The Magazine

The Med's Best-Kept Secret

Had a Thai herbal massage in Israel lately?

Jul 27, 2009, Vol. 14, No. 42 • By WILLY STERN
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Last year, Arroyo accepted a multimillion-dollar offer to play for Israel's best basketball team, Maccabi Tel Aviv, when he could have been suiting up against LeBron and Kobe. Earlier in the year, he told a visiting reporter, "The restaurants [in Israel] are fantastic. There is this one particular Italian restaurant my wife really likes." (Much as he likes Tel Aviv, Arroyo will probably be moving on during the offseason as he and the Maccabi coach didn't mesh.)

Chloelys Restaurant in Tel Aviv is typical of the culinary boom Arroyo's wife so admires. The restaurant's wood flooring is imported from Brazil, its bricks from Belgium, and chef Victor Gloger keeps 7,000 bottles of wine in his cellar. The businessman's special (gilt-head bream fillet on grape leaves with Bulgarian cheese filling) runs $32. On a Monday, the place was jam-packed with wheeler-dealers in open-necked shirts, staid Brooks Brothers-clad business types, college students apparently fortified with Daddy's credit card, and the wife of the Belgian ambassador.

As religious Jews congregate in and around Jerusalem, hip Israelis flock to Tel Aviv. They joke that it's "the new city that never sleeps." Just ask Baltimore-born black rapper Joel Covington, a self-professed Jew--go figure--who performs under the stage name Rebel Sun: "I can take you out on Monday night at 8 P.M., bring you home at 8 A.M., and you'll never see a dull moment. If you want to party in Tel Aviv, just bring a toothbrush and an extra pair of underwear--you never know what you'll find."

One thing that Tel Aviv residents can't find is a cheap place to live. Forget about popping over to Israel to find a bargain apartment. There aren't any. A 3-bedroom flat in a classy high-rise like the Alrov Tower in Tel Aviv will set you back $2 million. What's the asking price for a 1,200-square-foot villa, with pool, on nearby Rehov David Smilansky--roughly akin to Bethesda, but with a shorter commute downtown? Try $4 million. The upside, of course: Buy the villa, and you can walk to the Gucci and Armani shops on nearby Kikar Hamedina Square. Israeli residential real estate prices are off a modest 5-10 percent since the global downturn hit, reports Adina Haham, CEO of Anglo-Saxon Real Estate in Tel Aviv. And prices are already inching back up.

High-tech millionaires own a lot of these homes. "The Israelis you find on the slopes of Aspen, those are mostly high-tech guys," explains Bar-Ilan University's Zilberfarb. How has Israel managed to do so well in high-tech? Every Israeli high-tech player can recite the national data like a bleacher bum spitting out baseball statistics:

n Israel produces more science papers per capita than any other country.

n Israel lags behind only the United States in number of companies listed on NASDAQ.

n Twenty-four percent of Israel's workforce has a university degree; only the United States and Holland have a higher number.

n Israel leads the world in scientists and technicians per capita.

Why has this produced a tech boom? There are as many theories as there are Israelis, it seems, but the most cogent is put forward by Haim Harari, retired president of the Weizmann Institute of Science:

If the science Olympics were held in Europe, we'd be second to none. I claim our success has to do with the national character of Israelis. The Israeli--or Jewish--character--is ambitious, chaotic, undisciplined, unorganized (we don't have a pope), often brilliant, and we think we know better than everybody else all the answers. These are the exact same skills you need in a high-tech start-up, but, of course, we have none of the skills to run a big company.

An alternative theory, espoused by many serious Israelis, is that the prototypical pushy Jewish mother is driving the high-tech boom. Study hard! Make something of your life!

Israeli technology has certainly been a big part of the Internet age. The cell phone? Developed in Israel. Ditto for most of the Windows NT operating system and for voice mail technology. Pentium MMX Chip technology? Designed in Israel. AOL Instant Messenger? Developed in Israel. The list goes on. Firewall security software originated in Israel. The latest breakthrough is the "PillCam," a video camera that can be swallowed and aids physicians in diagnosing intestinal cancer.

