“The emerging nations
and ‘third world countries’ should take the economy of
Israel as an example and attempt to emulate it.” |
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The Economic Miracle of Israel
What does it mean to American investors?
Israel is a very small country –
it is smaller by half than San Bernardino County in California. It would
sink in Lake Michigan without a trace. It has barely 8 million citizens.
It has been in existence for just 60 years. But it is an economic powerhouse.
What are the facts?
Steady Economic Growth. Ever since its
creation in 1948, Israel has been involved in bloody warfare virtually
without surcease. There were three or four “formal” wars,
each of which Israel’s enemies promised to be a “war of extermination.”
To use their favorite phrase, they vowed to “wipe Israel off the
map.” Fortunately, none of this came to pass. Despite its small
size and small population and being vulnerable from all sides, Israel
has prevailed in all those wars. And it has survived the several “intifadas”
imposed on it by the Palestinians. Despite that and despite gathering
in millions of refugees from all over the world and despite having over
one million Muslim Arab citizens, who do not serve in the military and
who are openly hostile to their country, Israel has developed into an
economic and industrial power that is admired in the world.
Impressive statistics can be cited. Here are just a few:
Israel’s gross domestic product (GDP) was over $170 billion in 2006.
That works out to a per-capita product of over $20,000. It compares favorably
with most long-established European countries and approaches that of the
United States. The United States is Israel’s most important trading
partner. In the most recent year for which reliable statistics are available,
two-way trade amounted to about $30 billion, representing a steady 10%
yearly increase over the last several years. The principal exports from
the United States include civilian aircraft, telecommunication equipment,
semiconductors, and medical equipment. The two countries signed a Free
Trade Agreement (FTA) in 1985, and an Agricultural Trade Agreement (ATA)
in 1996. Israel also has free-trade agreements with the E.U., Turkey,
Jordan, and Mexico. Other free trade agreements are in negotiation.
Israel’s main exports to the United States and the
world at large are polished diamonds, electronic communication equipment,
medical and scientific equipment, chemical products, agri-technology,
and textiles.
A World Leader in Many Fields. In contrast
to its Muslim enemies, who have virtually no indigenous industry, whose
people are largely illiterate, but who have been blessed with natural
riches through their almost limitless petroleum resources, Israel has
virtually no natural resources. Its principal resource is its people’s
brain power. Israel’s universities and technical schools are world-class,
most outstanding among them Hebrew University in Jerusalem and the Technion
in Haifa, which is considered to be on the same level as the Massachusetts
Institute of Technology.
The energy and resourcefulness that have enabled Israel
to absorb millions of immigrants and to convert a desolate land into one
of green fields and modern cities are also reflected in Israel’s
economic development. Israel is a modern industrial state whose output
encompasses some of the most advanced and sophisticated technology in
the world. Its industry is concentrated in high technology and high-added-value
products, based primarily on scientific and technological creativity and
innovation.
Israel is a world leader in medical devices and medical
electronics, military electronics, civilian and military aviation, agri-technology,
telecommunications, computerized graphics, cellular telephones, microchip
technology and voicemail technology, water technology and desalinization,
and many others. It has 31 desalinization plants, including the largest
in the world, located in Ashkalon. Warren Buffett, perhaps America’s
most astute investor has recently made a $4.5 billion investment in an
Israeli company. When asked why he chose Israel as his first investment
outside of the United States, he replied, “Some Americans came looking
for oil, so they didn’t stay in Israel. We came looking for brains,
so we stayed in Israel.” Scores of Israeli stocks are traded on
NASDAQ. Next to Canada, Israel is by far the most represented country
on that exchange.
Domestic tranquility, a western legal system, the full infrastructure
of transportation, communication and utilities, but primarily its educated
and motivated population make Israel attractive to foreign investors and
industry.
Virtually all major hi-tech U.S. companies have installations
in Israel, either manufacturing plants or research laboratories or both.
Such companies as IBM, Digital Equipment, Intel, National Semiconductor,
Motorola and many others have established plants in the industrial parks
mushrooming around the country’s academic institutions.
Israel’s economy is vibrant and growing, and offers
countless investment opportunities in industry, agriculture, real estate,
tourism, commerce, science and medical R&D, and much more. The opportunities
that abound for domestic and foreign investors are almost limitless. What
this small country has accomplished in just 60 years and against all odds
is truly amazing. The emerging nations and “third world countries”
should take the economy of Israel as an example and attempt to emulate
it.
This ad has been published and paid
for by
Facts and Logic About the Middle East
P.O. Box 590359
San Francisco, CA 94159
Gerardo Joffe, President
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