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PM Netanyahu's Remarks at the Economic Forum in Hungary Photo by Haim Zach (GPO)
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PM Netanyahu's Remarks at the Economic Forum in Hungary

19 July 2017

PM Netanyahu's Remarks at the Economic Forum in Hungary

(Communicated by the Prime Minister's Media Adviser)


Prime Minister Benjamin Netanyahu, today (Wednesday, 19 July 2017), made the following remarks at the economic forum in Hungary:


"Thank you, Prime Minister Orbán, for inviting me to Hungary and to the Visegrad Summit.


I’m delighted to be with you and all your ministers and your associates. I am happy to have brought here MK, Member of Knesset Eichler, and of course our delegation, our ambassador, who is here, and the various businesspeople from Israel and Hungary. They already know that Hungary is a good deal. They already know.


We are here, going from here to the birthplace of Theodor Herzl, so Zionism, the movement for the modern Jewish state, was born in Hungary. And without Herzl’s genius, we wouldn’t be here. I wouldn’t be here today and I think the Jewish people’s fortunes would have been very, very different. When Herzl began his ideas at the age of 36 – and he died at 44, that’s all, eight years – he began talking about a Jewish state, eventually a Jewish army and so on. And you know, everybody said to him, “You’re crazy. Dr. Herzl, you’re crazy.”


So he heard it often enough and he thought, “Well, just to be on the safe side, maybe I am crazy.” So he went to talk to a friend of his who was also a Hungarian Jew. His name was Max Nordau. Nordau was the greatest, one of the greatest intellects of the late 19th century. He wrote a book predicting the failures of socialism and communism in the 1890s. So, he heard Theodor Herzl and he said, “My friend Theodor, you may be mad, but if you’re mad so am I.” And the partnership of these two Hungarian Jews launched the movement that ultimately culminated in the Jewish state.


So we have a special feeling for Hungary, and by the way, it’s reinforced by many directions, but yesterday I went to visit Hapoel Beer Sheva, which is our national champions that are playing tonight. So, you know, and where do I go? I see the Puskás Stadium. Now, I remember Puskás, you know. I remember many years ago, Puskás. And there are two things I remember about football when I grew up. I remember Pelé later. I remember Puskás. I also remember when an Israeli football player scored a goal against Yashin. That’s about all I remember.


So Hungary has, there’s a natural sympathy and a natural association between Hungary and Israel. I think it’s being reflected in this room, but there is another connection.


As Prime Minister Orbán described, I think it’s about 12 years ago, something like that, came to Israel and he said, “So, what can I learn from your experience.” I had been finance minister and prime minister before. And I said to him, and I’ll say this to you too. You think that technology is first. You think that mathematicians and computer engineers or mechanical engineers or doctors are first. They’re very important, but they’re not first. They’re second. Now I’ll prove it to you.


There was a country that had the best mathematicians, the best physicists, the best metallurgists in the world. But that country was very poor. It’s called the Soviet Union. But when you took one of these mathematicians or physicists, who smuggled in or got him out, you put him on a plane and you brought him to Palo Alto. Within two weeks, they were producing added value that could produce great wealth.


What comes first is markets. If you have great technology without markets, without a market-friendly economy, you’ll get nowhere. But if you have a market-friendly economy, sooner or later the market forces will give you the technology you want.


This was the main thing that I tried to bring to the Israeli economy, in my own way.


The Israeli economy began as a very closed economy. Viktor and I were speaking last night, and I asked him, “What changed your view?” I mean, grew up under a communist system. He said, well, he got to the university and somebody showed me – the professor that influenced you. Well, you know, I read, when I was 16 years old I read Ayn Rand, so I decided everything has to be libertarian. By the time I was 21, I had gotten rid of it, grew out of it. But I read Milton Friedman. I read Friedrich von Hayek. And I said they are more right where they are than the other people. They’re wrong. There’s got to be a certain balance, but it has to tilt towards markets. Markets come first.


And therefore, what we did, and the experience that you asked me was basically to free up the economy, to get people to the labor force, to reduce the amount of government control of the economy and to encourage competition and privatization – many other things. This wasn’t easy to do. I say this because then I watched what you did, and you have enacted many, many reforms. In some of them you are ahead of us. Labor mobility I think you’re ahead of us. It’s very important. And I think we can learn from each other.


