US States, Diaspora Jews Continue Buying Up Israel Bonds Despite Pandemic Challenges, Says Outgoing President
Despite another year of unprecedented hardships caused by the coronavirus pandemic, Israel Bonds is on track to meet its targets this year in raising investments into the Jewish state, according to the organization’s outgoing president and CEO, Israel Maimon.
During the height of the pandemic, the Development Corporation for Israel — also known as Israel Bonds — hit record numbers, shoring up $1.8 billion to help offset the financial impact of COVID-19.
In 2020, the Jewish state ended with a budget deficit of 11.6%, compared with 3.7% in 2019, as the economy contracted by 2.6%. But this year, according to CEO Israel Maimon, Israel’s fiscal needs have evolved, with the economy expected to grow at a rate of 5% amid greater efforts to lower debt.
“We are still facing the same corona-related challenges as in 2020,” Maimon, who is coming to the end of his five-year tenure, told The Algemeiner in an interview. “Even though we thought that the high holiday campaign across synagogues was going look different than last year, we are now facing another coronavirus wave, and we are getting responses from Reform and Orthodox synagogues about remote or hybrid services, which is going to affect us as well.”
This year, Maimon said, Israel Bonds is expected to raise a total $1.3 billion — out of which $1.1 billion is likely to be raised from the United States.
Although more Israel bonds in total dollars were sold last year, thanks to the investment of institutions and US states, there were fewer purchasers and bondholders, he said.
At the same time, Maimon — a former Israel cabinet secretary to Prime Minister Ariel Sharon — is particularly proud of the commitment by US states, who have been increasing their investments into Israel bonds.
Several states continued their financial support for Israel this year following the clashes between Israel and the Hamas terror group during the 11-day Gaza war in May. More recently, the controversial decision by manufacturer Ben & Jerry’s to stop selling ice cream in the West Bank and eastern Jerusalem drew further pledges of backing by US state governments.
“I did not hear of any reservation or hesitation to buy Israel bonds in response to the events,” Maimon said, referring to the May conflict. “Israel Bonds is apolitical and the bonds are an expression in support of the State of Israel and the people of Israel.”
He noted that three US governors had specifically touted their purchases of Israel bonds after the Ben & Jerry’s controversy — but added that “since they are public entities, none of them would be allowed to buy Israel bonds unless they are a good investment.”
In June, weeks after the Gaza conflict, Georgia Governor Brian Kemp authorized the purchase of $10 million worth of state of Israel bonds.
“This safe investment of funds brings Georgia’s total investment in Israel bonds to $25 million. I am proud to join efforts across the country to support our friend and ally, Israel,” Governor Kemp stated.
In 2020, almost 60 state, county and municipal, pension and treasury funds invested a record $805 million worth of Israel bonds — more than double the previous highest total. Underscoring bipartisan support for Israel through the purchase of Israel bonds, investing states included Arkansas, Florida, New York, Ohio, Indiana, Illinois and Texas, according to the organization. Florida last year bought $10 million worth of Israel bonds and holds at least $60 million of the state of Israel debt.
“While in a regular year, Israel bonds is selling about $500 million to $600 million from institutions, in 2020 we were able to sell close to $1 billion,” Maimon noted. “Institutions can be local bank, or a national bank or a national insurance company that is closely held by a Jewish person or by an Israel supporter. But more than that, we are very proud that 26 US states are buying Israel bonds as well.”
“During the pandemic no one knew where the equity was going, so Israel bonds were a great place to secure your money by locking down a specific rate where you know what you get. And you are investing in a country where the money is guaranteed,” he added.
According to the Israel Bonds website, as of this month, the interest rates currently available range from 0.64–0.8% on a two-year note, and 2.70–2.85 percent on a 15-year note. As such, the State of Israel offers purchasers of the non-tradeable bonds an interest rate that is more attractive than those paid on bonds on the capital markets.
During his five years as president and CEO, Maimon — who will be leaving his post in October — oversaw investments totaling more than $6 billion worldwide.
“Our mission is to connect people to Israel through an investment, and not through a donation,” Maimon concluded. “By investing in Israel bonds you become more interested in what is happening in the country, you become more knowledgeable, you become more close and more attached to Israel so this is something Israel Bonds will continue to do.”