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As in any good drama, it started with a dead body and a question mark. On 19 October, Moni Fanan, manager of Tel Aviv’s Maccabi basketball team from 1992 to 2008, was found dead in his apartment. He had hanged himself. Fanan, 63, was a well-known figure and anyone who had watched a Maccabi game would have seen him on the sideline, enthusiastically encouraging the players.
Moni Fanan
Maccabi is Israel’s most popular basketball team and enjoys a reputation in the country equivalent to that of Real Madrid in Spain or Manchester United in the UK. During Fanan’s time at the club, Maccabi was one of the best teams playing in Europe, and despite a subsequent spate of less successful performances, it remains an influential force in the European basketball establishment.
Initial press reports following Fanan’s death were measured and cautious. But in a small country where rumours travel fast, within a few hours everybody knew that Fanan was allegedly involved in running a Ponzi scheme. It was claimed that he had been the head of a secretive “private bank” that offered high-yield investments to players and Maccabi cronies. The assumption was that Fanan killed himself either because the tax authorities had begun investigating him, or because he couldn’t pay his investors back. He was Israel’s junior version of Bernard Madoff.
What has followed, however, has been a cascade of bizarre events that have kept the nation gripped. First, some players, both past and present, admitted investing their money with Fanan. Estimates have now put the total at between $25m and $100m. It was said that Fanan, with his far-reaching connections, also managed the investments of some coaches and referees both local and foreign. The Israeli Basketball Association has had no choice but to open an official investigation.
Next came suggestions that Fanan was somehow involved with the runaway British financier Nicholas Levene who, just a few days before Fanan’s suicide, had disappeared, leaving behind debts of over £70m. The British media called Fanan “Levene’s money channel in Israel”. Levene, who has visited Israel many times in the past, reappeared a few days later and denied any connection to Fanan. But the revelations just keep coming.
This weekend a businessman in Hong Kong claimed that Fanan bought land in Macau through him. Fanan’s personal life was also placed in the spotlight after a 50-year-old woman claimed that she had been his lover for the past 15 years and that they adopted a child while he was married to another woman.
Although there are official investigations underway, analysts fear that Maccabi Tel Aviv is just too big to fall, due to its place in Israeli society, its economic might and powerful political connections.
A personal investigator has been assigned by Fanan’s widow to find out where the money is (if there still is any), but few are confident that investors will get their cash back. So this week while people might wonder how Israel will play its hand in Middle East negotiations, at home the press is following a very different game.
(published originally in Monocle on November 18th 2009)
The most recognisable face these days in Israel is that of a missing person. His name is Gilad Shalit, a 23-year-old corporal held captive for more than three years in Gaza by the Palestinian movement Hamas. The sensational press constantly report every shred of information about him – leaked more than often by not-so-reliable sources, thus creating an emotional rollercoaster for an entire nation.
Gilad Shalit
But the dilemma facing Israel’s prime minister, Benjamin Netanyahu, is far from simple. Shalit was kidnapped by Palestinian militants who crossed the border into Israel in 2006, a year after Israel’s disengagement from Gaza. A video released by Hamas just 10 days ago was the first visual sign of his good health.
 As a matter of tradition, negotiations between Israel and its neighbours are never on an equal basis. In June 2008, for example, Israel swapped five Lebanese convicted terrorists for the bodies of two of its dead soldiers. Now Hamas wants Israel to release 1,000 Palestinian prisoners for Shalit. One thousand for one, that’s the equation.
Netanyahu, it seems, would be crazy to agree. Some of the prisoners are being held in Israeli prisons for horrific and deadly acts of terror. Hamas’s prime minister, Ismail Haniya, has said that after Shalit there will be “another Shalit and another Shalit and another Shalit”, until all his demands are answered. Can a responsible leader possibly agree to such terms? The US government, for example, is known not to negotiate prisoner swaps to gain the return of its kidnapped soldiers. The reasoning is that terrorists must never be rewarded for their crimes. 
On the other hand, Shalit was sent to the border by the government of Israel, which bears the responsibility to bring him back home. Is it really fair for a young soldier to get caught up in such games? 
But here the plot thickens even further. Danny Rubinstein, Israeli author and analyst of Palestinian affairs, says that an agreement with Hamas will have far-reaching consequences on the inner politics of the Palestinians. In fact, he says, “An agreement between Israel and Hamas would be like a bullet in the head for the president of the Palestinian Authority, Mahmoud Abbas.”
Hamas and Abbas’s Fatah party are at loggerheads over governing the Palestinian people. Releasing so many prisoners, says Rubinstein, would be perceived as a tremendous success for Hamas, thus ridiculing Abbas in the eyes of his people. Israel might not be a huge fan of Abbas, but much less so of his militant opponents in Gaza.
The end is yet to be seen. In the meantime, Netanyahu is trying to barter for the best bargain he can. But as in so many other cases in the region, Israel remains without any really good cards in its hand.