And there are also limitations. There are always non-market considerations that guide national policy, and I don’t want to… I’m not going back to being 16 years old.


But what happened in Israel is a transformation from a truly controlled economy to a freer free-market or freer-market economy, and the same thing happened here in Hungary under you, Viktor, and we can see the rise of both economies.


Now comes the element of technology. Assume you have relatively free markets. Then technology becomes ascendant. And in Israel, first of all, we don’t dictate anything. There are a lot of businesses – real estate, many, many other consumer services – that are not yet hi-tech, but they do very well. Consumption in Israel growing at, what? Five percent a year? Five percent a year. Not bad. So obviously these are very good businesses and some of them are here, and they should continue.


Markets dictate what works. I don’t dictate. I don’t pretend to dictate. But we do see the development of technology. The only place where I’ve actually intervened in the market, except, you know, building infrastructure, building roads, building fast fiber, things of that sort. But where did we actually intervene in a business? Only in one area – cyber security. Do you want to see what we’ve done with cyber?


Because we know that the internet economy is going to grow anyway and it’s going to grow geometrically, so we started investing in cyber security and this is the percentage that Israel receives from global cyber investment.


You see 2016, private global investment in cyber security in Israel is 20% of the world investments. This is 200 times the size of Israel in the world population. We’re investing in cyber because it’s sunk cost. In other words, we pay for our equivalent of the NSA. I decided – can you put the Beer Sheva center? I decided that we’ll move our NSA right to this place. This is a hundred meters from Ben-Gurion University in the Negev. There is a university, our NSA and this Cyber Spark. It’s called Cyber Park. And the greatest companies in cyber security in the world are going to the Israeli Negev desert because they want to be able to partake of these talents that we encourage. We encourage them to come in. We also gave certain credits. First time that I actually intervened in a certain industry, because I know how important this is for national security and for our economy.


I went there on a visit with Steve Forbes, Forbes Magazine. So I wanted to show him all these entrepreneurs, young Israelis who are building now businesses in Beer Sheva, cyber security. And I see somebody maybe 25 years old, very, you know, very young but he looks to be very familiar. And I say to him, he’s one of these companies. I say to him, “You look familiar.” He says, “Prime Minister, I was your NSA briefer.” I said, “Oh, yes, right, correct.” I said, “So what are you doing now?” He says, “Now?” And he looks at me like this. “Now? Now I’m rich.”


So it’s important that the companies can be rich and individuals can actually gain for their talent and for investments and the risk. It’s very important. Otherwise, you can have these brilliant people, but they won’t go anywhere. And the economy won’t grow anywhere.


Markets first, technology second. The combination has given Israel great possibilities, great possibilities in many, many areas. But I won’t enumerate here.


I think that it makes sense for countries, two countries like ours – Hungary and Israel – that have moved the economy forward on market principles to now join forces on technology and business in general. I don’t limit it. I think you can make those decisions much better than this prime minister and Hungary’s prime minister. You know your business better than we know your business. Do what’s good for business. Our rule is to make sure: One, that we don’t interfere with you; and second, that we help you to the extent that we can.


We’ve decided to form a group for technological cooperation to advance certain things and I want to make clear what it is that we mean by this. We have growing demand in Israel in our hi-tech business. We cannot supply the demand because we are running into limitations of personnel. There are so many computer engineers that we can have. There are so many mathematicians, and so on. We’re training more in Israel. But I thought that it would be a good idea to invite computer engineers, mathematicians, software people from Hungary, from Visegrad countries, to come and do an internship in Israel, which is very similar to what happened to Israeli entrepreneurs who first went to work in Silicon Valley. They went to Silicon Valley, they absorbed the culture. They learned what to do with these startups and they came back and started their own.


And I think that we can solve two problems here. This is a specific idea that we’re discussing, of bringing very talented Hungarians, young men and women from Hungary and from the other Visegrad countries, to Israel for a limited time period. And then they can go back and start their own. And you will have the Israeli partners for hi-tech, for anything in business. I think this is a natural partnership. This is a great friendship. This can blossom. It is blossoming and I think it will be for the benefit of both our countries.


But the one thing that I learned: markets first, technology second. The combination is great. The combination of Hungary and Israel is great.


Thank you very, very much."