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C.E.S. Project
C.E.S Project
Israel Economy
ByFL1 Fall Winter 07-09Robin Kapoor
ECONOMY OF ISRAEL
At a glance:
GDP (2006 est.):
$195 billion.
 
The country'sGDP(Purchasing power parity) in2006reached $195 billion according to theInternational Monetary Fundor $179 billion according to the World Bank. GDP per capita has been $31,767 according to theInternational Monetary Fundin 2007 or $26,200in 2006 according to the CIA World Fact book. $31,767 is on par with most WesternEuropean countries like France or Italy, while $26,200 is lower than most WesternEuropean countries exceptGreece,SpainandPortugalbut higher than all Eastern European countries and close to the average for theEuropean Union. The economy grew by 8% in the last quarter of 2006,the fastest growth of any Western nation.
Currency:
Shekel, (4.58 shekels = 1 U.S. dollar; 2005 est.).
Natural resources:
Copper, phosphate, bromide, potash, clay, sand, sulfur, bitumen,manganese.
Agriculture:
 
 Products
--citrus and other fruits, vegetables, beef, dairy, and poultry products.
Industry:
 
Types
--high-technology projects (including aviation, communications, computer-aided design and manufactures, medical electronics, fiber optics), wood and paper  products, potash and phosphates, processed food, beverages, tobacco, caustic soda,cement, construction, plastics, chemical products, transport equipments diamond cuttingand polishing, metal products, textiles, and footwear.
Trade:
 
 Exports
(2005 est.)--$40.14 billion. Exports include polished diamonds, electroniccommunication, medical and scientific equipment, chemicals and chemical products,electronic components and computers, machinery and equipment, transport equipment,rubber, plastics, and textiles.
 Imports
(excluding defense imports, 2005 est.)--$43.19 billion: raw materials, diamonds, energy ships and airplanes, machinery, equipment, landtransportation equipment for investment, and consumer goods.
Major partners
--U.S.,U.K., Germany;
exports
--U.S., Belgium, Hong Kong;
imports
--U.S., Belgium, Germany,Switzerland, U.K. Israel is one of the world's major exporter of military equipment.2
 
Israel proclaimed Jerusalem as its capital in 1950. The United States, like nearly all other countries, maintains its embassy in Tel Aviv
External trade
For 2006, Israeli exports grew by 11% to just over $29 billion; the hi-tech sector accounted for $14 billion, a 20% increase from the previous year. Israel has the highestaverage living standards in theMiddle East, but a large portion of the population, oftenPalestinians and immigrants, are not benefiting from the wealth of Israel. Costs of livingin Israel is high, and for many their wages never manage to cover more than just the basiccosts. Israel has a large portion of the population that lives under very modest conditions,often surviving only on aid from the government's side.Much of the growth in Israeli economy comes from a politics that has allowed highdeficits on state budgets and foreign trade balance. Israel has the most diversifiedeconomy of the Middle East, and has a high level of modernization.Israeli economy has in the recent years experienced an upswing, much due to lessneed for transferring funds to the military.Mining is an important activity for Israeli economy, of which much is extracted fromthe Dead Sea. Petroleum extraction exists in Israel, but is very small scale.Agriculture in Israel is very effective, as is able to covering about 75% of domesticneeds, despite the limited land available. Citrus fruits and eggs are exported. Yet,agriculture contributes to only 3% of Israel's GNP.Israel has large income from heavy tourism, as well as from donations fromindividuals and organizations around the world. USA is aiding Israeli economy at thelevel of US$ 3 billion annually, of which 1,8 billion is allocated to military expenses, theremaining to the civil economy of Israel. Since Israeli economy still runs on heavydeficits, the country cannot be without this help, even if the recent governments havedeclared economic independence as of its main objectives.3
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