Peace through prosperity

Anne Baer — As Chairman of the Peres Center for Peace and Innovation and founder of Pitango, one of Israel’s most important venture capital funds, you stand at the cutting edge of technological innovation. But let’s start with your main commitment, that is, to peace. Can you give us some concrete examples of the programs run by the Peres Center to build a better future?

Chemi Peres — Basically I believe that peace and innovation are two sides of the same coin. One of the best examples is the Starting Up Together project. We run it as an innovation program, but it’s also a program to consolidate peace between peoples, and it enables Jewish and Arab entrepreneurs, working in tandem, to conceive and construct both commercial and social joint projects.

I’m convinced that we can only respond to the multiplication of global threats by solidarity and innovation. Solidarity means working together across borders to share information, while innovation is what enables us to find solutions. We saw this during the Covid crisis.

This is the philosophy of the Peres Center. We want to show solidarity with each other and with our neighbors. We want solidarity inside Israel. We want solidarity with other countries, whether they are our friends or our enemies.

We have, for example, launched a program aimed at improving the way municipalities function, particularly in mixed Jewish and Arab towns, or in those where secular Jews live alongside the ultra- Orthodox. We provide them with the data and tools they need to meet people’s expectations.

We also offer courses and hands-on training in new technologies and AI.

A. B. — Who are these courses aimed at?

C. P. — They are open to everyone. Israelis, of course, but also Jews outside Israel. And even the Chinese! If you really want to make progress, it’s not enough to be one step ahead. You also need to close up the gaps between those who are coming behind. Put simply, everyone needs to know what AI is and what tools are available. In a fast-evolving world, we want to give everyone the keys to the future.

A. B. — In terms of innovation, what has been done in the last few decades to enhance cooperation between Israel and the Arab world?

C. P. — The Center has worked closely with the Palestinian Authority to help it set up an infrastructure conducive to innovation and investment. We have provided support and advised on the creation of accelerators and start-ups.

Israeli companies have opened R&D centers in areas controlled by the Palestinian Authority. Mellanox, for example, has a center in Ramallah. This is also the case for Freightos, which is now listed on the stock exchange (1). Several Palestinian subcontractors have begun working with Israeli companies and international firms operating in Israel.

A. B. — Can you tell us more about cooperation between Israel and Arab countries?

C. P. — The United Arab Emirates have invested heavily in Israel, particularly in agricultural technology and communications. One of our portfolio companies in the communications sector recently raised $300 million, of which $200 million came from the Arab world, and $100 million from Israel and international investors.

The deal not only involved financing, but also the acquisition of technology through a strategic partner of one of the investors, which has numerous subsidiaries in the region: in Arab countries, in non-Arab Muslim countries, and in African countries. This company generates revenues via channels that we didn’t have access to before.

I’m convinced that the more we work together, the more we can open up markets that are currently closed to Israeli companies. This will create a dynamic that could extend to Singapore or Indonesia, far beyond the framework of collaboration between Israel and Arab countries. It’s already the case, particularly in the field of defense and security technologies.

A. B. — Pitango invests in high tech. How has this sector, which accounts for almost 20% of Israel’s GDP, been affected by recent events?

C. P. — Israeli society is made up of three key groups, each of which plays a crucial role in the running of the country.

The first comprises the defenders: the military, the defense industry, and the security services. They are Israel’s frontline protectors.

The second group are the builders: the farmers and contractors who shape our cities and landscapes.

And then there’s the third group, the innovators. Unlike the first two, which are closely tied to territories and borders, the innovation sector is global by nature. When Israeli start-ups go public, they do so on international stock exchanges. When they are acquired, it’s by multinationals. Our technology firms are not considered “Israeli,” they are global players from the word go.

These companies go on operating whatever the circumstances, even at times of crisis. Many men and women from the tech sector serve in the military reserves. We have been attacked by terrorist organizations, by Iran, and even by the Houthis, who have launched ballistic missiles from Yemen. Yet Israel continues to thrive. We grow and we innovate. We have adapted. People are used to working in these conditions.

A. B. — Unlike your father, who devoted his life to politics, you chose the world of business. Do you think that, from your position in the private sector, you can help advance the cause of peace?

C. P. — I don’t think you need to enter politics in order to serve your country. I know many politicians whose contribution to Israel is very small, and, conversely, many personalities from civil society whose impact is considerable.

It’s not who you are that counts, but what you do. Throughout my life, as a pilot in the air force, and then as a businessman, I’ve been driven, not by a desire to make a career, but by a sense of mission: to work for the prosperity of Israel.

Innovation has always been at the heart of our development. Israel is a country with a small amount of territory, lacking both water and natural resources, surrounded by enemies, and with a limited domestic market. That’s why everything we do, in the area of culture, the economy, or defense, relies on our ability to innovate. As a venture capitalist who has been investing in Israeli technology companies for over 35 years, I’ve helped raise billions for the economy, invested in hundreds of start-ups, and helped create tens of thousands of jobs.

