Economic History Of Israel
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The economy of Israel is a developed
free-market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers are ...
. The prosperity of
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
's advanced economy allows the country to have a sophisticated
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
, a powerful modern
military A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. It is typically authorized and maintained by a sovereign state, with its members identifiable by their distinct ...
said to possess a nuclear-weapons capability, modern infrastructure rivaling many Western countries, and a high-technology sector competitively on par with Silicon Valley. Israel ranks 35th on the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...
's
ease of doing business index The ease of doing business index was an index created jointly by Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group. The academic research for the report was done jointly with professors Edward Gla ...
. It has the second-largest number of startup companies in the world after the United States, and the third-largest number of NASDAQ-listed companies after the U.S. and China. American companies such as Intel, Microsoft, and Apple built their first overseas research and development facilities in Israel. Other high-tech multi-national corporations, such as IBM,
Google Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
,
Hewlett-Packard The Hewlett-Packard Company, commonly shortened to Hewlett-Packard ( ) or HP, was an American multinational information technology company headquartered in Palo Alto, California. HP developed and provided a wide variety of hardware components ...
,
Cisco Systems Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational corporation, multinational digital communications technology conglomerate (company), conglomerate corporation headquartered in San Jose, California. Cisco develo ...
,
Facebook Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
and
Motorola Motorola, Inc. () was an American Multinational corporation, multinational telecommunications company based in Schaumburg, Illinois, United States. After having lost $4.3 billion from 2007 to 2009, the company split into two independent p ...
have opened R&D centers in the country. The country's major economic sectors are high-technology and industrial manufacturing. The Israeli diamond industry is one of the world's centers for
diamond cutting Diamond cutting is the practice of shaping a diamond from a rough stone into a faceted gem. Cutting diamonds requires specialized knowledge, tools, equipment, and techniques because of its extreme difficulty. The first guild of diamond cutters and ...
and polishing, amounting to 23.2% of all exports. As the country is relatively poor in natural resources, it consequently depends on imports of petroleum, raw materials, wheat, motor vehicles, uncut diamonds and production inputs. Nonetheless, the country's nearly total reliance on energy imports may change in the future as recent discoveries of natural gas reserves off its coast, and the Israeli solar energy industry has taken a leading role in Israel's energy sector. Israel's quality higher education and the establishment of a highly motivated and educated populace is largely responsible for ushering in the country's high technology boom and rapid economic development by regional standards. The country has developed a strong educational infrastructure, and a high-quality incubation system for new cutting edge ideas to create value driven goods and services. These developments have allowed the country to create a high concentration of high-tech companies across the country's regions. These companies are financially backed by a strong venture capital industry. Its central high technology hub, the "
Silicon Wadi Silicon Wadi ( he, סִילִיקוֹן וְאֵדֵי, ) is a region in Israel that serves as one of the global centres for advanced technology. It spans the Israeli coastal plain, and is cited as among the reasons why the country has b ...
", is considered second in importance only to its Californian counterpart. Numerous Israeli companies have been acquired by global corporations for their reliable and quality corporate personnel. In its early decades, the Israeli economy was largely state-controlled and shaped by
social democratic Social democracy is a political, social, and economic philosophy within socialism that supports political and economic democracy. As a policy regime, it is described by academics as advocating economic and social interventions to promote soci ...
ideas. In the 1970s and 1980s, the economy underwent a series of
free-market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
reforms and was gradually liberalized. In the past three decades, the economy has grown considerably, but
GDP per capita Lists of countries by GDP per capita list the countries in the world by their gross domestic product (GDP) per capita. The lists may be based on nominal or purchasing power parity GDP. Gross national income (GNI) per capita accounts for inflows ...
has increased faster than the increase in wages. In September 2010, Israel was invited to join the
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
. Israel has also signed
free trade agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occur ...
s with the European Union, the United States, the
European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four List of sovereign states and dependent territories in Europe, European states: Iceland, Liechtenstein, Norway and Switzerlan ...
, Turkey, Mexico, Canada, Ukraine, Jordan, and Egypt. On 18 December 2007, Israel became the first non-Latin-American country to sign a free trade agreement with the
Mercosur The Southern Common Market, commonly known by Spanish abbreviation Mercosur, and Portuguese Mercosul, is a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina ...
trade bloc. Israel is also a major
tourist destination A tourist attraction is a place of interest that Tourism, tourists visit, typically for its inherent or an exhibited natural or cultural value, historical significance, natural or built beauty, offering leisure and amusement. Types Places of ...
, especially for those of
Jewish Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
ancestry, with 4.55 million foreign tourists visiting it in 2019 (about 1 tourist per 2 Israelis).


History

The
British Mandate for Palestine The Mandate for Palestine was a League of Nations mandate for British administration of the territories of Palestine and Transjordan, both of which had been conceded by the Ottoman Empire following the end of World War I in 1918. The manda ...
that came into effect in 1920 aimed at restricting land purchases by Jewish immigrants. For this reason, the Jewish population was initially more urban and had a higher share in industrial occupations. This particular development resulted economically in one of the few growth miracles of the region whereby the structure of firms was determined mainly by private entrepreneurs rather than by the government. The first survey of the
Dead Sea The Dead Sea ( he, יַם הַמֶּלַח, ''Yam hamMelaḥ''; ar, اَلْبَحْرُ الْمَيْتُ, ''Āl-Baḥrū l-Maytū''), also known by other names, is a salt lake bordered by Jordan to the east and Israel and the West Bank ...
in 1911, by the Russian Jewish engineer
Moshe Novomeysky Moshe Novomeysky ( he, משה נובומייסקי, russian: Моисей Абрамович Новомейский; November 25, 1873 – March 27, 1961) was an Israeli engineer and businessman. He was an early developer of the Palestine Potash C ...
, led to the establishment of Palestine Potash Ltd. in 1930, later renamed the
Dead Sea Works The Dead Sea Works ( he, מפעלי ים המלח, ''Mif'alei Yam HaMelakh'') is an Israeli potash plant in Sdom, on the Dead Sea coast of Israel. History Under the British administration, concessions from the Mandatory government were given ...
. In 1923,
Pinhas Rutenberg Pinhas Rutenberg (russian: Пётр Моисеевич Рутенберг, Pyotr Moiseyevich Rutenberg; he, פנחס רוטנברג: 5 February 1879 – 3 January 1942) was a Russian Jewish engineer, businessman, and political activist. He pla ...
was granted an exclusive concession for the production and distribution of electric power. He founded the Palestine Electric Company, later the
Israel Electric Corporation Israel Electric Corporation ( he, חברת החשמל לישראל, abbreviation: IEC) is the largest supplier of electrical power in Israel and the Palestinian territories. The IEC builds, maintains, and operates power generation stations, sub- ...
. Between 1920 and 1924, some of the countries largest factories were established, including the Shemen Oil Company, the Societe des Grand Moulins, the Palestine Silicate Company and the Palestine Salt Company. In 1937, there were 86 spinning and weaving factories in the country, employing a workforce of 1,500. Capital and technical expertise were supplied by Jewish professionals from Europe. The Ata textile plant in
Kiryat Ata Kiryat Ata ( he, קִרְיַת אָתָא; also Qiryat Ata) is a city in the Haifa District of Israel. In it had a population of , 92% of whom were Jewish citizens. History The Early Bronze Age site at Qiryat Ata has been extensively excavate ...
, which went on to become an icon of the Israeli textile industry, was established in 1934. In 1939, the cornerstone was laid for one of the kibbutz industry's first factories: the Naaman brick factory, which supplied the growing need for construction materials. The textile underwent rapid development during World War II, when supplies from Europe were cut off while local manufacturers were commissioned for army needs. By 1943, the number of factories had grown to 250, with a workforce of 5,630, and output increased tenfold. From 1924, trade fairs were held in Tel Aviv. The
Levant Fair The Levant Fair (Hebrew: יריד המזרח; Yarid HaMizrach) was an international trade fair held in Tel Aviv during the 1920s and 1930s. History Early years One of the early precursors to the Levant Fair, an exhibition titled the "Exhibiti ...
was inaugurated in 1932.


