Is Israel a rich country

70 years of the State of Israel : Economic boom without raw materials

On Route 90 in front of the seaside resort of En Bokek at the southwest end of the Dead Sea, about 90 minutes by car from Jerusalem, workers measure, level and concrete roads and pedestrian paths. It's busy. And not just here. There is construction going on all over the country. Israel is growing. 70 years after the founding of the state and unaffected by the current conflict with Syria and Iran, the economy of the Jewish state is prospering.

The country has no natural resources

The initial situation was probably the most difficult in the history of any economy: on the afternoon of May 14, 1948, the politician Ben Gurion proclaimed the state of Israel in the city museum of Tel Aviv, and only a few hours later the country was joined by Egypt, Jordan, Lebanon, Iraq and Syria attacked. Israel is at war right after its "birth". The country that has no natural resources, neither oil nor gas, iron, gold, coal, wood or water, has to put its financial resources into its defense rather than into building its economy. Agriculture is only gradually developing - Israel's agricultural experts have developed methods of increasing yields in arid areas that are used worldwide - handicrafts, trade and tourism. With great success.

Today Israel is economically strong. The country has grown faster than any other industrialized nation since the beginning of this century and has a national debt of less than 60 percent of the gross domestic product, which is below the level of Germany and the USA, for example. Inflation is only 0.4 percent and unemployment is four percent. The shekel is stronger than the euro and the dollar. At $ 38,000, per capita income already exceeds that of Italy, and it should soon reach that of Great Britain, France and Japan. For 2018, the Bank of Israel expects economic growth of 3.3 percent (2017: 3.1 percent) and, as in the previous year, an export volume of over 100 billion dollars.

The USA is the largest trading partner

The USA is Israel's largest trading partner. The German share of Israeli imports of goods is around seven percent. The largest items in the 4.5 billion euro trade last year were machines as well as motor vehicles and their parts; conversely, goods worth around two billion euros came from Israel to Germany, in particular chemical products as well as IT, electrical and optical products. For this year, the Israeli central bank expects an increase in imports of around eight percent, but also significantly more exports. The economists of the bank see the development of natural gas reserves in the Mediterranean Sea and the construction of houses as economic drivers.

In addition to 1,100 new properties in the West Bank, which the government has just decided to build despite global criticism, new buildings are being built on almost every corner, especially in the two metropolises of Jerusalem and Tel Aviv, and older ones are being renovated. "We have an enormous backlog of renovations," says Assaf Cohen, foreman of an apartment project on Geula Street in Tel Aviv. The two and a half meter long promenade of the tourist metropolis, which has been extensively rebuilt for two years, begins 100 meters further. The 150 million shekel project (36 million euros) aims to bring the city even closer to the beach. Architect Mayslits Kassif says: "There used to be walls, ramps and stairs that separated the two areas, now everything is open."

The tech scene is booming

The tech scene is one of the particularly innovative sectors of the Israeli economy: there are 5400 companies in Israel for a population of 8.4 million. Many of them cooperate with start-ups in Berlin and Hamburg. But there is also a lot going on in the life science industry. Israel’s medical and biotechnology companies play a leading role worldwide. The rapid growth in this area is impressive: While there were only around 180 companies in this field in 1995, there are already more than 1000 today. And around 80 new start-ups are added every year. More than half of Israel's life science companies work in the medical technology sector. The focus here is on therapeutic aids, such as technology for vascular support (stents) as well as diagnostic and imaging processes.

The basis are the numerous research and development centers of large international corporations, such as Philips and General Electric Healthcare, and domestic companies such as Given Imaging or Medinol. Given Imaging is the world market leader in capsule endoscopy and has the Endoscopic examinations made more patient-friendly and cheaper. The high innovative strength of the small country is reflected in the number of patents: Worldwide, Israel holds the most examined property rights per capita in the field of medical technology.

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