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Protestors gather in Tel Aviv on April 15 to stage a protest against Israeli Prime Minister Benjamin Netanyahu’s government’s regulations restricting the powers of the judiciary.
Anadolu Agency | Anadolu Agency | Getty Images
Israeli Prime Minister Benjamin Netanyahu on Wednesday dismissed concerns about damaged investor confidence, despite massive and intensifying weekly protests over his planned overhaul of the country’s judiciary.
A recent survey by non-profit Start-Up Nation Central conducted among senior managers of Israel’s high-tech industry painted a grim picture of the country’s economic prospects. The findings, published on April 14, showed that almost 80% of company executives currently raising capital had reported canceling meetings with investors since the start of the judicial unrest.
The survey, which recorded 1,142 senior executives representing 873 companies, also found roughly 80% of startups believed the proposed reforms would likely have a negative impact on them and their portfolio companies.
Israel’s high-tech ecosystem represents about 16% of its gross domestic product, according to Start-Up Nation Central.
Asked by CNBC’s Hadley Gamble about the survey findings, Netanyahu said he believed “it is a momentary problem.”
“Look, here’s what I think. I think the future as I said belongs to those who innovate. I think the momentary fluff, the momentary dust that is in the air is just that — dust. The fundamentals of the Israeli economy are very powerful.”
His comments come at a time of unprecedented public anger. The country has been rocked by mass protests over the government’s months-long bid to push through deeply contentious judicial reforms.
Tens of thousands of Israeli citizens took to the streets of Tel Aviv and other cities over the weekend to demonstrate against measures that would give the government decisive control over the committee that appoints judges.
Netanyahu, re-elected in November to serve as prime minister for a third time, agreed late last month to delay the planned judicial reforms. The move has failed to quell opposition to the plans, however.
Critics of the proposed reforms say the measures would likely push the country toward autocracy by handing uncontrolled powers to the government of the day.
Netanyahu — who faces an ongoing trial for corruption, charges he denies — and his allies have defended the reforms as a means to curb activist judges interfering in political decision-making.
He has also labeled the protests an attempt “to create anarchy” and trigger another election. A deeply divided Israel has held five snap elections since April 2019.
‘Wait until the dust setttles’
Israel’s government was dealt another setback last week as credit ratings giant Moody’s lowered its outlook for the country to “stable” from “positive.” As a rating slips, a country faces the prospect of having to pay higher rates to potential borrowers.
Moody’s held Israel’s overall rating at A1 for the time being, however, allowing it to stay in the upper end of the investment-grade category. Israel’s government responded to the credit rating downgrade by describing the economy as “stable and solid.”
“Here’s what I have found in the past when people said to me the same thing, and I said to them the same thing,” Netanyahu told CNBC. “I said, wait until the dust settles. And what happens right now is this, the smart money moves in because they know that the fundamentals are great, they know that Israel has tremendous R&D [research and development], tremendous economic resources, tremendous ingenuity, tremendous innovation.”
He added, “I don’t want to say stupid money, [but] the less smart money moves with the herd, moves with this or that report. The smart money comes in, and they will make a lot of money. So, those who come in now, and are coming now, are going to make a lot of money. Those whose who come in a little later are going to make a little less money.”
— CNBC’s Natasha Turak contributed to this report.
