Sushi in Tel Aviv

Today my adventure took a bit of a sidestep as I woke up with what must be a bad case of the flu. I spent the morning in bed, trying to sleep it off, and by the afternoon I was feeling way better.

As a result, I want to publicly acknowledge my infinite gratitude to my dear husband for forcing me to pack the ‘Shoppers Drug Mart Sampler Medicine Package’ he put together for me, containing no fewer than 7 different types of medicines I could choose from. While there is a local chain that was started by the same family that started Shoppers in Canada (and the stores look the absolute same), I surely did not feel like going out this morning to find a drugstore. Rafi: I love you and I promise I will never make fun of this again.

Twenty days into my adventure and, aside from the flu, I think I am also suffering from information overload.

I now can see that no one outside Israel truly understands what is going on here – and most people inside don’t either because they have little external context – and in my attempt to “get it,” I feel a bit exhausted so haven’t blogged for a few days.  

I consider myself an educated person when it comes to Israel and its issues and successes, but I was not prepared for the energy of the place and for the generosity and openness of its people, the willingness to engage and the phenomenal creative forces at play here.

Sunday (because “Sunday is Monday”) I spent the morning with Ilan Zajonts who is the co-founder of an investment Fund that uses the same principles used to finance high tech ventures, now focused on a major, country-changing real estate initiative.  Ilan took me to several cities neighbouring Tel Aviv where his Fund has either invested or is considering doing so: Ramat Gan, Rishon LeTzion, Bat Yam and a few others (we did get lost once. I wasn’t driving).

But let me backtrack first.

Israel is a small country. How small? Israel's area is approximately 20,700 sq km (7,992 sq mi), which includes 445 square kilometers (172 sq mi) of inland water. To people like me this doesn’t mean much. 

So, how small is that?

Compare it to Vancouver Island…

  Compare it to California…

 

Compare it to the UK…

So Israel is a small country -- with serious real estate problems.

First, there is a shortage of land and housing which is driving prices up. Israelis, like North Americans, value home ownership and see it as a primary investment. 

Second, Israel is subject to earthquakes and missile attacks that could create truly devastating damage in buildings built with old building standards (pre-1980) because they are not ready for the challenge.

In an attempt to motivate people to repair and renovate buildings and reinforce existing structures against earthquake and missile damage, as well as increase real estate availability,  the government decided proactively to provide incentives: Developers are now given special rights and reduced taxation in order to build additional apartments on top of existing buildings. As a result, co-op owners get a strengthened and renovated building and a Safe Room at no cost, and developers earn profits on sales of new “infill” apartments built on top. 

It has been estimated that there are 300,000 buildings in the country which qualify for this new government program so the potential to not only have safer buildings but reduce the housing shortage is definitely there. Sometimes governments do things right.

What I saw in my travels with Ilan was amazing.

The picture below shows three apartment buildings side-by-side:  in the middle is a fairly crappy building, not unlike many I have seen in other cities adjacent to Tel Aviv; to the left is a fully renovated building which looks brand new, has been reinforced and has additional floors on top; and to the right is a building in the midst of being improved.

Before-during-after

In Bat Yam, Ilan and I enjoyed at coffee at a beachfront restaurant, right across from where his Fund is investing on the restoration of 20 buildings.  In just a couple of years, the area will be completely renewed and renovated, with a substantial increase in the number of residential units available. (I want one)

In Bat Yam, the view from the real estate to be renovated.

But spending a few hours in the car with Ilan made him a captive audience and it gave me the opportunity to ask him a wide variety of questions, pretty much as there were popping into my head. He answered them all graciously and without hesitation. (Did I mention we got lost once? I am sure it was unrelated) 

How do Israelis make a living and a life here?

The Israeli standard of living is high (as of 2010, Israel had the 24th largest economy in the world) and, as far as I can tell, prices for consumer goods are about the same as at home (cars and gas are way more expensive due to taxes). But I understand that average incomes are lower than in North America. So I asked Ilan, how do Israelis make a go of it.

It seems that Israelis do not plan for retirement as much as we do (that may be a joke) because they see their home as an investment and trust their pension (75% of their last salary, and for life) to be there for them. Personal levels of debt are low and Israeli banks were in fine shape to survive 2008.

But you need to trust government for this to work. Do Israelis trust the government?

Israelis come together during external crisis, but there are deep divisions across groups in the country, especially between secular and ultra-religious citizens, he told me. Municipalities have lots of power (this comes up a lot in conversations) and often stand up to the national government (there is only the national and municipal governments; nothing in between).

What about corruption?

People see the current wave of charging government officials for corruption as a sign that democracy is working; it is a good thing. They believe that in the past it would have been considered necessary to hide the corruption. Since current cases in front of the courts are old, Ilan believes that in fact corruption in government is decreasing.

What about last summer’s citizen protest?

Last summer the State of Israel experienced a revolution: hundreds of thousands of citizens took to the streets and protested the high cost of living. Anger over rising prices fueled the 'Israeli Summer' and generated widespread support for action. 

The government wasn’t scared of the protest movement because the requests were not political in nature but social.

Ilan found this to be very exciting and positive to the democratic process -- and this struck me, so I researched the topic. It turns out he isn’t alone. Many people in Israel share his excitement about the protest – nothing at all like what we experienced in North America.