(published originally in Monocle on October 13th 2009)
Tel Aviv (photo: Deror Avi)
“There are prettier ones”, wrote once the Israeli poet Nathan Alterman about the city of Tel Aviv, “but none share its beauty”. Just like a child that is loved and cherished by his parents simply because he is their own creation, even if another boy might be taller or somewhat faster, so was Tel Aviv held dear by the poet who emigrated from Poland in 1925, simply because it was his own city, where he was neither a stranger nor a second rate citizen.
As its citizens now celebrate the 100th birthday, Tel Aviv still fulfils this same purpose of allowing the Jews a place of their own, a city where they can once and for all govern themselves and in which they can take pride. Indeed, Tel Aviv’s leafy boulevards and trendy bars are a reminder of how successful the Zionist movement is, and how well it achieved its main goal, which is a descent and honourable life for the Jews.
Consider this: after 2,000 years that Jews have not built a city, 66 families assembled on bare dunes just north of the mostly Arab port city of Jaffa. That was 1909, just 100 years ago, and the wandering Jew decided to build upon the wandering sands a permanent dwelling. By 1920 Tel Aviv had 2,000 inhabitants, by 1924 almost 20,000, and by 1925 – 40,000. Nowadays it’s a bustling hub with a population of more than a million in its metropolitan area.
As an act of defiance to 2,000 years of tradition, Tel Aviv’s founding fathers placed at the heart of their new community a secular educational institution instead of a synagogue. At the Herzliya Gymnasium, named after Theodor Herzl, students would learn for the first time in Hebrew, not in Yiddish or in any other European language.
This Promethean deed was only the first in a series that would position Tel Aviv at the heart of the modern and secular Zionist revolution. “The first Hebrew city”, as it is called, came to symbolize Zionism’s break with the past, and its rejection of any kind of ghetto-like circumscription. Indeed it was a choice – a choice to break with the Eastern European shtetl in favour of liberal and modern ideas.
Jerusalem is of course Israel’s capital. It is also the historic, religious and emotional centre of the Jewish world. But had it not been for Tel Aviv, Israel wouldn’t have been such a modern, liberal and western country. If Jerusalem stands for the past, with its solid rocks and tense emotions, Tel Aviv stands for the future, with its Mediterranean climate and optimistic easygoingness. Sir Patrick Geddes, the Scottish urban planner responsible for Tel Aviv’s master plan, said back in the 1920’s that it is a Jewish city that really lives, free of inhibitions felt so often in Jerusalem.
It is in Tel Aviv that finance and commerce take place. It is Tel Aviv that artists, musicians and actors flock to. It is in Tel Aviv where the four largest newspapers are located, and two of the largest universities, not to mention innumerous schools, galleries and art venues – all of which operate in Hebrew.
Not that it’s always an easy city. Patience, for example, is a commodity on demand: a shrewd observer once suggested defining the shortest unit of time as the splits of seconds it takes a driver in Tel Aviv to blow his horn when a red traffic light turns to green. And everyone has something to say – that’s why the main square of Tel Aviv turned quickly into a debating platform, where week after week rightists, leftists, pacifists, atheists and you name it, come to demonstrate, voice their opinions and share their aspirations.
It is by far the most plural and open city in Israel, not to mention the whole Middle East. In the late 19th century, when author Elhanan Levinsky wrote in his utopian novel that in the first Hebrew city “no one will ask you who you are, what your business is, and from where and to where you are going”, he couldn’t have envisaged that one day gay and lesbian Palestinians will find refuge in Tel Aviv. But they do, because they feel safer there than in their traditional and repressive environment.
Drive in its streets at 2am in the morning on a given Thursday night, and you’ll find yourself in traffic jams more often seen in London or New York during rush hours. You’ll see old people and young, dark-skinned and blonde, elegantly dressed and trashy.
Just a few days ago, while walking a Tel Aviv street at night-time, I have seen a typical view of this mixed and vibrant city: young people crowded the pavements, drinking cava. Above their heads were suspended posters of American President Barack Obama. Large garbage cans were leaning against the display window of a “Caucasian Coffeehouse” (whatever that means).
This chaos reverberates the words of the first city engineer, Yehuda Megidovitz, who used to say: “First you build, then you do the measurements”. But it is exactly this pandemonium that gives Tel Aviv its irresistible charm – the feeling that whoever you are, you’ll find your place there.
The whole point of the Zionist movement was to find a place for the Jewish people and to bring it back to life through a concrete geographical space. No other place does this better than the city of Tel Aviv, which might be called the capital of Zionism. Its 100th birthday should be seen as the clearest proof for Zionism’s triumph.
Have the latest revelations about a secret uranium-enrichment plant made an Israeli attack in Iran more probable, imminent even? Not necessarily. Such a plant might indeed mean that Iran is getting ever closer to obtaining nuclear weapons. But since all indications are that the Israeli intelligence already knew about this plant a couple of months ago, the genuinely significant development, in Israeli eyes, is Barack Obama’s, Gordon Brown’s and Nicolas Sarkozy’s signalling that this time they really mean business when it comes to the Iranian regime.
