Moscow, August 10 — “to Lead. The economy” against the backdrop of Western sanctions economic cooperation between Russia and Israel is gradually expanding. Tel Aviv not only refused to tough measures against Moscow, but also actively discussing with the EEU the creation of a free trade zone. What is the volume of the current cooperation between the two countries? Which sectors of the economy have become the Foundation of partnership, and what areas still waiting for its finest hour?

Tel Aviv. Photo: Pixabay

A small Union with great prospects of Trade turnover between Russia and Israel is not yet breaking records, but is already showing positive trends. The total volume of economic cooperation between the two countries in 2018 will exceed $2.7 billion by 9.03% or $225 million, more than in the same period of 2017. At the same time Russia exported goods worth over $1.9 billion and imported almost $765 million Therefore, the positive balance grew by 40,80% if compared with the year before.

Currently, Russia supplies to Israel precious stones and metals, mineral products, grains, wood, metals and articles made of them foodstuffs and agricultural raw materials, and receives medicines, equipment, electrical machinery, vegetables and fruits, chemical products and more. As stated earlier, the President of Fund “SKOLKOVO” Arkady Dvorkovich, the expansion of cooperation is possible, including through joint projects in such areas as agricultural technologies, digital medicine, new drug development, information technology. Of particular interest are the Israeli venture capital investments in the Russian startups, promising exchange of experts and realization of joint educational programs.

Photo: Pixabay

Overall, the middle East partner took only 41 share in Russian exports in 2018., that absolutely does not reflect the potential cooperation. However, as noted earlier in mass-media the Ambassador of Russia in Israel, Anatoly Viktorov, there is a desire to get out of this situation and to step in the near future the level of $3 billion

Partnership with diamond coating of the Russian-Israeli economic cooperation, despite yet small momentum, and it is associated with certain categories of exports.

Russia regularly supplies middle East partner of precious stones and metals. Share in total exports by the end of 2018 amounted to 30.45%, or nearly $595 million, which is 12,35% above the 2017. For example, Russia as the leader in diamond mining, he regularly brings on sale in Israel stones of special sizes (from 10,8 carats). Last year, ALROSA held in Ramat Gan six international auctions, the total revenue for the amounted to nearly $90 million At the end of may on the third of this year’s auction was sold 120 stones, including two large specimen weighing more than 50 carats, which allowed to gain more than $10 million
Photo: Pixabay

In General, Israel makes every effort for the development of the diamond industry, including waives duties on the import and export of raw materials quality jewellery and diamonds. In this country, in Ramat Gan, finds one of the leading diamond exchanges in the world, which is a separate area with specialized in this industry organizations.

Israeli startups on the Russian money Israel — the state of startups in tel Aviv, the largest rate in the world per capita. In 2016 the middle Eastern country has spent on research and development of 4.25% of its GDP. Even such giants as Google, Apple, Facebook and Microsoft have opened research centers in this country, in order not to miss potential benefits. It is noteworthy that almost all Israeli start-UPS are initially set to foreign markets, given that the population is barely 9 million people, and in Israel, employs nearly 5 thousand companies.

Russian venture funds and companies also tend to invest in stable start-up market, which is not restricted by Western sanctions, provides for the Russians visa-free regime and is in the same time zone with Moscow.

In addition, Israel continues to have a very flexible and honest at the same time legislation in relation to the entrepreneurs, which further stimulates the development of the business. According to a recent ranking of Doing Business, registration of companies and certification of documents by a notary is required no more than three days. With numerous start-up exhibition flock investors and representatives of major corporations from around the world, as well as networking events. The most famous of the last — Kinnernet.

Photo: Pixabay

In addition, unlike other countries, Israel has no biased attitude towards businessmen from Russia. So, in December 2018 Yandex started to work in Israel under the brand name taxi Yango, and in June the company announced the development of unmanned vehicles in the country. The project will involve Israeli engineers and developers and Russian specialists.

In October last year, Russian venture company Leta Capital has announced that it plans to invest in the software vendors from Israel and Eastern Europe, which specializiruetsya in the B2B sector. A year earlier, the company together with partners has invested $5.2 million in Israeli start-Qmarkets, specializing in creating solutions for business management.

Literally at the end of July, one of the leading Russian retail companies X5 Retail Group for the first time outside our country, in Israel, held a startup competition to take useful technology for analyzing customer behavior and monitor store goods.

Direction for further expansion of cooperation could be the involvement of Israeli investments in Russian start-up projects, given the high level of training of Russian developers and more acceptable cost in comparison with specialists from other countries. According to the rating 2016 at the assessment of programming skills of Hacker Rank, Russia ranked second after China, scoring 99.9 out of 100 points possible. In addition, the domestic developers have become the best in creating the algorithms.

Agriculture new Agriculture is also part of the range of promising areas of cooperation between the two countries. Russia increases export of agricultural products, gradually introducing Israeli technology in different regions and discussing with middle East partner for joint projects.

Jerusalem. Photo: Pixabay

Thus, according to the Ministry of agriculture of the Russian Federation, at the end of 2018, the volume of agricultural trade between the two countries grew by 8.9%, exceeding $500 million While domestic exports grew 38.3%. Russia supplies Israel grain products, vegetable oil, receiving in turn vegetables, fruits, juices and flowers.

Moscow and tel Aviv have already agreed to implement the Road map of cooperation in the field of agriculture, to introduce Israeli technologies to continue to increase deliveries of its products. Partner country plans to implement investment projects in dairy cattle breeding. In particular, for the launch was chosen Voronezh, Leningrad, Tambov region and Tatarstan.

In addition, in February this year, Bashkortostan has agreed with the direct investment Fund AVG Capital and the Israeli company LR Group to build in 2019-2020y large cattle-breeding complex for 7 thousand heads in Kushnarenkovskogo district. The total investment will amount to 10 billion rubles. The project, which was initiated by the company “Bashkir-Milk”, involves the use of advanced Israeli technologies and the production of 75 thousand tons of milk per year.

It is obvious that the partnership between the two countries is only growing. Cooperation is gradually moving from resource to the process direction. Perhaps the creation of a free economic zone with Israel, and this issue is now being actively discussed at the Ministerial level between the two countries will give an additional impetus to the expansion of cooperation and increasing trade turnover.

Vadim Zhorov, Director General of the Israeli-Russian consulting centre

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