After independence

After statehood, Israel faced a deep economic crisis. As well as having to recover from the devastating effects of the
1948 Arab–Israeli War The 1948 (or First) Arab–Israeli War was the second and final stage of the 1948 Palestine war. It formally began following the end of the British Mandate for Palestine at midnight on 14 May 1948; the Israeli Declaration of Independence had ...
, it also had to absorb hundreds of thousands of Jewish refugees from Europe and almost a million from the Arab world. Israel was financially overwhelmed and faced a deep economic crisis, which led to a policy of
austerity Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spend ...
from 1949 to 1959. Unemployment was high, and foreign currency reserves were scarce. In 1952, Israel and
West Germany West Germany is the colloquial term used to indicate the Federal Republic of Germany (FRG; german: Bundesrepublik Deutschland , BRD) between its formation on 23 May 1949 and the German reunification through the accession of East Germany on 3 O ...
signed an
agreement Agreement may refer to: Agreements between people and organizations * Gentlemen's agreement, not enforceable by law * Trade agreement, between countries * Consensus, a decision-making process * Contract, enforceable in a court of law ** Meeting o ...
stipulating that West Germany was to pay Israel for the persecution of Jews during the
Holocaust The Holocaust, also known as the Shoah, was the genocide of European Jews during World War II. Between 1941 and 1945, Nazi Germany and its collaborators systematically murdered some six million Jews across German-occupied Europe; a ...
, and compensate for Jewish property stolen by the Nazis. Over the next 14 years, West Germany paid Israel 3 billion
marks Marks may refer to: Business * Mark's, a Canadian retail chain * Marks & Spencer, a British retail chain * Collective trade marks, trademarks owned by an organisation for the benefit of its members * Marks & Co, the inspiration for the novel '' ...
(equivalent to US$111.5bn in modern currency). The reparations became a decisive part of Israel's income, comprising as high as 87.5% of Israel's income in 1956. In 1950, the Israeli government launched
Israel Bonds Israel Bonds, the commonly-known name of Development Corporation for Israel (DCI), is the U.S. underwriter of debt securities issued by the State of Israel. DCI is headquartered in New York City, and is a broker-dealer and member of the Financial ...
for
American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the "United States" or "America" ** Americans, citizens and nationals of the United States of America ** American ancestry, pe ...
and
Canadian Jews Canadian citizens who follow Judaism as their religion and/or are ethnically Jewish are a part of the greater Jewish diaspora and form the third largest Jewish community in the world, exceeded only by those in Israel and in the United States ...
to buy. In 1951, the final results of the bonds program exceeded $52 million. Additionally, many American Jews made private donations to Israel, which in 1956 were thought to amount to $100 million a year. In 1957, bond sales amounted to 35% of Israel's special development budget. Later in the century, Israel became significantly reliant on economic aid from the United States, a country that also became Israel's most important source of political support internationally. The proceeds from these sources were invested in industrial and agricultural development projects, which allowed Israel to become economically self-sufficient. Among the projects made possible by the aid was the Hadera power plant, the
Dead Sea Works The Dead Sea Works ( he, מפעלי ים המלח, ''Mif'alei Yam HaMelakh'') is an Israeli potash plant in Sdom, on the Dead Sea coast of Israel. History Under the British administration, concessions from the Mandatory government were given ...
, the
National Water Carrier National Water Carrier of Israel The National Water Carrier of Israel ( he, המוביל הארצי, ''HaMovil HaArtzi'') is the largest water project in Israel, completed in 1964. Its main purpose is to transfer water from the Sea of Galilee ...
,
port A port is a maritime facility comprising one or more wharves or loading areas, where ships load and discharge cargo and passengers. Although usually situated on a sea coast or estuary, ports can also be found far inland, such as Ham ...
development in
Haifa Haifa ( he, חֵיפָה ' ; ar, حَيْفَا ') is the third-largest city in Israel—after Jerusalem and Tel Aviv—with a population of in . The city of Haifa forms part of the Haifa metropolitan area, the third-most populous metropol ...
,
Ashdod Ashdod ( he, ''ʾašdōḏ''; ar, أسدود or إسدود ''ʾisdūd'' or '' ʾasdūd'' ; Philistine: 𐤀𐤔𐤃𐤃 *''ʾašdūd'') is the sixth-largest city in Israel. Located in the country's Southern District, it lies on the Mediterran ...
, and
Eilat Eilat ( , ; he, אֵילַת ; ar, إِيلَات, Īlāt) is Israel's southernmost city, with a population of , a busy port and popular resort at the northern tip of the Red Sea, on what is known in Israel as the Gulf of Eilat and in Jordan ...
,
desalination Desalination is a process that takes away mineral components from saline water. More generally, desalination refers to the removal of salts and minerals from a target substance, as in Soil salinity control, soil desalination, which is an issue f ...
plants, and national infrastructure projects. After statehood, priority was given to establishing industries in areas slated for development, among them,
Lachish Lachish ( he, לכיש; grc, Λαχίς; la, Lachis) was an ancient Canaanite and Israelite city in the Shephelah ("lowlands of Judea") region of Israel, on the South bank of the Lakhish River, mentioned several times in the Hebrew Bible. Th ...
,
Ashkelon Ashkelon or Ashqelon (; Hebrew: , , ; Philistine: ), also known as Ascalon (; Ancient Greek: , ; Arabic: , ), is a coastal city in the Southern District of Israel on the Mediterranean coast, south of Tel Aviv, and north of the border with ...
, the
Negev The Negev or Negeb (; he, הַנֶּגֶב, hanNegév; ar, ٱلنَّقَب, an-Naqab) is a desert and semidesert region of southern Israel. The region's largest city and administrative capital is Beersheba (pop. ), in the north. At its southe ...
and
Galilee Galilee (; he, הַגָּלִיל, hagGālīl; ar, الجليل, al-jalīl) is a region located in northern Israel and southern Lebanon. Galilee traditionally refers to the mountainous part, divided into Upper Galilee (, ; , ) and Lower Galil ...
. The expansion of Israel's textile industry was a consequence of the development of cotton growing as a profitable agricultural branch. By the late 1960s, textiles were one of the largest industrial branches in Israel, second only to the foodstuff industry. Textiles constituted about 12% of industrial exports, becoming the second-largest export branch after polished diamonds."Textiles"
Jewish Virtual Library Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""Th ...
. Retrieved on 8 September 2011.
In the 1990s, cheap East Asian labor decreased the profitability of the sector. Much of the work was subcontracted to 400 Israeli Arab sewing shops. As these closed down, Israeli firms, among them Delta, Polgat, Argeman and Kitan, began doing their sewing work in Jordan and Egypt, usually under the QIZ arrangement. In the early 2000s, Israeli companies had 30 plants in Jordan. Israeli exports reached $370 million a year, supplying such retailers and designers as
Marks & Spencer Marks and Spencer Group plc (commonly abbreviated to M&S and colloquially known as Marks's or Marks & Sparks) is a major British multinational retailer with headquarters in Paddington, London that specialises in selling clothing, beauty, home ...
,
The Gap The Gap may refer to: Places Australia * The Gap, New South Wales, a locality near Wagga Wagga, New South Wales * The Gap, Northern Territory, a suburb of Alice Springs, Northern Territory * The Gap, Queensland, a suburb of Brisbane, Queensland ...
