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Borrowing oil money to Israel

With increasing military spending, Israel needs to borrow money abroad.


By Tarjei Leer-Salvesen

[bonds] In 2005, Norway doubled its lending of oil money to Israel. In this way, the country can finance, among other things, military rearmament and the construction of the disputed security wall around the Palestinian territories. NOK 184,5 million was the estimated value of the Norwegian "Israel AID" bonds at the beginning of the year, according to the bond portfolio that Norges Bank published this week together with the annual report for the Government Pension Fund – Global, better known as the Oil Fund.

This is more than twice as much as the previous year, when the stock was NOK 90 million.

A large part of the investments are made in other countries' government debt, and in this way Norwegian oil money has found its way to the Israeli state.

"Israel AID" is the talking name of the securities that Israel issues to raise much-needed capital. The country has enormous expenses for the time being. The wall alone is conservatively estimated to cost more than NOK 15 billion.

Last year, the same year that a red-green government took office and SV Finance Minister Kristin Halvorsen called for a boycott of Israel, the state fund bought Israeli shares for the first time. Norges Bank invested a total of just under NOK 80 million in Hapoalim bank, the IT company Eblaze and the pharmaceutical company Teva. This is how parts of the Norwegian pension money are placed on the Tel Aviv Stock Exchange.

In addition to Israeli government bonds, the fund has also invested $ 120 million in bonds issued by Israel Electric Corporation. This company provides electrical infrastructure throughout Israel, including to illegal Israeli settlements in the West Bank.

In the past, the fund has drawn its investments from a number of parts manufacturers for nuclear weapons, cluster bombs and landmines. The Kerr-McGee company had to move out of the portfolio on the grounds that the company had oil operations in Western Sahara, which is occupied by Morocco.

Investments in Israel, on the other hand, are not covered by the ethical guidelines that form the basis of the work of the Ethical Council, which recommends withdrawals from companies in the fund's portfolio. Whether the companies operating in Israel's occupation of Palestinian territories should be subject to the same ethical guidelines has not been discussed in the Ethical Council.

When asked by Ny Tid whether the increased investment in Israeli government debt is a desired development from political leadership, State Secretary Roger Sandum (SV) in the Ministry of Finance answers:

- Norges Bank is set to manage the pension fund according to given limits. So long

business is conducted within this framework, it is not relevant for the ministry to provide guidelines for individual investments made by the manager.

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