No. 1: The CEOs and owners of natural gas firms
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The power of the companies that control Israel's gas reserves went from being theoretical to real this year. When the Tamar offshore natural gas reserve started producing gas in April, all of Israel became captive to a monopoly controlled by U.S-based Noble Energy, Yitzhak Tshuva's Delek Group, Kobi Maimon's Isramco and Dudi Weissman's Alon Gas. These four companies control Israel's only local source of energy - and thus the price of electricity, water and even cottage cheese. Tamar's closest potential competitor, the Leviathan offshore natural gas reserve, is also controlled by Noble and Delek, alongside the Landau family's Ratio Oil and Gas. And even the newest gas reserves discovered over the past year – Tanin, Dolphin and Karish – are controlled by Noble and Delek. In other words, Israel's dependence on this monopoly is not a passing phase; it will only get worse as Israel’s reliance on gas for its electricity production increases.
In the meantime, natural gas has become a diplomatic instrument – a negotiating card vis-à-vis Russia, a way of appeasing Turkey and a strategic element in the delicate relations with Jordan, Egypt and Cyprus, among others. The gas companies have had a considerable hand in discussions about the strategic implications of Israel's gas fields, as well as whether and how much gas should be exported and how it should be taxed. Beyond their financial power, these players are also influetial in matters of security, media, government and bureaucracy. (Avi Bar-Eli)
No. 2: The bank CEOs
Israel's banks employ 48,000 workers and extend NIS 846 billion in credit. This means that each bank CEO has unusual influence over Israel's economy. Banks have always been a focus of social criticism, but since the social protests of 2011, the banks and their CEOs have come under increasing public scrutiny.
Each banking CEO will face different challenges next year, but they also face a common challenge: Meeting the Bank of Israel's capital adequacy ratio. In order to do so, they'll have to turn their backs on the big borrowers and their questionable ability to repay their debts, and instead focus on customers who have been taken for granted until now – private individuals and small businesses.
The banks also hold influence over fields including media, government, bureaucracy, high-tech and unions. (Sivan Aizescu)
Nos. 3 and 18: Insurance company CEOs
While the bank CEOs are well-known public figures, most people couldn't tell you who the insurance company CEOs are. What this means is that the Israeli public has been slow to catch up with the times, as banks lose their influence and insurance companies become the country's most powerful financial institutions. Eugene Kandel, head of the Prime Minister's Bureau for Strategic Affairs believes this shift will happen by the end of the decade. The critical point will come when the institutional investors – pension funds, provident funds and so-called manager's insurance funds, of which more than 90% are controlled by five firms, namely Clal Insurance, Phoenix, Menorah, Harel and Migdal – are managing capital market assets worth a total of NIS 1.6 trillion. At that point, the banks are forecast to have only NIS 1.4 trillion in managed assets.
Being Israel’s biggest lenders and investors, will mean much more than just financial power. There is virtually no oversight over the money managed by insurance companies, because the money isn't actually theirs – it belongs to the nation's pension savers. And since the money is not theirs, neither is the risk. Ultimately, the insurance companies can do practically whatever they want with savers' money. Furthermore, the mandatory pension legislation passed in 2008 means that working Israeli gives a certain percentage of his or her monthly salary to these companies to manage.
Ultimately, the CEOs of these companies are the ones who decide how our pensions are invested – who gets loans, which stocks to buy and even the fate of the local capital market. (Meirav Arlosoroff)