,
Victoria's Secret Victoria's Secret is an American lingerie, clothing, and beauty retailer known for high visibility marketing and branding, starting with a popular catalog and followed by an annual fashion show with supermodels dubbed Angels. As the largest ret ...
,
Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
,
Sears Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began a ...
,
Ralph Lauren Ralph Lauren, ( ; ; born October 14, 1939) is an American fashion designer, philanthropist, and billionaire businessman, best known for the Ralph Lauren Corporation, a global multibillion-dollar enterprise. He has become well known for his co ...
,
Calvin Klein Calvin Richard Klein (born November 19, 1942) is an American fashion designer who launched the company that would later become Calvin Klein Inc., in 1968. In addition to clothing, he also has given his name to a range of perfumes, watches, and ...
, and
Donna Karan Donna Karan (, born Donna Ivy Faske), also known as "DK", is an American fashion designer and the creator of the Donna Karan New York and DKNY clothing labels. Early life Karan was born Donna Ivy Faske to mother Helen "Queenie" Faske (née Rabin ...
. In its first two decades of existence, Israel's strong commitment to development led to economic growth rates that exceeded 10% annually. Between 1950 and 1963, the expenditure among wage-earner's families rose 97% in real terms. Between 1955 and 1966, per capita consumption rose by 221%. The years after the 1973
Yom Kippur War The Yom Kippur War, also known as the Ramadan War, the October War, the 1973 Arab–Israeli War, or the Fourth Arab–Israeli War, was an armed conflict fought from October 6 to 25, 1973 between Israel and a coalition of Arab states led by Egy ...
were a lost decade economically, as growth stalled, inflation soared and government expenditures rose significantly. Also worthy of mention is the 1983 Bank stock crisis. By 1984, the economic situation became almost catastrophic with inflation reaching an annual rate close to 450% and projected to reach over 1000% by the end of the following year. However, the successful economic stabilization plan implemented in 1985 and the subsequent introduction of market-oriented structural reforms reinvigorated the economy and paved the way for its rapid growth in the 1990s and became a model for other countries facing similar economic crises. Two developments have helped to transform Israel's economy since the beginning of the 1990s. The first is waves of Jewish immigration, predominantly from the countries of the former
USSR The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
, that has brought over one million new citizens to Israel. These new Soviet Jewish immigrants, many of them highly educated, had a wellspring of scientific and technical expertise to help spur Israel's burgeoning technology sector, now constitute some 15% of Israel's population. The second development benefiting the Israeli economy is the
peace process A peace process is the set of political sociology, sociopolitical negotiations, agreements and actions that aim to solve a specific armed conflict. Definitions Prior to an armed conflict occurring, peace processes can include the prevention of ...
that begun at the
Madrid conference The Madrid Conference of 1991 was a peace conference, held from 30 October to 1 November 1991 in Madrid, hosted by Spain and co-sponsored by the United States and the Soviet Union. It was an attempt by the international community to revive the ...
of October 1991, which led to the signing of accords and later to a peace treaty between Israel and
Jordan Jordan ( ar, الأردن; tr. ' ), officially the Hashemite Kingdom of Jordan,; tr. ' is a country in Western Asia. It is situated at the crossroads of Asia, Africa, and Europe, within the Levant region, on the East Bank of the Jordan Rive ...
(1994). In the early 2000s, the Israeli economy went into a downturn due to the crashing of the global dot-com bubble which bankrupted many startups established during the height of the bubble. The
Second Intifada The Second Intifada ( ar, الانتفاضة الثانية, ; he, האינתיפאדה השנייה, ), also known as the Al-Aqsa Intifada ( ar, انتفاضة الأقصى, label=none, '), was a major Palestinian uprising against Israel. ...
, which cost Israel billions of dollars in security costs, and a decline in investment and tourism, sent unemployment in Israel to the double digits; growth in one quarter of 2000 was 10%. In 2002, the Israeli economy declined about 4% in one quarter. Afterward, Israel managed to create a remarkable recovery by opening up new markets to Israeli exporters farther afield, such as in the rapidly growing countries of East Asia. This was possible thanks to a rebound in the Israeli tech sector, spurred on by the gradual bottoming out of the dotcom crash and a growing increase in demand for computer software, which in turn was due to burgeoning rates of global internet usage at this time. The explosion in demand for security and defense products following 9/11 also allowed Israel to sell even more of its technologies abroad - a situation only made possible due to Israel’s prior investments in the technology sector in an effort to curb high levels of domestic unemployment. In the 2000s, there was an influx of foreign investment in Israel from companies that formerly shunned the Israeli market. In 2006, foreign investment in Israel totalled $13 billion, according to the
Manufacturers Association of Israel The Manufacturers’ Association of Israel (MAI) (Hebrew: התאחדות התעשיינים בישראל) is the umbrella organization and representative body of all industrial sectors in Israel including the private, public, kibbutz, and governme ...
."Israeli Growth", ''Dateline World Jewry'', September 2007 The ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' said that "bombs drop, yet Israel's economy grows". Moreover, while Israel's total gross external debt is US$95 billion, or approximately 41.6% of GDP, since 2001 it has become a net lender nation in terms of net external debt (the total value of assets vs. liabilities in debt instruments owed abroad), which stood at a significant surplus of US$60 billion. The country also maintains a
current account Current account or Current Account may refer to: * Current account (balance of payments), a country's balance of trade, net of factor income and cash transfers * Current account (banking) A transaction account, also called a checking account, ch ...
surplus in an amount equivalent to about 3% of its gross domestic product in 2010. The Israeli economy withstood the
late-2000s recession The Great Recession was a period of marked general decline, i.e. a recession, observed in national economies globally that occurred from late 2007 into 2009. The scale and timing of the recession varied from country to country (see map). At t ...
, registering positive GDP growth in 2009 and ending the decade with an unemployment rate lower than that of many western countries. There are several reasons behind this economic resilience, for example, the fact that the country is a net lender rather than a borrower nation and the government and the Bank of Israel's generally conservative macro-economic policies. Two policies, in particular, can be cited, one is the refusal of the government to succumb to pressure by the banks to appropriate large sums of public money to aid them early in the crisis, thus limiting their risky behavior. The second is the implementation of the recommendations of the Bach'ar commission in the early to mid-2000s which recommended decoupling the banks' depository- and
Investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
activities, contrary to the then-opposite trend, particularly in the United States, of easing such restrictions which had the effect of encouraging more risk-taking in the financial systems of those countries.