The protests motivated the Prime Minister to set up the Trachtenberg Commission to examine and propose solutions to the high cost of living in Israel. The commission concluded that 60 billion shekels should be allocated for public housing over the next five years, 5000 housing units should be built for rent and sale, corporate tax should be raised, national insurance money should be increased, tax should be reduced on imported food products, and to extend the law of free education beginning at the age of three, among other suggestions.

People like Ilan see the protest movement succeeding because for the first time there has been a shift from security issues to social ones, and no political party wanted to associate itself with it, so it never deteriorated into a political agenda debate. It was the first time in Israel’s history that the country was united on social issues outside of war. Even Israeli Arabs participated and only the ultra-Religious sat this one out.

This was all fascinating discussion, but eventually we had to have lunch. I realized I hadn’t had sushi in almost three weeks (probably the longest time ever) so I asked him to go to his favourite sushi restaurant in Tel Aviv.

With Ilan, sushi in Tel Aviv

The food was very good, and they had several original rolls (one was called a 'sandwich' - lots of rice) but nothing like my beloved Miku at home (hello Park sisters!).

At the restaurant, Ilan told me a fascinating story. As he was growing up, his father had his accounting office in the neighborhood where we were (no sushi restaurants then), and he often used to come to the area to visit his dad. In the early 1960s, he was in the area when he saw an Israeli Arab arrive with a truckload of fruits. He thinks that until then he had never seen an Arab. The man had just purchased the store right next to where the restaurant is now and was setting up shop. Within a few months, the store was the centre of activity in the area and the owner grew his businesses to several successful locations across the city. Today, his son runs the stores and Ilan always stops to greet him (unfortunately he wasn’t there that day). 

So much for “Israeli Apartheid” - again. 

Best fruit

Best fruit

Ilan, like most Israelis I have talked to, clearly differentiates between Israeli Arabs (sometimes they call them “1948 Arabs”) and consider them full and equal citizens, and the Palestinians living in the territories occupied after the 1967 war.

The former receive equal treatment in all areas of civil society, such as the law, education and the professions, access to medical care, etc., but agrees that they may not always have equal access to economic activity as Jewish Israelis do, and do have higher unemployment levels. This is mostly because Israeli Arabs live in smaller communities; the municipal powers are low; they engage in more underground economy and therefore only have access to national government funds. Often Israeli Arabs may not believe in the system enough to engage outside their villages but in many industries Israeli Arabs are leaders (for example, Construction). About 20% of Israel’s population is Israeli Arab and about 70% of them are Muslims.

On the other hand, with regards to the Palestinians, Ilan --like most people I talk to-- just wants to have a peace settlement so they can get on with their lives. Go away, so we can keep building this country.

On Monday I finally got to meet in person with Avigdor Luttinger, the man who enabled so many of the amazing business introductions I have enjoyed. Avigdor lives in Zurich and we have Skyped many times but yesterday was the first time we met in person. 

Meeting Avigdor was really the highlight of my stay thus far (OK, going to the Kotel trumps it, but you know what I mean). He embodies what I see as the spirit of Israeli entrepreneurship, having co-founded the first Israeli company IPO on Nadaq in the early 1980s (Magic Software). His generosity and wit are truly inspiring, and he enjoys tremendous respect from all those I have name-dropped to say I know him.

Avigdor Luttinger

Avigdor and I met for breakfast at a French restaurant close to my apartment, across from Kikar Rabin, called Brasserie. From my research, it is where the intelligentsia of Tel Aviv hangs out. I got there early as the place always has a line up and doesn't take reservations for breakfast. I am afraid didn't recognize anyone (because of course other than Bibi and Barak and Tzippy I am not sure I could recognize any of the local luminaries, never mind the artists) but by the way people there air-kissed, I am sure I should have.  We had a four-hour breakfast (thankfully they do not refill your cup of coffee automatically here), and it was phenomenal to listen to the stories and ideas Avigdor shared with me. I feel very grateful to him for his friendship and trust.

As an aside, I wanted to order from the Hebrew menu and was having trouble with this word: בייקון ... I was decoding to say... BA-EEH-EEH-KUN... Avigdor had a hard time not laughing when he told me it said "Bacon" -- welcome to Tel Aviv.

How do you spell it?

From our breakfast, I went to lunch at my favourite neighbourhood cafe, Cafe Masaryk, and had the pleasure of meeting with Ilan Maik. Ilan is my friend Nilly's dad - and he was as interesting and charming as she said he would be. We talked about politics and the economy, of course, and told me what his company does (Processing Controls). I was floored when he told me one his clients is the Israeli Army and he sells components for the Iron Dome.  (So far, no one I have met here seems to do trivial things). We ran out of time quickly as I had to go to a meeting in Ramat Gan, so we agreed to meet again when he returns from LA.

With Ilan Maik

(As an aside, when I got to Cafe Masaryk, the waitress told me they were thinking of sending a search party for me. I hadn't been away this long in the last three weeks!)

To lighten things up, in the evening I went to the Opera to see Donizetti’s Lucia di Lammermoor  (that was a joke; it is a tragic opera).

Tel Aviv Opera House

The Opera building, about a 7 minute walk from my apartment,  is an absolute architectural gem. Opera life in the pre-statehood Israel began in Tel Aviv in 1923 with Verdi's La Traviata. Today, it has over 18,000 subscribers and mounts an average of eight productions each season. The theatre was full, and the performance was spectacular with over 100 performers on stage.

Bad girl again: took pictures while instructed in several languages not to.

Unfortunately, the next morning (today) I woke up sick.