Intel Corp will receive a grant of $1 billion from the Israeli government for its latest investment to expand its chip manufacturing operations in the country.
But Economist Moshe Mandelbaum (who served as Governor of the Bank of Israel and helped develop the Economic Stabilization Plan) shared how it was the Rebbe’s idea that led to Intel’s — and dozens of other tech companies — investment in Israel.
Here is an excerpt from Mandelbaum’s interview presented in JEM’s My Story book:
During the audience, the Rebbe questioned me extensively about my thesis, which centered on the need to develop Israel’s industry and what measures the government had to take in this regard. “Israel’s interest rate is very high,” I told the Rebbe. “My thesis calls for lowering the rate and instituting tax benefits in order to encourage international companies to invest in our industry.”
The Rebbe disagreed with this. He said, “Serious investors are not looking for cheap loans. They have good relationships with banks and can borrow at low rates at any time without the government’s help. But while cheap loans would not be enough of an incentive for them, outright grants would be.”
I saw what a great idea this was and added it to my thesis immediately. And when I returned to Israel, I influenced members of the Knesset to pass a bill to that effect. This benefited the economy greatly, as large companies – Intel for example – opened offices in Israel, offering employment to thousands of Israeli workers.
The Rebbe gave me other advice that proved invaluable. He had the amazing foresight to suggest that Israel’s economy should be founded on Jewish intelligence. He said, “Generally, Jews are better at working with their heads. So rather than building up the manufacturing industry, try to encourage the brainpower industry.” He was absolutely right and as we all know, hi-tech has made Israel an international force to contend with.