2001 does not look as though it’s getting off to a bright start for Israel. The individual problems are well known, but put them together and you get an outlook that’s gloomy indeed: the peace process shot to bits; worsening political instability, as Israeli administrations prove less and less capable of lasting; and slumped stock markets, meaning less cash to fuel the locomotive of Israel’s economy, the high tech start-up sector.

Yet Globes and the Arena’s probes into what 2001 may bring discovered optimism. Venture capitalists active in Israel were asked to describe the trends in high tech investment, and to pick the start-ups most likely to make it this year. "Faith in the technologies, entrepreneurs, and start-ups in Israel remains strong as ever," said Dov Gal of Emicom, reflecting the attitude of most, even if they do not gloss over the effects of the new stringency. Which start-up emerged as favorite? At this point, we’ll just mention that it also starred in a similar project we presented two years ago, which says something in itself.

The Globes "Big Money Survey" finds investment managers in upbeat mood, and predicting handsome returns on the Tel Aviv stock market. Mind you, they said the same last time round, and 2000 ended with the Tel Aviv 25 index not far from where it started. It’s nonetheless worthwhile finding out which stocks they consider over-priced and under-priced.

As for the Israeli in the street, he or she is much less sanguine now than a year ago, but 56% of Israelis surveyed still think life is better here than in other Western countries, even if most of us reckon the economy is going badly. Good to know that, as the new millennium really gets underway, Israel remains as paradoxical a place as ever it was.

Published by Israel's Business Arena on January 1, 2001