OECD membership

In May 2007, Israel was invited to open accession discussions with the
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
. In May 2010, the OECD voted unanimously to invite Israel to join, despite Palestinian objections. It became a full member on 7 September 2010. The OECD praised Israel's scientific and technological progress and described it as having "produced outstanding outcomes on a world scale."OECD members vote unanimously to invite Israel to join
BBC News (10 May 2010). Retrieved on 8 September 2011.


Challenges

Despite economic prosperity, the Israeli economy faces many challenges, some are short term and some are long term challenges. On the short term its inability to duplicate its success in the telecommunication industry into other growing industries hampers its economic outlooks. Its inability to foster large multinational companies in the last decade also calls into question its ability to employ large numbers of people in advanced industries. On the long term, Israel is facing challenges of high dependency of the growing number of
Ultra-Orthodox Jews Haredi Judaism ( he, ', ; also spelled ''Charedi'' in English; plural ''Haredim'' or ''Charedim'') consists of groups within Orthodox Judaism that are characterized by their strict adherence to ''halakha'' (Jewish law) and traditions, in oppos ...
who have a low level of official labor force participation amongst men, and this situation could lead to a materially lower
employment-to-population ratio The Organisation for Economic Co-operation and Development defines the employment rate as the employment-to-population ratio. This is a statistical ratio that measures the proportion of a country's working age population (statistics are often gi ...
and a higher
dependency ratio The dependency ratio is an age-population ratio of those typically not in the labor force (the ''dependent'' part ages 0 to 14 and 65+) and those typically in the labor force (the ''productive'' part ages 15 to 64). It is used to measure the press ...
in the future. The governor of the
Bank of Israel The Bank of Israel ( he, בנק ישראל, ar, بنك إسرائيل) is the central bank of Israel. The bank's headquarters is located in Kiryat HaMemshala in Jerusalem with a branch office in Tel Aviv. The current governor is Amir Yaron. T ...
,
Stanley Fischer Stanley Fischer ( he, סטנלי פישר; born October 15, 1943) is an Israeli American economist who served as the 20th Vice Chair of the Federal Reserve from 2014 to 2017. Fisher previously served as the 8th governor of the Bank of Israel fro ...
, stated that the growing poverty amongst the Ultra-Orthodox is hurting the Israeli economy. According to the data published by Ian Fursman, 60% of the poor households in Israel are of the
Haredi Jews Haredi Judaism ( he, ', ; also spelled ''Charedi'' in English; plural ''Haredim'' or ''Charedim'') consists of groups within Orthodox Judaism that are characterized by their strict adherence to ''halakha'' (Jewish law) and traditions, in oppos ...
and the
Israeli Arabs The Arab citizens of Israel are the largest ethnic minority in the country. They comprise a hybrid community of Israeli citizens with a heritage of Palestinian citizenship, mixed religions (Muslim, Christian or Druze), bilingual in Arabic an ...
. Both groups together represent 25–28% of the Israeli population. Organizations such as The Kemach Foundation, Gvahim, Jerusalem Village and The Jerusalem Business Networking Forum are addressing these challenges with job placement services and networking events.


Data

The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation under 5% is in green.


Sectors


Agriculture

In 2017, 2.4% of the country's GDP is derived from
agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
. Of a total labor force of 2.7 million, 2.6% are employed in agricultural production while 6.3% in services for agriculture. While Israel imports substantial quantities of grain (approximately 80% of local consumption), it is largely self-sufficient in other agricultural products and foodstuffs. For centuries, farmers of the region have grown varieties of citrus fruits, such as grapefruit, oranges and lemons. Citrus fruits are still Israel's major agricultural export. In addition, Israel is one of the world's leading greenhouse-food-exporting countries. Israel also produces and exports flowers and cotton. The country exports more than $1.3 billion worth of agricultural products every year, including farm produce as well as $1.2 billion worth of agricultural inputs and technology.