A. B. — And not just in Israel! Half of all Israeli high-tech jobs are based abroad...

C. P. — Exactly. This is what makes us attractive to international investors. If we focused solely on local issues, no one would pay us any attention. But the areas in which we excel – from cyberspace to healthcare, from artificial intelligence to agricultural innovation – are of worldwide interest. Narendra Modi, whom I once met with my father, told us that, when he was Prime Minister of Gujarat, many farmers had saved their farms thanks to the drip irrigation system developed in the 1960s by the Netafim company. Entire regions have avoided drought thanks to this process. That’s just one of the revolutionary technologies that Israel exports around the world.

For me, working in the high-tech sector is a way of serving my country outside the political sphere. By establishing international partnerships, creating jobs, and attracting capital to our companies, we are strengthening Israel’s security and its global position. We are its unofficial ambassadors!

A. B. — Could you continue to run your business in a situation of permanent war?

C. P. — Restoring peace is, of course, a priority. But it’s even more difficult than waging war. War unites a nation around a common enemy, a shared threat. Peace, on the other hand, is often divisive. Some people don’t believe in it. Others don’t want it. Some believe that the road to peace requires another approach, such as reshaping the Middle East before tackling the Israeli-Palestinian conflict itself. People have different philosophies and visions of what peace should look like.

In 1948, following UN Resolution 181 on the partition of Palestine, Ben-Gurion took the decision to proclaim the independence of the State of Israel, on the assumption that another state would also come into being. The Oslo Accords attempted to keep this hope alive. Nothing came of it, but in the end this is perhaps the only viable way forward.

What worries me most today is that Israel does not have any unifying vision of either a one-state solution or a two-state solution. This lack of unity is dangerous.

A. B. — Do you think a Palestinian state is possible, or even desirable, in the current context?

C. P. — The central question today is not whether a Palestinian state will ever see the light of day. The real question is: can we live in peace? Can we coexist, share a future, and put an end to these endless wars? Can we offer future generations a better future than we have known?

For Israelis, since October 7, the stakes have changed. When we hear slogans like “Free Palestine” or “From the River to the Sea”, we don’t hear a call for peace, but a call for a new Holocaust. What these slogans tell us is that there are people who do not accept our existence, and who want to wipe Israel off the map. That’s the reality as we see it.

The 1947 partition plan was based on a two-state solution. Israel accepted it. The Arab world did not. Over the years, we have made considerable efforts to achieve peace. The treaties signed with Egypt and Jordan, followed by the Oslo Accords, were audacious acts. And let’s not forget that leaders like Yitzhak Rabin and Anwar Sadat paid for them with their lives. No one can accuse Israel of not wanting peace.

But we will not seek peace at the expense of our own survival. We have no intention of sacrificing ourselves. Israel is here to survive, to develop and to prosper.

Personally, I think we have to find a way of living together, whether the solution is statehood, or some other kind of agreement. The core of the problem is trust, and at the moment, trust is almost non-existent. People on both sides are afraid.

A. B. — The Abraham Accords took the world by surprise. They showed that Israel could make peace, or at least come significantly close to it, with countries like the United Arab Emirates, Bahrain, Sudan, and Morocco – something few people thought possible. What do you see as the next step?

C. P. — The Abraham Accords did not come about by chance. They are the culmination of everything that preceded them: the peace agreements with Egypt and Jordan, the Oslo process, not to mention countless back-channel meetings between Israeli and Middle Eastern leaders. It’s the result of a long, multi-layered process that has been going on for decades.

I fully support the Abraham Accords, and I pay tribute to all those who worked to bring them about, but we must not take them for granted.

We cannot restructure the wider Middle East by ignoring the Palestinian question. From the river to the sea, millions of people - Jews, Arabs, and Palestinians – live in towns, villages and hamlets, and these people sometimes have diverging opinions and aspirations. This is a problem that Israel cannot solve alone. We need the support and involvement of the United States, Europe, the Arab world, our neighbors in the region and, of course, the Palestinian and Israeli peoples themselves.

A. B. — Do you think Saudi Arabia will be the next country to join the Abraham Accords?

C. P. — I hope so. Saudi Arabia is a huge country which occupies a central position in the Middle East and is on the verge of a new era. But it also faces major internal challenges, and it will take time before things really change. We need to establish a roadmap to which everyone can adhere. It’s not a question of pushing anyone to normalize relations with Israel, but rather of looking for a way to help each other achieve this goal. Because, in the end, it is Saudi Arabia and the Gulf states that will benefit the most. They will become the main engines of growth, with positive spin-offs for the whole world.

A. B. — In light of the Netanyahu government’s domestic policies (judicial reform, dismissal of the head of the Shin Bet, attacks on other key institutions such as the Supreme Court and the Attorney General), are you worried about the future of Israeli democracy?

C. P. — Of course I’m worried! Anyone who isn’t worried is simply refusing to face up to reality. But I’ll tell you something I believe in deeply: Israelis are not made to live in an anti-democratic state. It’s simply not possible. It just won’t work. What is happening now is the product of very specific political circumstances, namely an unprecedented alignment of people and interests within the current coalition.

