Why is Israel so rich and powerful, even in the midst of conflict? – Why is Israel so rich despite its frequent wars? It has become a source of funding for the country.
Why is Israel so rich and powerful, even in the midst of conflict?
The region has a long history of conflict. Israel was established on May 14, 1948, after the British withdrew from what is now the Palestinian territories.
As a country that is always susceptible to conflict, what do you think about Israel’s economic situation?
Israel is a Middle Eastern country, and since the 1970s, when Arab countries were still dependent on oil money, its industries, especially manufacturing, have been relatively well developed.
According to the official website of the Israeli Ministry of Foreign Affairs, the country’s industrial development is inseparable from the many professionals who left European countries to escape persecution at the outbreak of World War II.
Until the 1970s, Israel’s fastest-growing industries were fertilizers, pesticides, pharmaceuticals, chemicals, plastics, and heavy metals.
By 2008, there were already 384,000 workers in manufacturing, most of them skilled professionals.
With limited space, in 2008 Israel already had 11,000 factories producing $58 billion worth of products, half of which were exported to the rest of the world.
Outside of manufacturing, Israel’s agricultural sector is one of the most developed in the world, and its land is highly productive with advanced technology.
Israel is one of the world’s leading exporters of advanced agricultural equipment and livestock.
Israel is also a country where technology companies are active. In the 1980s, many people working in Silicon Valley moved to Israel.
Already living in Israel, they established research and development centers for American technology companies such as Microsoft, IBM, and Intel.
Also, in the 1990s, skilled engineers from the former Soviet Union immigrated to Israel, enriching the country with skilled workers.
The technology industry in Israel is growing at an annual rate of 8%. New companies are popping up in the technology sector like mushrooms in the rainy season.
As a result of this situation, Israel consistently ranks among the top ten countries in the world in research and development (R&D).
The technology sector, which previously accounted for only 37% of industrial output, increased to 58% in 1985, and again to 70% in 2006.
About 80 percent of technology products are exported abroad. The value of Israel’s technology product exports quadrupled from $3 billion in 1991 to $12.3 billion in 2000 and $29 billion in 2006.
It also receives significant financial support for research and technology development from other countries, including the United States, Canada, Italy, Austria, France, Ireland, the Netherlands, Spain, China, Turkey, India, and Germany.
With the presence of so many large companies in the technology sector, the Israeli government undoubtedly receives a large amount of revenue in the form of taxes, foreign currency earnings, or the absorption of large numbers of workers. This does not include the royalties that Israeli companies receive.
Israel’s economic freedom score is 73.8, making it the 26th freest economy in the 2021 Index. Its overall score has declined by 0.2 points, mainly due to its deteriorating financial situation.
Israel ranked second out of 14 countries in the MENA region, with an overall score above the regional and global averages.
This year, Israel’s economy maintained its position in most open categories. Since the index was first published in 1995, government spending has been an ongoing indicator of the obstacles to greater economic freedom.
Fiscal restraint, such as spending cuts, can go a long way in freeing up the private sector and encouraging private investment.
Impact of COVID-19: As of December 1, 2020, there will be 2,877 pandemic-related deaths in Israel, and the economy is expected to shrink by 5.9 percent this year.