Financial services

Israel has over 100 active venture capital funds operating throughout the country with US$10 billion under management. In 2004, international foreign funds from various nations around the world committed over 50 percent of the total dollars invested exemplifying the country's strong and sound reputation as an internationally sought after foreign investment by many countries. Israel's venture capital sector has rapidly developed from the early 1990s, and has about 70 active venture capital funds (VC), of which 14 international VCs have Israeli offices. Israel's thriving venture capital and business-incubator industry played an important role in financing the country's flourishing high-tech sector. In 2008, venture capital investment in Israel, rose 19 percent to $1.9 billion. "Between 1991 and 2000, Israel's annual venture-capital outlays, nearly all private, rose nearly 60-fold, from $58 million to $3.3 billion; companies launched by Israeli venture funds rose from 100 to 800; and Israel's information-technology revenues rose from $1.6 billion to $12.5 billion. By 1999, Israel ranked second only to the United States in invested private-equity capital as a share of GDP. Israel led the world in the share of its growth attributable to high-tech ventures: 70 percent." Israel's thriving venture capital industry has played an important role in funding the country's booming high-technology sector, with hundreds of prosperous Israeli private equity and venture capital firms. The
financial crisis of 2007–08 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...
negatively affected the availability of venture capital locally. In 2009, there were 63
mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
in the Israeli market worth a total of $2.54 billion; 7% below 2008 levels ($2.74 billion), when 82 Israeli companies were merged or acquired, and 33% lower than 2007 proceeds ($3.79 billion) when 87 Israeli companies were merged or acquired.Venture Capital in Israel
Numerous Israeli high tech companies have been acquired by global corporations for its reliable corporate management and quality personnel. In addition to venture capital funds, many of the world's leading investment banks, pension funds, and insurance companies have a strong presence in Israel committing their funds to financially back Israeli high-tech firms and benefit from its prosperous high tech sector. These institutional investors include
Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
,
Bear Stearns The Bear Stearns Companies, Inc. was a New York-based global investment bank, securities trading and brokerage firm that failed in 2008 as part of the global financial crisis and recession, and was subsequently sold to JPMorgan Chase. The compa ...
,
Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Sto ...
,
JP Morgan JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the wo ...
,
Credit Suisse First Boston Credit Suisse First Boston (also known as CSFB and CS First Boston) is the investment banking affiliate of Credit Suisse headquartered in New York. The company was created by the merger of First Boston, First Boston Corporation and Credit Suisse, ...
,
Merrill Lynch Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...
,
CalPERS The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.5 million California public employees, retirees, and their families".CalPERSFac ...
,
Ontario Teachers Pension Plan The Ontario Teachers' Pension Plan Board (french: Régime de retraite des enseignantes et des enseignants de l'Ontario) is an independent organization responsible for administering defined-benefit pensions for school teachers of the Canadian pr ...
, and
AIG American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...
. Israel also has a small but fast growing
hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...
industry. Within five years between 2007 and 2012, the number of active hedge funds doubled to 60. Israel-based hedge funds have registered an increase of 162% from 2006 to 2012, when they managed a total of $2 billion (
The shekel sign (₪) is a currency sign used for the Israeli new shekel, which is the currency of Israel. Israeli new shekel (1986–present) The Israeli new shekel is denoted in he, שקל חדש (''šéqel ħadáš'', , lit. "New Shekel") ...
8 billion) and employed about 300 people. The ever-growing hedge fund industry in Israel is also attracting a myriad of investors from around the world, particularly from the United States.


High technology

Science and technology in Israel is one of the country's most highly developed and industrialized sectors. The modern Israeli ecosystem of high technology is highly optimized making up a significant bulk of the Israeli economy. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development (R&D) concerning gross domestic product (GDP), is among the highest in the world, with 140 scientists and technicians per 10,000 employees. In comparison, the same is 85 per 10,000 in the United States and 83 per 10,000 in Japan. Israel ranks fourth in the world in scientific activity, as measured by the number of scientific publications per million citizens. Israel's percentage of the total number of scientific articles published worldwide is almost 10 times higher than its percentage of the world's population. The country is home to over 1,400 life science companies, including about 300 pharmaceutical companies, 600 medical device companies, 450 digital health companies, and 468 biotechnology companies. Israeli scientists, engineers, and technicians have contributed to the modern advancement of the natural sciences,
agricultural sciences Agricultural science (or agriscience for short) is a broad multidisciplinary field of biology that encompasses the parts of exact, natural, economic and social sciences that are used in the practice and understanding of agriculture. Profession ...
, computer sciences, electronics, genetics, medicine, optics,
solar energy Solar energy is radiant light and heat from the Sun that is harnessed using a range of technologies such as solar power to generate electricity, solar thermal energy (including solar water heating), and solar architecture. It is an essenti ...
and various fields of engineering. The country has one of the world's technologically most literate populations. Israel has the second largest number of startup companies globally, behind only the United States, and remains one of the largest centers in the world for technology start-up enterprises. As of 2013, around 200 start-ups were being created annually in Israel. In 2019, there were nearly 7,000 active start-ups in the country. In 2021, there were 79 Israeli-founded tech
unicorns The unicorn is a legendary creature that has been described since Classical antiquity, antiquity as a beast with a single large, pointed, spiraling horn (anatomy), horn projecting from its forehead. In European literature and art, the unicor ...
, 32 of them headquartered in Israel. More than one-third of cybersecurity unicorns in the world were Israeli in 2021. Israel is also home to nearly 400 research and development centers owned by multinational companies, including giants such as
Google Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
,
Microsoft Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
, and
Intel Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
. Israel is a major
semiconductor A semiconductor is a material which has an electrical resistivity and conductivity, electrical conductivity value falling between that of a electrical conductor, conductor, such as copper, and an insulator (electricity), insulator, such as glas ...
design hub. It is home to numerous chip design centers owned by major multinational corporations, and is considered as having one of the most advanced chip design industries in the world. In 2021, a total of 37 multinational firms were operating in Israel in the semiconductor field. In 1998,
Tel Aviv Tel Aviv-Yafo ( he, תֵּל־אָבִיב-יָפוֹ, translit=Tēl-ʾĀvīv-Yāfō ; ar, تَلّ أَبِيب – يَافَا, translit=Tall ʾAbīb-Yāfā, links=no), often referred to as just Tel Aviv, is the most populous city in the G ...
was named by ''
Newsweek ''Newsweek'' is an American weekly online news magazine co-owned 50 percent each by Dev Pragad, its president and CEO, and Johnathan Davis (businessman), Johnathan Davis, who has no operational role at ''Newsweek''. Founded as a weekly print m ...
'' as one of the ten technologically most influential cities in the world. In 2012, the city was also named one of the best places for high-tech startup companies, placed second behind its California counterpart. In 2013, ''
The Boston Globe ''The Boston Globe'' is an American daily newspaper founded and based in Boston, Massachusetts. The newspaper has won a total of 27 Pulitzer Prizes, and has a total circulation of close to 300,000 print and digital subscribers. ''The Boston Glob ...
'' ranked Tel Aviv as the second-best city for business start-ups, after
Silicon Valley Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical areas San Mateo County ...
. In 2020, StartupBlink ranked Israel as having the third best
startup ecosystem A startup ecosystem is formed by people, startups in their various stages and various types of organizations in a location (physical or virtual), interacting as a system to create and scale new startup companies. These organizations can be furthe ...
in the world, behind only the United States and
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
. As a result of the country's highly renowned and creative start-up culture, Israel is often referred to as the Start-Up Nation (adapted from the book
Start-Up Nation ''Start-up Nation: The Story of Israel's Economic Miracle'' is a 2009 book by Dan Senor and Saul Singer about the economy of Israel. It examines how Israel, a 60-year-old nation with a population of 7.1 million, was able to reach such economi ...
, by
Dan Senor Daniel Samuel Senor (; born November 6, 1971) is an American-Canadian columnist, writer, and political adviser. He was chief spokesman for the Coalition Provisional Authority in Iraq and senior foreign policy adviser to U.S. presidential candidate ...
and Saul Singer) and the "Silicon Valley of the Middle East". Programs that send people to Israel to explore the "Start-Up Nation" economy include TAVtech Ventures and TAMID Group. This success has been attributed by some to widespread service in the
Israel Defense Forces The Israel Defense Forces (IDF; he, צְבָא הַהֲגָנָה לְיִשְׂרָאֵל , ), alternatively referred to by the Hebrew-language acronym (), is the national military of the Israel, State of Israel. It consists of three servic ...
and its development of talent which then fuels the high-tech industry upon discharge. In recent years, the industry has faced a shortage of technology specialists; 15% of positions in the high technology sector of Israel were unfilled as of 2019. However, the largest number of unfilled positions (31%) are in
software engineering Software engineering is a systematic engineering approach to software development. A software engineer is a person who applies the principles of software engineering to design, develop, maintain, test, and evaluate computer software. The term '' ...
specialities:
DevOps DevOps is a set of practices that combines software development (''Dev'') and IT operations (''Ops''). It aims to shorten the systems development life cycle and provide continuous delivery with high software quality. DevOps is complementary to a ...
, back-end,
data science Data science is an interdisciplinary field that uses scientific methods, processes, algorithms and systems to extract or extrapolate knowledge and insights from noisy, structured and unstructured data, and apply knowledge from data across a br ...
,
machine learning Machine learning (ML) is a field of inquiry devoted to understanding and building methods that 'learn', that is, methods that leverage data to improve performance on some set of tasks. It is seen as a part of artificial intelligence. Machine ...
and
artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machines, as opposed to intelligence displayed by animals and humans. Example tasks in which this is done include speech re ...
. Therefore, salaries of specialists in the Israeli market also increased significantly. To solve this problem, IT companies look for filling the gaps abroad. Consequently, they employ about 25% of their entire workforce overseas. Most companies choose to hire employees from
Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
(45%) and the United States (with 16%) are the second most popular
offshoring Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gover ...
destination country. In 2017, the
Council for Higher Education in Israel The Council for Higher Education in Israel ( he, המועצה להשכלה גבוהה, ''HaMo'atza LeHaskala Gevoha'') is a supervisory body for universities and colleges in Israel. It is the only organization with the authority to award academic ...
launched a five-year program to increase the number of graduates from computer science and engineering programs by 40%.