Nicolas Sarkozy in Pittsburgh (photo: Elysée Palace)
For years, Israeli officials have argued that an Iranian nuclear bomb is not like any other country’s nuclear bomb. According to most Middle Eastern analysts – Israeli, Arab and western – Iran’s official attempts to export the Islamic Revolution around the region have turned it into a source of great instability. Taking into account Israel’s tiny territory (75 times smaller than Iran’s), and the latter’s open and ongoing threats to “wipe Israel off the map”, it is not surprising that Israel considers a Iranian nuclear bomb as such a paramount concern.
As the months and years have gone by, the international community’s response to Iran’s nuclear project has seemed hesitant and slow. A fragmented Security Council, unfinished wars in Iraq and Afghanistan and the American intelligence failure leading up to the Iraq war, have repeatedly let Iran off the hook. Despite a few rounds of sanctions, Iranian leaders have sounded defiant as ever, firm in their quest to achieve nuclear capabilities.
And Israel has felt more and more cornered, with no real alternative but to act independently. While for most countries around the world believe that an Iranian nuclear bomb might pose theoretical questions about the effectiveness of the non-proliferation regime, for Israel it’s a question of life and death.
“This latest disclosure shows that the Israeli assessments were right,” says Avner Cohen, a University of Maryland professor and author of the book Israel and the Bomb. “The Israeli intelligence did not believe the American assessment of 2007, according to which Iran had halted its nuclear programme. Now it appears that Israel wasn’t just pessimistic or war-mongering. It is a game-changer as to future negotiations with Iran, especially those that will start just this coming Thursday [Group of Six meeting with Iran in Geneva].”
Therefore, Israel had been encouraged to see a decisive Obama and a grumpier-than-ever Sarkozy in Pittsburgh. An international commitment vis-Ã -vis Iran will probably yield better results than any other possibility, given the carrots and sticks Iran’s trading partners can offer and the difficulties in carrying out any military action. This is why ex-prime minister Ariel Sharon’s attitude was that Israel has to keep a low profile in matters concerning Iran.
So now the ball is again in the international community’s court. It remains to be seen if this is a serious attempt to solve the problem or just another photo-op. The EU, after all, is still Iran’s largest trading partner (with $25bn worth of trade in 2008). Maybe instead of waiting for Chinese approval of new sanctions, Germany, Italy, France and other European countries should start by giving their own example.
(Originally published in Monocle, September 28th 2009)
The somewhat odd celebrations on the first birthday of the financial crisis offered much remorse and only dim rays of hope. Standing in stark contrast, though, was the Israeli version of that anniversary, marked mainly by the feeling that the worst is already behind us, and that actually it wasn’t that bad.
Israeli New Shekels
This week, UBS joined Morgan Stanley and Barclays Capital in projecting positive growth of 0.3 per cent for the Israeli economy this year. According to The Economist, this will make Israel the only developed economy in the world with a positive growth rate in 2009.
Earlier this month, Moody’s Investor Services concluded that Israel’s recession appears to be over, while HSBC economists wrote that Israel had shown “tremendous resilience to the global recession”. In August, Bank of Israel governor Stanley Fischer was the first among his colleagues in the West to raise the interest rate, thus proclaiming an end to the recession.
So what went so (relatively) well here?
 
First of all, Israel entered the crisis in a very different situation to others: with no toxic bank assets and no property bubble. Israeli banks have traditionally been conservative lenders, and “sophisticated” financial tools were far less in use. Public and private levels of indebtedness were also very low.
Crisis did hit eventually, exports shrank and around 2 per cent of the workforce (more than 60,000 people) joined the ranks of the unemployed – the rate now stands at 7.9 per cent.
The big star of the crisis is no doubt Mr Fischer, who took a few resolute steps. He cut interest rates, bought government bonds and spent some 100bn shekels (€18bn) to buy dollars in order to help exporters.
But it seems that his most useful asset as the crisis unfolded was his leadership skills, and his ability to “speak softly and carry a big stick”. On the one hand, he was much more visible than usual, sending the market and the citizens a clear message that someone’s taking care of things. On the other hand, he reiterated time and again his refusal to spend public money in order to bail out companies.
Another important lesson is the advantage of being small. Dan Catarivas, director of foreign trade at the Israeli Manufacturers Association, says that Israeli companies were very flexible this year, and managed to shift their activities to markets with high demands. “Israeli companies are no General Motors,” he says, “and they can easily shift from providing services to the car industry, for example, to selling components to electronic goods manufacturers.”
Israel, of course, is not comparable to the big players, but rather to medium-sized economies, such as Hungary, Greece, Portugal and the Czech Republic. In the Israeli case, the crisis showed that it’s sometimes easier to navigate a small speedboat than a huge aircraft carrier.
(Published originally in Monocle, September 24th 2009)
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