tv The David Rubenstein Show Peer to Peer Conversations Bloomberg March 16, 2018 6:00pm-6:30pm EDT
? david: when you have problems with weather, do you ever communicate directly with god? pm netanyahu: all the time. we used to say it was a local call, but you know, the internet changed all that. [laughter] david: the iranian agreement. you are skeptical. pm netanyahu: you either fully fix this deal, or you fully nix it. david: what is the pleasure of being prime minister? pm netanyahu: oh, investigations. [laughter] [applause] david: the israeli economy is doing quite well. pm netanyahu: if you are not investing in israel -- is anyone here not investing in israel? invest in israel! >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ?
david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? thank you very much for coming, mr. prime minister. i know you have a busy schedule and you are flying to new york afterwards. the weather is not good. when you have problems with weather, do you ever communicate directly with god about the weather, or how do you deal with that? [laughter] pm netanyahu: all the time. we used to say it was a local call, but you know, the internet changed all that. [laughter] [applause] david: no doubt. ok. so, the israeli economy is doing quite well by almost any standards. why is that when you have so many people around you
threatening your existence, why do people want to invest in israel? why should people invest in israel? pm netanyahu: because it is a combination of free markets and incredible technology. technology without free markets does not take you very far, and free markets without technology do take you quite a distance, but israel has the combination because we deliberately, i deliberately moved it that way. so that withstands a lot of stuff. it also gives you the technology to maintain your security, so israel may be living in a very tough neighborhood, but we protect the country very, very well, and we enable the markets, the innovation, the genius of our people, to flourish in thousands and thousands of startups. if you are not investing in israel -- anyone here not investing in israel? [laughter] invest in israel! you should. david: you were the first israeli prime minister born in israel, but moved to the united states when you are eight years old. is that right?
pm netanyahu: i came for a year. david: you came for a year, and you didn't like it and went back? pm netanyahu: i was eight years old. [laughter] i was an independent kid, but not that independent. [laughter] david: you came back to the united states as a teenager? pm netanyahu: yeah. david: you went to m.i.t. and majored in architecture. did you want to be an architect? pm netanyahu: at the time, i did. i went to undergraduate school and got an undergraduate degree in architecture. i basically did four years in two years, so after two years i got my undergraduate degree, and then i decided i would go to the sloan school and got my masters degree, an mba essentially. david: and then you went to bcg? pm netanyahu: yeah. david: alright, so you are in the business career. you are in a great firm, bcg. what propelled you to get out of that, possibly getting into private equity, and going into something else? pm netanyahu: what? [laughter] david: why did you abandon that and go back to israel? what happened? pm netanyahu: man's greatest calling. david: private equity, yes.
pm netanyahu: i was derailed. [laughter] i was derailed into a lesser direction. what changed my life was that about a month after i got into bcg, my brother fell at leading the rescue for entebbe. david: this is your oldest brother in entebbe. he was the only israeli soldier that was killed then. that was july 4, 1976, right? pm netanyahu: right. david: so you decided to go back and honor him in some way? pm netanyahu: yoni's death steered me ultimately into politics in an unintended way, really. but the short time that i spent at bcg is the place where i really understood the fundamentals of competition and competitive advantage. once you understand that, it was like a secret that was shared. i had the opportunity to see the competitive -- question of competition across industries and across countries.
