now be a salesperson and tell you of all the achievements; I'm not going to do it.  Number one because I think you about it.  We talked about it.  I think these people know more about it than both of us because they are making a lot of money out of the opportunities that this climate creates.

What I want to share with you, and maybe this is the basis for the dialogue that we as governments and these communities as business people will do in the future, is that this is based, the achievements of Israel are based largely on three major contributions.  Number one is the entrepreneurial spirit of the Israeli businesspeople which is quite unusual.  Their restlessness, the impatience which in other areas of life may be sometimes an obstacle or a hindrance, when it comes to business it is apparently very helpful, and this is one thing of which we are very proud and which is recognized also for the success for many of the Israeli businesspeople not just inside the State of Israel, but also in many countries where they invest considerable amounts of money, much larger than the size of the State of Israel and the number of its people may suggest on a normal pace of life.  The other thing that I think is very important, which has contributed a lot to the ability of the State of Israel, is the high proportion of our investments in research and development.  The average, the investment in Israel in research and development is 4.7% of our GDP, which is higher than any country in the world – higher than Sweden, higher all European countries, higher than any country in the world.  Now, Prime Minister you know and I know that there is a certain element of deception here, or misleading because 4.7% of the GDP of Israel is a hell of lot in proportion, but some of the biggest companies of the world invest that much on a single basis, on a single company basis, so our interest and our ambition and our policy is to try and double the amount of investment in research and development to at least the threshold of 10% of our GDP, because we know that these investments are the source – perhaps more than anything else – for growth and for development and for innovations which characterize the nature of the Israeli economy. 

And lastly perhaps, the most important thing, the one thing which I care for more and perhaps any other thing, is the investment in education.  We haven't done enough in recent years.  We have changed our strategy entirely and we are investing now more and more in education starting with the age of birth all the way up.  Why?  Because at the end of the day, the main source of strength that we are proud of in the State of Israel is the quality of our people.  The human factor which is so significant considering the fact that under the best of circumstances, Israel will never be as populated as some of our neighbors or some of our friends from afar.  The only advantage or the only important ingredient that can keep the edge in favor of Israel is the quality of our people.  And there is no other way to improve the quality but by investing in education all the way through, from the age of birth to the kindergartens; to the elementary school; to the junior high; to the secondary schools; and then to the universities.  That doesn't mean that you will cease to hear complaints from all of these that you don't invest enough, and we hear these complaints, but at least I can report to you that in the last couple of years, we have increased the budgets of our educational systems in billions of shekels and we are going to do it because as I said, there's no other way in which the economy can expand and the country can be strengthened but by improving dramatically the investment in the human resources of our country. 

Now the rest has to be said by the people from both our communities.  I'm really happy that you asked me to join you, Prime Minister, for this event, and I'm certainly proud that even before I became Prime Minister – and as Prime Minister, I always responded to the invitations or requests of Sir Trevor, my old friend for so many years as the head of the UK Trade and Investment group to meet, to hear them, to listen to their reflections, to consider seriously their suggestions.  I spent a lot of time with Ronald Cohen trying to build up some ideas about how to utilize the energies that exist here in those parts of the country which are seriously interested in moving the peace process forward rapidly and smartly how to build up the economic infrastructure  that will allow us to move forward in the right direction, and I'm sure that the UK trade and investment group will be a partner not only to doing bilateral business between our two countries, but also help us and the Palestinians to move forward in the right direction. 

So I share your expectation that the trade between Israel and Great Britain will grow up to 3 billion pounds a year.  If I can ask Prime Minster, don't wait till until the year 2012, let's do it until the year 2010 if you don't mind, and by the year 2012, we'll reach 5 billion pounds of mutual trade between our two countries.  It’s not exaggerated, it’s possible – with your leadership, it will become a reality with the entrepreneur spirit of both these communities; it will be beneficial and profitable for both countries.

Thank you very much.