So I remain optimistic for the future. But, in the meantime, this government is dividing us, weakening us, creating needless suffering that our enemies will not hesitate to exploit, and acting in a way that endangers Israel’s security. I said this to the Prime Minister as soon as the reforms began. They cannot pass with such a small majority. Faced with this danger, the innovation and high-tech sector has decided for the first time to get involved. We have ignored for too long what is happening at home. But we now understand that we cannot entrust Israel’s future to other people. More and more members of Israeli society are mobilizing, ready to turn things around.

A. B. — Representatives of the high-tech sector, academia, and civil society in general have indeed begun to take Israel’s future into their own hands. Meanwhile, voices are being raised abroad calling for a boycott of Israeli science and technology to protest the situation in Gaza. What is your response?

C. P. — My response to those calling for a boycott is that, however hard it is, they have to distinguish between the people and the regime. Just as we Israelis distinguish between the Iranian people and the regime of the mullahs. Yes, Israel is a democracy, but the current government is not what most Israelis had hoped for. Israeli society as a whole aspires to peace. To boycott Israeli innovation is to shoot yourself in the foot. It’s depriving yourself of all that Israel brings to the world to make it a better place.

A. B. — How have your personal relations with representatives of the Arab world evolved since October 7? Are you still in contact with them?

C. P. — Not as much as I’d like. A lot of them are holding back. That doesn’t prevent some discreet initiatives. The Peres Center is still considered a trusted partner. Arab leaders and businessmen know that we support the peace process. Communication isn’t easy, but we still talk. Quite honestly, what I would like is for people to be able to work together out in the open without needing to hide, but without lying to themselves either. Everyone should ask themselves what they did wrong, and the Israelis shouldn’t be the only ones blamed.

The other side has made many mistakes and committed many reprehensible acts. We need to adopt a more balanced approach and take an objective look at the situation in order to figure out what will move things forward, and what will hold them back. The priority is to fight terrorists and those who, instead of looking for solutions, want to annihilate the Other. Not just in Israel, but throughout the Middle East, and even beyond, because this is a global issue.

A. B. — Let’s move on to the new corridor project. After the Second World War and during the Cold War, some intellectuals believed that economic cooperation would bring East and West closer together. It didn’t work. Yet today you’re trying to revive the dream of rapprochement through economics - the dream of your father, Shimon Peres. How do you respond to your detractors, who describe your approach as utopian?

C. P. — My father dreamed of a “new Middle East” modelled on the European Union. But the European Union has shown its limitations, and I’m not sure that the Middle East should follow in its footsteps today.

In fact, this new Middle East needs to be seen in a broader perspective, as a region stretching from India to Europe. A vast area of prosperity in which Israel can become a technological and economic superpower. Because what’s slowing our growth is a problem of access to markets, access to customers, and access to skills.

A. B. — In concrete terms, how would this project work?

C. P. — There are, of course, two preliminary steps. The first is the eradication of terrorism. Terrorists, whoever they are – the Houthis in Yemen, Hezbollah in Lebanon, ISIS, or other jihadists – pose a threat to logistics, transport and the smooth flow of trade. This is not just Israel’s problem. The whole world is concerned. All countries need to unite and work together in new ways to tackle this scourge, in a spirit of cross-border solidarity, as they did with Covid. Our enemies are not the Palestinians. Our enemies are extremists of all stripes as well as terrorists, and we must fight them wherever they are.

Secondly, we need to build trust between Israelis and Palestinians. It’s complicated, but it’s the only way to achieve a smooth transition.

I repeat, all this will take time. It’s not enough to kill the terrorists to get rid of the problem. We also need to tackle the cause. Which means, let me say it again, fostering trust and mapping out a common destiny.

I would add that this corridor has another advantage: it would counterbalance the other project to link China and Europe: “One Belt, One Road” (2). Confronted with this double movement, Turkey and Iran will be forced to decide: either they get involved in a collective project, or they remain a source of problems in the region.

A. B. — Are you ready to join forces with Arab investors to create joint ventures of the kind that have already existed for decades between Israelis and Palestinians?

C. P. — I see Arab-Israeli joint ventures, but only in my dreams! For the moment, these efforts are minimal, but once we’ve progressed towards a genuine rapprochement of all the countries in the Middle East, once we’ve decided to enter a new era and offer people a better future, the economic impact will be tremendous. The region will prosper. Investment levels will rise dramatically, releasing enormous potential that only needs stable conditions to emerge.

Developing gradually will not be enough; we need to make a real leap forward to catch up. I am convinced that Saudi Arabia, the United Arab Emirates, and Bahrain, as well as neighboring countries in the Middle East and Europe, will experience massive economic growth. And I believe that this growth will create the necessary conditions to settle the Israeli-Palestinian conflict.

The world must mobilize and form a vast coalition to enhance progress in the Middle East, and extend support to Africa. With peace and innovation, we can live in the world of our dreams: a world where there will only be winners.