and, i understood that you have to let the private sector, earn, compete, succeed, and fail. that is the only way that economies grow. that is where i got there. david: so you flew back to israel and got involved in politics and obviously rose up and became the youngest prime minister in israel's history. i think at 47 or so, and now you have been the longest serving prime minister since david ben-gurion. he was the only one to serve longer than you. is this job as exciting as you once thought? what is the pleasure of being pro-minister? pm netanyahu: oh, investigations. [laughter] [applause] david: has the job changed in 10 years? pm netanyahu: israel is a tough country to govern, in a tough neighborhood. but, i think the position you have to understand is that you cannot gripe about
the political system -- which i tried to change, by the way. but, you just do what you can. and the important thing is, if you want reforms, do them right after you are elected. that is rule number one. that is what i did. i have been elected four times. that is a lot of reforms. just do them right after you are elected. rush them through. and don't do them one by one, you know? when i came into the finance ministry, i was prime minister, lost, came back as finance minister, and then prime minister. and when i was finance minister, they told me, don't take this job, you will never be prime minister, they said. i said, well, then why is it that i want to be prime minister? one of the two reasons is that i want to reform the israeli economy. that's why i wanted to be there in the first place. if we achieve that, that is good enough, and that is what i ended up doing.
but when i came into the finance ministry, this is a tip for any of you wanting to be israeli finance minister, something i don't recommend. [laughter] but, when i came in, i said we are going to do this, we are going to do that. we are going to make all these reforms. and the staff at the finance ministry were very able people, they said, mr. minister, you can't do that. i said, why not? they said, because this reform will get you a three-month general strike, and that reform will get you a three-month general strike. and so on, and so on. i said, can you say that again? every one of these reforms will get you a three-month general strike. i said good, we can maximize the number of reforms per strike, and that is exactly what we did. we just did them in batches, and as a result israel grew after that, 5%, and since then it has grown between 4% and 5% per year. and i think in a couple of years we are going to catch up to
japan in per capita income. did you know that? you should invest in israel. [laughter] david: any specific tips you have? pm netanyahu: somebody asked me that. right after i came into the finance ministry, and we were in a big crisis because of the intifada, we had violence, and the nasdaq had burst. obviously it hurt. our economy was shrinking. this was 2003. i certainly thought that was the contributing factor, but i did not think it was the factor, because i thought it was the bureaucratic, centralized control of our economy that was preventing growth. so, i met with a group of investors, and this was about two weeks into my term as finance minister. and they said, that is all i can get, about six or seven investors. first in jerusalem and then in london. and they said, why
should we invest here? everything is shrinking, collapsing. i said, well, here is what i am going to do. and i described to them all of these reforms -- cutting the public sector, reducing tax rates, reducing the hurdles of the competition, and so on, everything. reforming welfare, the law. and they hear this, and in about 10 minutes into my soliloquy, they said maybe this guy is meshugga enough, crazy enough, to do this. and so they said, so if you really do this, what should we invest in? and i said to them, i am not a stockbroker, but if you want a tip, i will give you a tip. invest in anything. invest in a parking space in tel aviv. it's going to be worth a lot more. david: president trump, he
♪ david: how would you compare president trump with president obama with president clinton? you served as prime minister when all three of them were presidents. pm netanyahu: actually, contrary to the general press feed, buzzfeed -- i actually had very good personal relations with all three of them. but i had disagreements with
them, agreements and disagreements. for example, with president obama, we signed a m.o.u., memorandum of understanding for a military aid package to israel, which i deeply appreciated. it was great. it follows the ten-year package we signed with earlier president george w. bush. people probably don't know that, but it is important. but i had disagreements. the important thing was i could -- we were quite clear about that, i didn't hide it. i would say with president trump that i have fewer disagreements. in fact, i have not found yet any disagreements. and i don't expect there to be. david: with president trump, he obviously is skeptical about the iranian agreement. i think it is fair to say you are skeptical about that agreement. pm netanyahu: now you are a diplomat. [laughter] david: so, if he says the united states is going to pull out of that agreement, would you be pleased or would you be upset if he says we
are going to stay in? pm netanyahu: well, he asked me that question. i said, look, you either fully fix this deal or you fully nix it, because right now it is a highway with international approval for iran to get to massive, unlimited enrichment within a few years. what the the deal says is that the constraints and limitations on iran's nuclear program are automatically removed by a change of date. i argued before the u.s. congress that those constraints should be lifted only by a change of behavior, and iran, since the deal was signed, has been like a tiger unleashed from its cage. the deal emboldened it, enriched it, and instead of joining the community of nations, they are just devouring the nations, one after the other. iran, iraq, syria, lebanon, gaza, yemen, the straits.
