"Israel's economy leaps upward despite unrest; Growth in 2006 at 5.1 percent"
THE WASHINGTON TIMES
Abraham Rabinovich
THE WASHINGTON TIMES
Abraham Rabinovich
Feb 26 2007
2006 marked the third straight year of economic growth above 5 percent for Israel, even despite conflict with Lebanese Hezbollah and Palestinian militants. The cost of the war was only reported to be 0.3 percent of the Israeli GDP, and not the previously estimated 1 percent, making the growth rate for 2006 5.1 percent. According to the article, "The three consecutive years of strong growth have been accompanied by high levels of foreign investment that has been relatively unaffected by violence in the Palestinian territories and intermittent attacks on Israelis." Prime Minister Ehud Olmert declared in a speech in December, only four months after the war with Lebanon, that Israel's economy had never been healthier and that the small nation's exports exceeded their imports by billions of dollars for the first time.
2006 marked the third straight year of economic growth above 5 percent for Israel, even despite conflict with Lebanese Hezbollah and Palestinian militants. The cost of the war was only reported to be 0.3 percent of the Israeli GDP, and not the previously estimated 1 percent, making the growth rate for 2006 5.1 percent. According to the article, "The three consecutive years of strong growth have been accompanied by high levels of foreign investment that has been relatively unaffected by violence in the Palestinian territories and intermittent attacks on Israelis." Prime Minister Ehud Olmert declared in a speech in December, only four months after the war with Lebanon, that Israel's economy had never been healthier and that the small nation's exports exceeded their imports by billions of dollars for the first time.
"This is the first year in the history of the state in which exports exceed imports by billions of dollars," he said.
Additionally, The Economist has ranked Israel among the five fastest-growing emerging markets in the world, up 12 places from 48th largest economy in the early '80s to 36th largest from 2001-05, during which period it survived two Palestinian intifadas and two wars with lebanon, the Gulf war and numerous attacks from Iraqi missiles.
Additionally, The Economist has ranked Israel among the five fastest-growing emerging markets in the world, up 12 places from 48th largest economy in the early '80s to 36th largest from 2001-05, during which period it survived two Palestinian intifadas and two wars with lebanon, the Gulf war and numerous attacks from Iraqi missiles.
Palestinians intifadas and two wars in Lebanon in addition to being on the fringe of the 1991 Gulf War, in which it was hit by dozens of Iraqi missiles. S&P updated Israel's credit rating this month from "stable" to "positive", reflecting the "improved resilience of Israel's public finances and economy to geopolitical shocks after a three-year period of fiscal consolidation and strong economic growth."
On the negative side of things, the Histadrut, the Israeli labor federation, has called for a broad general strike this week which will likely effect government offices, and even public transportation, airports and schools. The strike is a result of the government's failure to pay thousands of municipal employees because of issues with the transfer of funds between the national government and municipalities.
Israel's GDP is significantly reduced by the vast amount of money it spends on its military forces, but a good amount of Israel's money comes from foreign investment--with the country attracting a total of $20 billion last year alone, most of which goes into the technology field, in which Israel has always excelled, with many of Israel's technological advancements being spinnoffs and innovations from the military division. The Tel Aviv stock market, the article says, has gone up about 25 percent since the war, even with the threat of more fighting with Hezbollah, Syria and possibly Iran. The economy's buoyancy can be explained by "free-market policies, budgetary restraint, tax cuts, privitization and the opening of the market to the free movement of goods, services and capital. Inflation is near zero, and reserves stand at $28 billion."
On the negative side of things, the Histadrut, the Israeli labor federation, has called for a broad general strike this week which will likely effect government offices, and even public transportation, airports and schools. The strike is a result of the government's failure to pay thousands of municipal employees because of issues with the transfer of funds between the national government and municipalities.
Israel's GDP is significantly reduced by the vast amount of money it spends on its military forces, but a good amount of Israel's money comes from foreign investment--with the country attracting a total of $20 billion last year alone, most of which goes into the technology field, in which Israel has always excelled, with many of Israel's technological advancements being spinnoffs and innovations from the military division. The Tel Aviv stock market, the article says, has gone up about 25 percent since the war, even with the threat of more fighting with Hezbollah, Syria and possibly Iran. The economy's buoyancy can be explained by "free-market policies, budgetary restraint, tax cuts, privitization and the opening of the market to the free movement of goods, services and capital. Inflation is near zero, and reserves stand at $28 billion."
Nehemia Shtrasler, economics editor of the Ha'aretz newspaper, said the economy's buoyancy is explained by free-market policies, including budgetary restraint, tax cuts, privatization and the opening of the market to the free movement of goods, services and capital. Inflation is near zero, and reserves stand at $28 billion.
I think that Israel's economic growth just further proves the resiliency and strength of the country. The Israeli economy's growth over the past 5 years has been far greater than that of any western country, and especially that of any other country in the middle east. Their ability to sustain such a significant and well-trained and equipped army in addition to bearing the weight of a war and numerous attacks, and all the while still being able to grow economically shows the country's strength even more. A huge amount of this growth can be attributed to foreign investment and the tourism industry. Still though, Israel's strong economy proves its stability and gives weight to their side in the argument over their right to existence.
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