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Caspian Energy Journal Caspian European Club
Monday, 27 May 2019 10:00

Azerbaijan’s embassy in Israel will improve economic relations Featured

Azerbaijan’s embassy in Israel will improve economic relations

Caspian Energy (CE): Mr. Vice-Mayor, we would like to ask why exactly Yokneam was chosen as a place for creation of a high-tech zone.  Were geographic, climate and other conditions taken into account when making this decision?

Roman Peres, First Vice-Mayor of the city of Yokneam: What happened to Yokneam over the last 30 years? It is an unusual phenomenon which stays unclear to many people even in Israel. Many countries are studying our experience. Yokneam was founded by immigrants  from African and West European countries. By mid of 80s Yokneam was a small and unknown dwelling settlement with a population of around 4,500 people. There were two enterprises operating there. One of them was Osem enterprise engaged in food industry.  Nowadays, it is a part of Nestle firm. The second enterprise was Soltam. It was a part of a well known Israeli military-industrial enterprise which basic customer used to be Iran. At that time, every mother living in Yokneam dreamt to have her child working for Soltam Company. The thing is that a plain worker’s salary was much higher than that of a bank governor in Yokneam. All this lasted until the revolution happened in Iran, which caused cessation of all relations with Israel. 

The unemployment rate in Yokneam reached 45% in 1988-89. A massive outflow of young people from Yokneam began. A few years ago a document, issued at that period by the commission created by the government of Israel, fell into our hands. The document stated that Yokneam does not have a future and in order to prevent its disappearance it has to be linked to one of the neighboring successful cities. There were hard times at that period...

Repatriation from the USSR began in 1989 after the fall of the “iron curtain”. Simon Alfasi was elected as the mayor of Yokneam and since then he has been fulfilling his duties (30 years). Mayor elections take place every 5 years. I would like to note that the first three families which arrived in Yokneam were from Baku. The difference between Yokneam of 1990 and the present city is big. Now it is called a silicon valley and a high-tech center. We have about 150 enterprises operating and 80% of them account for high technologies. Last year, the turnover of the industrial zone totaled $7billion. Yokneam enterprise was sold to the American company two months ago for $6.9billion. The startup of that enterprise was launched in our city. Yokneam is a very young city. You may ask “how Yokneam managed to gain such big success”. We attach importance to the three main points. The first point is the development of industry. We managed to persuade the government to grant Yokneam priority privileges to develop industry. We managed to convince private enterprises to work in Yokneam. Most of these enterprises came here with their employees, skilled engineers, specialists and explorers. The second one is an education. When a young family considers any certain city for settlement, education for children is the first thing that the family pays attention to. We have created the best and successful educational system in Yokneam. Over the last 5-6 years we received a state award twice for developing an education sector in the city. The third point is a comfortable housing. Yokneam is a green city and 35% of it is occupied by housing facilities. We do not build skyscrapers, we want Yokneam to remain a small city. All these three points were the key to successful development of Yokneam.

Owing to industrial enterprises which pay a city tax, the municipalities got an opportunity to invest money into development of Yokneam. Besides, about 50% of the current budget is spent on education which is the key to our success. 

CE:  What is the difference between the tax regime of Yokneam and other cities?

Roman Peres:  Yokneam received the most-favoured-nation status from the state. Every company which came to work here received subsidies from the state. As a municipality, we decided to let companies enjoy city tax discounts during the first three years of their operation in the city. It lasted several years, but early in the 2000s the legislation changed in Israel, so we were prohibited to make such concessions. Yokneam is located close both to the center of the country and to the north.

CE:  What could you say about cooperation with the European and Caspian countries? What are your plans in regard to cooperation with Azerbaijan?

Roman Peres: We maintain contact with the European countries. Our delegations make mutual visits. They would do well to learn from us and we would do well to learn from them.Mellanox, Given imaging and others are our enterprises. They are the empires of enterprises. All startups of these companies were launched in Yokneam when they were not even able to rent an office and start their business. They were given small offices at the mayor’s request, where they managed to start their operation. After that, rapid development of companies began. Azerbaijan and Israel have very warm relations which are getting stronger year by year. The goods turnover totaled about $1.5 billion in 2018. The bulk of the goods turnover falls to the share of the military industry, oil, medical tourism, infrastructure and others. If the embassy of Azerbaijan opens in Israel in the near future, it will give even larger momentum to the relations between our countries and our peoples. The absence of the embassy hampers the work of Israeli companies at Azerbaijan’s market.  As there is no body which they can apply to, companies apply to embassies of Kazakhstan, Uzbekistan. About 100,000 persons of Azerbaijani descent live in Israel. We have much in common with Azerbaijan. We will always remember how the Jewish people fled from massacres occurred in the pre-war years in other countries and how Azerbaijan opened its doors for us. At present, representatives of the Baku Diaspora are mayors and vice-mayors of cities in Israel. They obtained a certain status in public agencies of Israel.

A year and half ago Yokneam and Gabala signed a memorandum on cooperation. Ambassador Extraordinary and Plenipotentiary of the state of Israel to Azerbaijan Mr. Dan Stav played a big role in development of this cooperation. The Head of the Executive Power of Gabala district Sabuhi Abdullayev invited the mayor and me to make an official visit to Gabala. He is a remarkable person, perfect executive and makes huge efforts to develop Gabala in all fields. We became real friends and I am proud of this friendship.  Gabala is an unusual district which is developing rapidly…

CE: Are there plans to create the similar Silicon Valley in Gabala?

Roman PeresGabala is a paradise for tourism which has beautiful hotels, mountain ski resorts and splendid clean air. Many residents of Yokneam have been to Gabala. I think there are other cities where it is preferable to develop a high-tech field.

Agriculture is rapidly developing in Azerbaijan. Irrigation system technologies bought from Israel are used here. The relationship between the two states and the two nations is very strong.

CE: Is it planned to attract ecologically clean technologies into Azerbaijan, as well as open representative offices of Israeli companies? Roman Peres: We are ready to apply our technologies in Azerbaijan if there is a relevant demand for them. In particular, I would like to note prospects of cooperation in the field of water resources and desalination of sea water.  No such problem exists in Yoknam today. The fresh water problem in Israel is very pressing in Yokneam, but the problem had been more pressing until seawater desalination plants were built at the initiative of the current Minister of Defense of Israel and former Minister of Infrastructure Avigdor Liberman. One of our agricultural startups has developed a drop irrigation technology making it possible to save water.

Today, there are very many specialists from Israel working in Azerbaijan and Azerbaijani specialists are working as interns at enterprises in Israel.

 

Thank you for the interview

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