I hope you had an enjoyable New Year’s Eve and doubtless, like me, you’re looking forward to only the best of times ahead in 2011. Let’s hope the next 12 months prove to be safe, healthy and enjoyable for us all.

Here in the Middle East you can never be quite sure what’s around the corner, but here are my thoughts on what might well happen in Israel between now and the end of December. Let’s start at the very beginning, with politics, for, as Julie Andrews famously said to those six little snipes dressed in gingham curtain fabric, “That’s a very good place to start.”

Will the present coalition remain in power for another 12 months? If I was a betting man, (and I’m sure many of you know that I am), I would say that it is most unlikely. Odds against, as they say in the gaming trade. Bibi, (Binyamin Netanyahu to those outside of the ‘Promised Land’), will do just about anything to cling on to the vestiges of power. He really does like the letters PM in front of his name. As I noted a number of times over the last year, he is prepared to cut a deal with just about any party, (no matter how diametrically opposed to his own ideology), just to stay in the top job. He makes Britain’s Lib Dem leader Nick Clegg look principled!

The cracks that were there in Bibi’s government last January are now gaping chasms; his bitter rivalry and lack of respect for his Foreign Minister Avigdor Lieberman is a standing joke in Jerusalem – (mind you, so is Lieberman); Bibi’s cow-towing to the Sephardi religious party Shas that has seen him divert funds to their followers in order to maintain their vote alongside him in Cabinet cannot go unchecked much longer; his crystal clear problems in trying to forge a political alliance with the Labour party and its leader Ehud Barak must come to a head some time soon. All these tinder box relationships look set to burst into flames at any point in 2011 and force the dissolution of the current government.

I fully expect Izhak ‘Bougy’ Herzog to challenge Ehud Barak for leadership of the Labour party. From a distinguished political family, Herzog is seen by some as appealing to the electorate as a genuine politician of strong convictions, but others see him as being somewhat dull and frankly, a bit of a bore. The latter may be true, but I suspect he will command a great deal of grass roots support from Labour activists and could oust the generally unpopular Barak before the year is out.

I’m afraid that the signs are ominous that the power broker that is Shas could also see a change of leadership in the next few months, with the under-fire Interior Minister Eli Yishai, (the man held directly responsible by many for the disastrous local response to the horrific Carmel fires), being forced out in favour of rehabilitated jailbird Arye Deri – the man who was ‘sent down’ for three years for corruption after pocketing $155,000 in bribes. He eventually served just 22 months and was released early “for good behaviour” – which could be interpreted as meaning that he managed to resist the temptation to dangle his sticky fingers into the prison tuck shop petty cash! Deri seems to be the chief beneficiary of the waning confidence in Yishai and might well return to the top table, a comeback that will doubtless delight his old pal ‘Bibi’ Netanyahu.

What about the Middle East conflict? Well here’s a racing certainty; it won’t be resolved in 2011, or for a very long time afterwards, if ever.  Rumours abound of Hezbollah spoiling for a fight sometime in the summer, especially if it distracts attention from the long awaited report that is due to implicate the South Lebanon-based terrorist group in the assassination of former Lebanese Prime Minister Rafiq Hariri. The publication of the committee’s findings have been continually delayed, almost certainly as a result of the potentially devastating blow it would deal to Hizbollah and their fragile arrangement with the governing parties in Lebanon. A nice bit of ‘argee-bargee’ on the northern border with Israel would quickly redirect everybody’s attentions away from the findings of the report and concentrate minds on the external enemy, rather than the far more insidious threat posed by the militia to Lebanese democracy.

Despite their propaganda over the last few weeks that intimated that they are looking for a way to calm tensions on their border, Hamas are also spoiling for a fight in Gaza having allowed a significant number of missiles to be launched into southern Israel since the start of December. They’ve taken a leaf out of the Sinn Fein book of the 1980’s and ‘90’s, publicly condemning such acts and distancing themselves from the missile firers and potential bombers, whilst in private almost certainly continuing to show the green light to the militias, just as Sinn Fein did to the IRA. ‘Oh it’s nothing to do with us, folks, we’re a legitimate political party with no connection to the military men’. Yeah, right.  There is a sense in some quarters here that patience within the Israeli military is running thin.  I fear another flare up on the Gaza border that will doubtless be reported as unnecessary Israeli aggression, rarely considering the misery that has rained down on residents of towns like Sderot for much of the last eight years.

The Palestinian Authority in the West Bank meanwhile has supposedly uncovered a planned coup d’etat. There have been numerous rumblings of discontent from Ramallah of late, allegations of inherent corruption amongst the PA leaders continually abound, and all this despite the local economy doing noticeably well and living standards rising rapidly. All these ‘distractions’ and ‘local difficulties’ will make it very unlikely that any agreement, (no matter how basic), is reached over the next 12 months between Mahmoud Abbas and Netanyahu.

I also reckon that President Hosni Mubarak of Egypt is on something of a ‘sticky wicket’ in that his health is seemingly deteriorating pretty fast. His grip on the former Israeli enemy, but now long-time partner in peace, has been so strong and totalitarian since he inherited the job from the assassinated Anwar Sadat in 1981, that his sudden departure from the scene could very easily destabilize the whole region and give the Islamists in Egypt the impetus to bid for power. It could all get very messy indeed.

Other predictions. Well, there’s going to be a very serious water crisis with the current Israeli winter falling far short of the amounts of rain needed to go even a small way to replenishing rapidly diminishing supplies. This dry winter, following one of the hottest summers on record, is of huge concern over here and could have a serious impact on food prices, especially those of fruit and vegetables over the next few months.

As mentioned in a previous blog, I really believe the Israeli housing market bubble will start to wobble, if not burst, by mid-summer. People are beginning to come to their senses and realize that the prices being extracted for real estate here, (some of which have risen 50% in the last three years), are simply unsustainable. The Bank of Israel has already raised interest rates a couple of times in the last few months in a bid to put a lid on price rises and chairman Stanley Fischer has made it clear he will continue to raise rates until the market cools down. If you are the owner of a property in Israel I believe that this is the time to sell. And I’m not just saying that. I’m so convinced that the market is at, or is close its peak, that my home is going on the market right now. Take the money and run boys – while you can.

The further discovery of massive gas fields in Israeli waters is one potentially hugely favourable economic feature of the coming year and beyond. If media reports are accurate, the Tamar and Leviathan fields will be the second and third biggest in the world, making North Sea gas for example, look like, well, a drop in the ocean. The only problem is that the private investors who discovered the gas don’t want to pay the appropriate taxes to the government, so it might all end up in court and no one will benefit (except the lawyers), for a very long time.

A couple of other quickies, (so to speak). I can guarantee that Israel’s football team won’t qualify for any major tournament during the next year, or at any time soon. Too much in-fighting and too many moderate players is no recipe for success. But on a more positive note, I truly believe that Israel will achieve its first horse racing success in England in 2011.  As racing manager to Israel’s Rayzner Stud, whose horses Royal Torbo and Royal Tiger are in the care of the excellent English racehorse trainer George Baker, (now cosily ensconced in the historic Whitsbury training establishment in Hampshire,) I can all but assure you that Royal Torbo, in particular, will get his head in front – at last! 

Indeed, his head was in front at the final fence at Towcester a few weeks ago when, (having lead all the way through the two mile contest), he only had to jump the last to win. You guessed it. He snatched defeat from the jaws of victory by blundering and unseating his rider! Could that be seen as a metaphor for Israel itself; so capable, yet invariably managing to blunder away golden opportunities! Let’s hope not. 2011 will be our year!!