Energy

Historically, Israel relied on external imports for meeting most of its energy needs, spending an amount equivalent to over 5% of its GDP per year in 2009 on imports of energy products. The transportation sector relies mainly on
gasoline Gasoline (; ) or petrol (; ) (see ) is a transparent, petroleum-derived flammable liquid that is used primarily as a fuel in most spark-ignited internal combustion engines (also known as petrol engines). It consists mostly of organic co ...
and
diesel fuel Diesel fuel , also called diesel oil, is any liquid fuel specifically designed for use in a diesel engine, a type of internal combustion engine in which fuel ignition takes place without a spark as a result of compression of the inlet air and t ...
, while the majority of electricity production is generated using imported coal. As of 2013, Israel was importing about 100 mln barrels of oil per year. The country possesses negligible reserves of
crude oil Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...
but does have domestic
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
resources which were discovered in more significant quantities starting in 2009, after many decades of previously unsuccessful
exploration Exploration refers to the historical practice of discovering remote lands. It is studied by geographers and historians. Two major eras of exploration occurred in human history: one of convergence, and one of divergence. The first, covering most ...
.


Natural gas

Until the early 2000s, natural gas use in Israel was minimal. In the late 1990s, the government of Israel decided to encourage the usage of natural gas because of environmental, cost, and resource diversification reasons. At the time however, there were no domestic sources of natural gas and the expectation was that gas would be supplied from overseas in the form of
LNG Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volu ...
and by a future pipeline from Egypt (which eventually became the
Arish–Ashkelon pipeline The Arab Gas Pipeline is a natural gas pipeline in the Middle East. It originates near Arish in the Sinai Peninsula and was built to export Egyptian natural gas to Jordan, Syria, and Lebanon, with branch underwater and overland pipelines to an ...
). Plans were made for the
Israel Electric Corporation Israel Electric Corporation ( he, חברת החשמל לישראל, abbreviation: IEC) is the largest supplier of electrical power in Israel and the Palestinian territories. The IEC builds, maintains, and operates power generation stations, sub- ...
to construct several natural gas-driven power plants, for erecting a national gas distribution grid, and for an LNG import terminal.


