Dennis Balogh

Amos Shapira

What role should governments play in business?

Subsidies are fine, says Amos Shapira, president and CEO of Cellcom Israel Ltd. (CEL), but businesses shouldn’t get too comfortable with them. “The impact is only felt in the short term,” he warns. “Ultimately, allotting government money to subsidies pulls capital away from where it needs to go, which is long-term infrastructure investments.”

How can government help business? By investing in education, suggests Shapira, 60. “Creating a culture of excellence in schools can translate into a culture of excellence across the board, including in business. A well-rounded, well-educated individual is the best type of employee.”

In terms of direct stimulus to industry, Shapira would rather see governments commit to infrastructure development. “If we have the network for fast and broad types of communications, we then have ways to leverage this network — which means we can create jobs.”

Israel, Shapira says, has made great strides in creating a dynamic and prosperous business environment. The country’s recession was relatively mild. According to the Bank of Israel, 2009 
produced 0.7 percent growth in GDP as the 
government responded to the global downturn by implementing a fiscal stimulus package, cutting interest rates, purchasing government bonds and intervening in the foreign currency market.

These efforts are paying off, says Shapira. He points out that in May, MSCI Inc. (MXB) reclassified Israel from an emerging market to a developed 
one. Also, he notes, Israel was invited to join the Organization for Economic Cooperation and Development. This, Shapira says, “puts Israel — and Cellcom Israel — in an attractive global position, 
and we see very positive reactions when we meet investors from all over the world.” — Sharon Kahn