i mean, the whole thing is going in a very, very bad direction and you should not enable this aggressive regime out to conquer the middle east, out to impose its shiite version of militant islam on the world, to have nuclear weapons. you think you have a problem with one country now in asia, i am telling you that is a family business, peculiar one, but a family business. this is different. this is, as kissinger said, this is ideology, it is a cause, not a country, and the cause is a bad one. we are the small satan. you are the great satan. you don't want the preeminent terrorist-sponsoring regime in the world to have nuclear weapons and the means to deliver them to washington, d.c. don't let it happen. david: president trump agreed to move the american embassy to jerusalem. many presidents have promised that, and presidential candidates have promised that
for over 40 years. this is the first president who has taken steps to do that. did you urge him to do this, or did he do it more or less on his own, and did you talk about the complications of that when you met with him? pm netanyahu: i spoke to him and every president, and urged every president to move the u.s. embassy to jerusalem. the difference is, they all said they would do it. he did it. he did ask me one time what did i think, whether there would be outbreaks of violence and massive collapse. i said, look, i can't tell you with 100% certainty, but that is not what i am seeing, and i don't think it is going to happen, but if it does, we are willing to shoulder the risk, and it didn't happen. david: one of the debates has been whether israel should be a one state solution, or two state solution, to the palestinian issue. if you have a one state solution, it is said by some people, because of demographics, that israel wouldn't be necessarily a democracy or
would be a jewish state. so, do you favor a one state solution or two state solution? pm netanyahu: well, i think most israelis would favor a situation where we could separate from the palestinians. i want a solution where they have all the powers they need to govern themselves. but none of the powers that would threaten us. what that means is whatever the solution is, the area west of the jordan, that includes the palestinian areas, would be militarily under israel. the security, the overriding security responsibility would be israel. i will give you an example. how many of you have been to israel? that's it? that is half. [laughter] pm netanyahu: maybe a little more. the other half will come. when you come in, and you fly in, you go to ben gurion airport. you cross the mediterranean and land in ben gurion airport. that will take you about 45 seconds. ben gurion airport is about 10 seconds
away from the west bank, so obviously, if you say, well, israel's airspace stops there at ben gurion airport, you know, we are dead. so we need bigger airspace. that is going to go across the palestinian area. the same thing is true, what is above ground in the air is on the ground too. as it turns out, because of tunnels, below the ground too. israel must have the overriding security responsibility for the area west of the jordan river. does that comport with full sovereignty? i don't know. it is what we need to live. in this area of the middle east full of failed states, states in collapse, it is very important that israel be the power responsible for security, because otherwise everyone collapses, the palestinians collapse. every area we left militarily, militant islam came in. we left lebanon, iran came in with hezbollah. we left gaza, iran came in with
hamas. we leave the west bank militarily, or most of it, as people stipulate with various peace plans, you'll have either hamas coming in, that is iran, or you'll have isis coming in. this is a catastrophe for peace. so the answer to your question is most people would agree to an arrangement of the kind you are talking about if they thought the palestinians wanted a state next to israel, but they are convinced more and more that they want a state instead of israel, and that is not a real peace. david: you see any prospect in the next year or two of a deal getting done? pm netanyahu: i think there is something -- there is a new hope on the horizon that i have never seen in my lifetime and it is not related to the palestinians. it is related to the arab world. because of the growing danger of iran, more and more, i would say virtually all the arab countries, no longer see israel as their
enemy, but as their vital ally in countering the threat of militant islam. the arabs see that we are united in stopping the greatest radical islamic threat of all, which is iran. so out of this curse comes a blessing. the blessing is this extraordinary relationship between us, and i think ultimately we might be able to shift the ground. i don't think it is readily available right now, but i don't discount it could happen. we used to say if we make peace with palestinians we will break out and normalize our relations with the arab world. i think it actually may work more the other way around. we normalize relations with the arab world to help change the perception of palestinians. david: so, the relationship that israel has with the sunni-arab world is better than you have ever seen it before? is that fair? pm netanyahu: unbelievable. and we work on it. david: so, let me talk about anti-semitism. there seems to be anti-semitism is rising in