Recent discoveries

In 2000, a 33-billion-cubic-metre (BCM), or 1,200-billion-cubic-foot, the natural-gas field was located offshore
Ashkelon Ashkelon or Ashqelon (; Hebrew: , , ; Philistine: ), also known as Ascalon (; Ancient Greek: , ; Arabic: , ), is a coastal city in the Southern District of Israel on the Mediterranean coast, south of Tel Aviv, and north of the border with ...
, with commercial production starting in 2004. however, this field is nearly depleted—earlier than expected due to increased pumping to partially compensate for the loss of imported Egyptian gas in the wake of unrest associated with the fall of the Mubarak regime in 2011. In 2009, a significant gas find named Tamar, with
proven reserves Proven reserves (also called measured reserves, 1P, and reserves) is a measure of fossil fuel energy reserves, such as oil reserves, natural gas reserves, and coal reserves. It is defined as the " antity of energy sources estimated with reasonabl ...
of 223 BCM or (307 BCM total proven + probable) was located in deep water approximately west of
Haifa Haifa ( he, חֵיפָה ' ; ar, حَيْفَا ') is the third-largest city in Israel—after Jerusalem and Tel Aviv—with a population of in . The city of Haifa forms part of the Haifa metropolitan area, the third-most populous metropol ...
, as well as a smaller 15 BCM () field situated nearer the coastline. Furthermore, results of 3D seismic surveys and test drilling conducted since 2010 have confirmed that an estimated 621 BCM () natural-gas deposit named
Leviathan Leviathan (; he, לִוְיָתָן, ) is a sea serpent noted in theology and mythology. It is referenced in several books of the Hebrew Bible, including Psalms, the Book of Job, the Book of Isaiah, the Book of Amos, and, according to some ...
exists in a large underwater geological formation nearby the large gas field already discovered in 2009. The Tamar field began commercial production on 30 March 2013 after four years of development. The supply of gas from Tamar was expected to aid the Israeli economy, which had suffered losses of more than
The shekel sign (₪) is a currency sign used for the Israeli new shekel, which is the currency of Israel. Israeli new shekel (1986–present) The Israeli new shekel is denoted in he, שקל חדש (''šéqel ħadáš'', , lit. "New Shekel") ...
20 billion between 2011 and 2013 resulting from the disruption of gas supplies from neighboring Egypt (and which are not expected to resume due to Egypt's decision to indefinitely suspend its gas supply agreement to Israel). As a result, Israel, as well as its other neighbor Jordan, which also suffered from disruption of gas deliveries from Egypt, had to resort to importing significantly more expensive and polluting liquid heavy fuels as substitute sources of energy. The ensuing energy crisis in Israel was lifted once the Tamar field came online in 2013, while Jordan committed to a US$10 billion, 15-year gas supply deal totaling 45 BCM from the Israeli Leviathan field which is scheduled to come online in late 2019. The agreement is estimated to save Jordan US$600 million per year in energy costs. In 2018, the owners of the Tamar and Leviathan fields announced that they are negotiating an agreement with a consortium of Egyptian firms for the supply of up to 64 BCM of gas over 10 years valued at up to US$15 billion. In early 2012 the Israeli cabinet announced plans to set up a
sovereign wealth fund A sovereign wealth fund (SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such ...
(called "the Israeli Citizens' Fund").


Electricity

Since the founding of the state through the mid-2010s decade, the state-owned utility,
Israel Electric Corporation Israel Electric Corporation ( he, חברת החשמל לישראל, abbreviation: IEC) is the largest supplier of electrical power in Israel and the Palestinian territories. The IEC builds, maintains, and operates power generation stations, sub- ...
(IEC) had an effective monopoly on power generation in the country. In 2010 the company sold 52,037 GWh of electricity. Until the mid-2010s the country also faced a persistently low operating reserve, which is mostly the result of Israel being an "electricity island". Most countries have the capability of relying on power drawn from producers in adjacent countries in the event of a power shortage. Israel's grid however, is unconnected to those of neighboring countries. This is mostly due to political reasons but also to the considerably less-developed nature of the power systems of Jordan and Egypt, whose systems constantly struggle to meet domestic demand and whose per-capita electric generation is less than one fifth that of Israel's. Nevertheless, while operating reserves in Israel were low, the country possessed sufficient generation and transmission capacity to meet domestic electricity needs and unlike in the countries surrounding it,
rolling blackout A rolling blackout, also referred to as rota or rotational load shedding, rota disconnection, feeder rotation, or a rotating outage, is an intentionally engineered electrical power shutdown in which electricity delivery is stopped for non-overla ...
s have historically been quite rare, even at periods of extreme demand. Facing the increasing demand for electricity and concerned about the low reserve situation, the government of Israel began taking steps to increase the supply of electricity and operating reserve, as well to reduce the monopoly position of the IEC and increase competition in the
electricity market In a broad sense, an electricity market is a system that facilitates the exchange of electricity-related goods and services. During more than a century of evolution of the electric power industry, the economics of the electricity markets had un ...
starting in the second half of the 2000s decade. It instructed the IEC to construct several new power stations and encouraged private investment in the generation sector. By 2015, the IEC's share of total nationwide installed electric generation capacity had fallen to about 75%, with the company then possessing an installed generation capacity of about 13.6 gigawatts (GW). Since 2010, Independent Power Producers have constructed three new gas-fired
combined cycle A combined cycle power plant is an assembly of heat engines that work in tandem from the same source of heat, converting it into mechanical energy. On land, when used to make electricity the most common type is called a combined cycle gas turb ...
power stations with a total generation capacity of about 2.2 GW, while various industrial concerns constructed on-premises
cogeneration Cogeneration or combined heat and power (CHP) is the use of a heat engine or power station to generate electricity and useful heat at the same time. Cogeneration is a more efficient use of fuel or heat, because otherwise- wasted heat from elect ...
facilities with a total electricity output of about 1 GW, and which are licensed by the electric authority to sell surplus electricity to the national grid at competitive rates. Also under construction is a 300 MW
pumped storage Pumping may refer to: * The operation of a pump, for moving a liquid from one location to another **The use of a breast pump for extraction of milk * Pumping (audio), a creative misuse of dynamic range compression * Pumping (computer systems), the ...
facility, with two more in planning, plus several solar-powered plants. In addition to the above steps, Israel and
Cyprus Cyprus ; tr, Kıbrıs (), officially the Republic of Cyprus,, , lit: Republic of Cyprus is an island country located south of the Anatolian Peninsula in the eastern Mediterranean Sea. Its continental position is disputed; while it is geo ...
are considering implementing the proposed
EuroAsia Interconnector The EuroAsia Interconnector is a HVDC interconnector between the Greek, Cypriot, and Israeli power grids via the world's longest submarine power cable ( from Israel to Cyprus and from Cyprus to Greece, for a total of ). Connecting Kofinou, Cypru ...
project. This consists of laying a 2000MW
HVDC A high-voltage direct current (HVDC) electric power transmission system (also called a power superhighway or an electrical superhighway) uses direct current (DC) for electric power transmission, in contrast with the more common alternating curren ...
undersea power cable between them and between Cyprus and Greece, thus connecting
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
to the greater European power grid. If carried out, this will allow a further increase in the country's operating reserve as well as sell surplus electricity abroad. In 2016, total nationwide electricity production was 67.2 GWh, of which 55.2% was generated using natural gas and 43.8% using coal — the first time the share of electricity production using natural gas exceeded that generated using coal.


Solar power

Solar power in Israel and the Israeli solar energy industry has a history that dates to the founding of the country. In the 1950s, Levi Yissar developed a solar water heater to help assuage an energy shortage in the new country.Petrotyranny by John C. Bacher,
David Suzuki David Takayoshi Suzuki (born March 24, 1936) is a Canadian academic, science broadcaster, and environmental activist. Suzuki earned a PhD in zoology from the University of Chicago in 1961, and was a professor in the genetics department at th ...
, published by Dundurn Press Ltd., 2000; reference is at Page 7
Petrotyranny
/ref> By 1967 around one in twenty households heated their water with the sun and 50,000 solar heaters had been sold. With the 1970s oil crisis,
Harry Zvi Tabor Harry Zvi Tabor (March 7, 1917 – December 15, 2015) was an Israeli physicist. He is known as the father of Israeli solar energy.
, the father of Israel's solar industry, developed the prototype solar water heater that is now used in over 90% of Israeli homes.


