Main Sources Of Economic Growth Of Israel
If one were to point towards a true oasis in the sands — a true example of order growing out of chaos — whose economy practically grew from the ground up to not only survive but thrive, one would point to Israel. Surrounded by enemies on all sides and having survived (and won) dozens of wars and armed conflicts against both states militant groups, many of which are ongoing, it is a surprise to most onlookers that a nation-state that was born artificially just over 70 years ago in a historically hostile region is still going strong. And with dazzling districts like Silicon Wadi and Bursa (the Diamond Exchange District), it is easy to understand why it is called the “Start-Up Nation”.
While their astonishing growth and prosperity is often attributed to their close relations with the West — predominantly with the United States — there is a point where an (unofficial) satellite state can no longer reap the benefits of their benefactors before it becomes a burden: Israel outgrew its relationship as a Western puppet to instead join them in the ranks of the most highly developed states in the world and become a leading figure in technological development and education, their areas of expertise. These fields, along with their unique citizenship laws and handling of international affairs, have helped turn Israel into the state it is today.
Having a wide variety of exported products, as well as exporting locations, is crucial for the development and growth of a state’s economy, for diversification can protect a state from dependence on another, stronger state. Even though Israel was heavily dependent on Europe and the US for the first years after its creation (over 80% of their exports heading there in 1962), it has heavily diversified since then. Aside from its Arab neighbors, Israel has been trading rather evenly with most of the world’s largest economies for the last decade, with an increase in trade with economies in the Far East, such as China, Hong Kong, and India. The balance in loyal exporting partners — reaching near-perfect balance between North America, Europe, and Asia by 2016 — guarantees economic stability for the years to come.
Despite the everlasting tensions with the rest of the Middle East, Israel persevered. And while there are multiple Arab emirates who have experienced remarkable economic growth, becoming prosperous oases in the span of 20 years, the stability of these economies is based solely on luxury goods — with states like the UAE earning more than 50% of their exports by selling gold, jewels, and luxury cars. Israel, on the other hand, has also diversified its exports, varying from luxurious wants to crucial needs; from diamonds (which has grown incredibly over the years, from less than 2% in 1999 to nearly 25% as of 2017) to computers and circuits which, along with chemical products, have steadily held their economy up and show a great deal of promise in this digital age.
Their endeavors in international commerce notwithstanding, government investment into the fields of education, research, and technology have helped Israel’s GDP not only grow, but more than double since the turn of the century. A frontrunner for academics, Israel currently dedicates a whopping 4. 3% of its GDP on research and technology, the highest in the world. As for education — on which they also invest a large part of their GDP: 6% — Israel works ardently to ensure its people are ready to join the workforce. With compulsory school from kindergarten through high school and a world-renowned education system up to tertiary education, and 48. 1% of their adult population having completed tertiary education — third highest in the world — Israel holds loads of promise, not just for its internal economy, but for the world as a whole.