europe, and some extent in the united states we see some evidence. does that concern you about the rise of anti-semitism? what do you think people can do about it? pm netanyahu: it is a chronic disease. it is a problem that has been around a long time. as a theory, probably 2,500 years ago. yes, it concerns me. i think on campuses we have work to do. the reason anti-semitism swept away a third of the jewish people in the holocaust is because there was no jewish state. now we have a jewish state. the founders of modern zionism, especially theodor herzl, they did not say necessarily that anti-semitism would disappear when the jews would have a state of their own. they said that the jews would be able to fight back. that is the great difference. we are able to resist and push back. david: there are investigations of you now. it seems to be a popular sport. pm netanyahu: i can't say that i like it. but i am very satisfied by what i
♪ david: now, mr. prime minister, as we alluded to earlier, there are investigations now, in israel it seems to be a popular sport, a lot going on there. what can you say about it, and is it detracting your ability to serve as prime minister? pm netanyahu: i can't say that i like it. i can say it doesn't detract because i work my 16-hour days and i just do it. i am absolutely committed to defending israel, liberating its economy, and these twin pursuits in seeking what could lead to peace between our neighbors, and my hands are full and i am very satisfied with what i do, and the public apparently thinks that because you can see what the public says. david: some people in israel say that maybe you should maybe call for a so-called snap election and have an election and you would be reelected. pm netanyahu: you too, david? david: well, do you have a view on a snap election that you can say?
pm netanyahu: i am talking to, on and off, my coalition partners. what i want is to complete the term of this government, which is november 19, and if all parties of this coalition agree, that's what we do. if not, we will go to elections. i hope they will agree. we will see. david: what would you like to see as your ultimate legacy? pm netanyahu: defender of israel, liberator of its economy. david: is the job as enjoyable as it was before? pm netanyahu: yes, because we are doing things, and a very deliberate strategy is to develop this modern, free market, high-tech economy, leverage that into strong military intelligence and a strong military. and since countries need both intelligence against terrorism and other
security questions and they all need civilian technology, marry the two and create diplomatic flourishing. we now have one at 60 countries -- we now have 160 countries with whom we have diplomatic relations. when i came to this town to be number two in the embassy, it must've been half of that. the countries that are left out are very few. you talk about isolating israel, the countries not with us are isolated. eric schmidt laughed when we said, how about the movement to boycott israel? boycott israel? i would be boycotting myself. israel is in the center of the meeting ground between big data, connectivity, and artificial intelligence. this allows us to revolutionize all industries, like agricultural. for example, we do now precision agriculture. do you know what that is? a drone flies in the sky that is connected to a database and has sensors on the ground and we
target the irrigation fertilization down to the individual plants. so you understand the productivity gains. it is wild. the change in agriculture. we have new industries, a car industry. we don't produce, compete, on chassis, engines. -- we't have the skill, don't have the scale, but since cars are becoming, 85% of the cars by you will be software. it is basically a computer on wheels. there we compete. now we have 500 startups just on that. israel is a mega-story for the new world of big data, artificial intelligence, and connectivity. if you are not in israel, you are falling behind. don't. come over. i will see you there. i will tell you. i will buy you a dinner if the economy is strong enough.
♪ francine: they are household names, some dating back centuries, but the company that owns them has not reached the legal drinking age. this year, 2018, diageo turns 21. with over 200 brands sold in 180 countries, it is the biggest single producer of spirits in the world. driving the business forward is a man who has been with the company since its inception. today on "leaders with lacqua," we meet ivan menezes, chief executive of diageo. ivan menezes, thank you for
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