"There was a suicide bomber in this very café during the Intifada," says Jonathan Medved over thick coffee at Caffit Café in Jerusalem. He's a transplanted American, prone to loud Hawaiian shirts, and one of Israel's leading venture capitalists. "They managed to get him over there, across the street, and he didn't detonate. That's how we live. And here we are today. Improvisation is our national plan. We are a nation of risk takers." Successful risk takers, by and large, and not just in high-tech.

Take the case of Eli Ben-Zaken. Twenty years ago, he was a smalltime farmer in charge of a chicken shed. He dabbled in wine, then risked all. Today, he's the proud owner of Domaine du Castel, a winery nestled on a gorgeous mountaintop in the rolling Judean Hills. His wine is sold from Hong Kong to Brazil. Walk into Zachys in Scarsdale and a bottle of his 2006 Grand Vin Kosher will set you back $89.99. "I always say, thank God for the snobs," says the understated Ben-Zaken. "They started drinking wine for the wrong reasons, but stayed because they learned to appreciate good wine."

Some Israelis point to the country's unresolved tensions with its Arab neighbors as a factor in its success. "Conflict is also a very strong source of artistic creation," reports Hanan Pomagrin, a well-regarded Israeli architect. "An area in conflict is not always negative; it keeps people alert. I'm not saying that I would not want to see resolution to this conflict, but it also contributes to the huge energy felt when visiting Israel."

That self-same energy has pushed Israelis of all stripes onto the world stage. One is Bar Rafaeli, the shapely Israeli model who appeared on the cover of the latest Sports Illustrated swimsuit issue and who's been romantically linked to Leonardo DiCaprio. Another is Michael Arad, a former soldier in the elite Golani Brigade; in 2004, he won the design competition for the World Trade Center Memorial. And there's Ronen Chen, the Tel Aviv-based designer, whose high-end women's clothes at prices secretaries can afford are found in chic boutiques all around the United States. Then there's the Batsheva Dance Company, an Israeli cultural icon that performs to packed audiences around the globe. And you can't wander into the faculty lounge at an Ivy League school without bumping into a transplanted Israeli.

But Israelis love their home, and with good reason. "You try to find someplace in Tuscany that's as nice as the Galilee," says the Bank of Israel's Eckstein. Wake up in Tel Aviv, and you can be skiing down the slopes at Mt. Hermon after a lovely, if winding, three-hour drive. That's a far sight easier than the haul from the Upper West Side to Stowe. Finish the workday in Jerusalem, and you can be scuba diving in Eilat, on the Red Sea, after a quick flight.

Of course, not all Israelis can afford weekend getaways. There are sordid slums in the country. Among those still struggling mightily: Palestinians and the recent waves of immigrants from Russia and Ethiopia. Even successful Israelis have their issues. Forget about a service industry; Israelis proudly jest that their nation produced the cell phone but not a single decent waiter. It's a nation where rudeness, reckless driving, cheating on your tax returns, and cutting in line are national art forms.

Yet none of this is evident at the beautiful spa at Mizpe Hayamim. The resort may have no bigger fan than Dita Kohl-Roman, who's been vacationing there for more than two decades--since her mother-in-law first took her. "My daughter--a student in physics and Latin at Hebrew University--continues the tradition today," says Kohl-Roman, a director of resource development at Kishorit, a community for those with special needs. "She goes with her boyfriend!"

Anita Blum, the ever-gracious spa owner, is vigilant about the confidentiality of her guests, but her employees can't help but boast about two of the many goats at Blum's magnificent organic farm. One is named "Sharon." The other is named "Stone." Yes, it seems the other Israel--the land not of terrorists but of milk and honey and goats--may finally be being discovered.

Willy Stern, a Nashville-based writer, has reported from six continents.