Industrial manufacturing

Israel has a large industrial capacity. It has a well-developed chemical industry with many of its products aimed at the export market. Most of the chemical plants are located in
Ramat Hovav Ramat Hovav ( he, רָמַת חוֹבָב), new official name Ne'ot Hovav (), is an industrial zone in southern Israel and the site of Israel's main hazardous waste disposal facility. Ramat Hovav Industrial Zone is the locus of 19 chemical fact ...
, the
Haifa Bay The Bay of Haifa or Haifa Bay ( he, מפרץ חיפה, ''Mifratz Heifa''), formerly Bay of Acre, is a bay along the Mediterranean coast of Northern Israel. Haifa Bay is Israel's only natural harbor on the Mediterranean. ''Haifa Bay'' also ref ...
area and near the
Dead Sea The Dead Sea ( he, יַם הַמֶּלַח, ''Yam hamMelaḥ''; ar, اَلْبَحْرُ الْمَيْتُ, ''Āl-Baḥrū l-Maytū''), also known by other names, is a salt lake bordered by Jordan to the east and Israel and the West Bank ...
.
Israel Chemicals ICL Group Ltd. (Hebrew: איי.סי. אל. גרופ בע"מ) (formerly Israel Chemicals Ltd., ICL) is a multi-national manufacturing concern that develops, produces and markets fertilizers, metals and other special-purpose chemical products. I ...
is one of the largest fertilizer and chemical companies in Israel and its subsidiary, the
Dead Sea Works The Dead Sea Works ( he, מפעלי ים המלח, ''Mif'alei Yam HaMelakh'') is an Israeli potash plant in Sdom, on the Dead Sea coast of Israel. History Under the British administration, concessions from the Mandatory government were given ...
in
Sdom Sodom and Gomorrah () were two legendary biblical cities destroyed by God for their wickedness. Their story parallels the Genesis flood narrative in its theme of God's anger provoked by man's sin (see Genesis 19:1–28). They are mentioned frequ ...
is the world's fourth-largest producer and supplier of
potash Potash () includes various mined and manufactured salts that contain potassium in water-soluble form.
products. The company also produces other products such as
magnesium chloride Magnesium chloride is the family of inorganic compounds with the formula , where x can range from 0 to 12. These salts are colorless or white solids that are highly soluble in water. These compounds and their solutions, both of which occur in natu ...
, industrial salts, de-icers, bath salts, table salt, and raw materials for the cosmetic industry. Industrial production of metals, machinery and electrical equipment, construction materials, consumer goods, and textiles, as well as food processing also form a significant part of the manufacturing sector. Machinery and equipment manufactured in Israel includes computer equipment, medical equipment, agricultural equipment, and robots. Israel has a successful
semiconductor device fabrication Semiconductor device fabrication is the process used to manufacture semiconductor devices, typically integrated circuit (IC) chips such as modern computer processors, microcontrollers, and memory chips such as NAND flash and DRAM that are pres ...
industry, with several semiconductor manufacturing facilities in the country. One of the country's largest employers is
Israel Aerospace Industries Israel Aerospace Industries (Hebrew: התעשייה האווירית לישראל ''ha-ta'asiya ha-avirit le-yisra'el'') or IAI (תע"א) is Israel's major aerospace and aviation manufacturer, producing aerial and astronautic systems for both mi ...
which produces mainly aviation, space, and defense products. In 2017 the company had an order backlog of 11.4 billion US dollars. There are numerous other aerospace companies. Israeli aerospace companies are primarily sub-suppliers, focusing on fields such as machining, electronic systems and components, and composite materials. Israel is a major manufacturer and exporter of
unmanned aerial vehicle An unmanned aerial vehicle (UAV), commonly known as a drone, is an aircraft without any human pilot, crew, or passengers on board. UAVs are a component of an unmanned aircraft system (UAS), which includes adding a ground-based controller ...
s. Israel also has a significant pharmaceutical industry and is home to
Teva Pharmaceutical Industries Teva Pharmaceutical Industries Ltd. (also known as Teva Pharmaceuticals) is an Israeli multinational pharmaceutical company with headquarters in Tel Aviv, Israel. It specializes primarily in generic drugs, but other business interests include ...
, one of the world's largest pharmaceutical companies, which employed 40,000 people as of 2011. It specializes in
generic Generic or generics may refer to: In business * Generic term, a common name used for a range or class of similar things not protected by trademark * Generic brand, a brand for a product that does not have an associated brand or trademark, other ...
and proprietary pharmaceuticals and active pharmaceutical ingredients. It is the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide. In addition, Israel also has a shipbuilding industry through the company
Israel Shipyards Israel Shipyards is one of the largest shipbuilding and repair facilities in the eastern Mediterranean. The company also operates the first and only privately owned port in Israel. The company’s facilities are located at the Kishon Port (part ...
, which has one of the largest shipbuilding and repair facilities in the Eastern Mediterranean. For the civilian market, it builds merchant ships and other civilian watercraft as well as machinery for ports and heavy industries. It also builds naval craft for the defense market.


Diamond industry

Israel is one of the world's three major centers for polished
diamonds Diamond is a solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the chemically stable form of carbon at room temperature and pressure, b ...
, alongside Belgium and India. Israel's net polished diamond exports slid 22.8 percent in 2012 as polished diamond exports fell to $5.56 billion from $7.2 billion in 2011. Net exports of rough diamonds dropped 20.1 percent to $2.8 billion and net exports of polished diamonds slipped 24.9 percent to $4.3 billion, while net rough diamond imports dropped 12.9 percent to $3.8 billion. Net exports and imports have dropped due to the ongoing
Global financial crisis Global means of or referring to a globe and may also refer to: Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 1989 * ''Global'' (Todd Rundgren album), 2015 * Bruno ...
, particularly within the
Eurozone The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU policies ...
and the United States. The United States is the largest market accounting for 36% of overall export market for polished diamonds while Hong Kong remains at second with 28 percent and Belgium at 8 percent coming in third. , cut diamonds were Israel's largest export product, comprising 23.2% of all exports.


Defense contracting

Israel is one of the world's major exporters of military equipment, accounting for 10% of the world total in 2007. Three Israeli companies were listed on the 2010
Stockholm International Peace Research Institute Stockholm International Peace Research Institute (SIPRI) is an international institute based in Stockholm. It was founded in 1966 and provides data, analysis and recommendations for armed conflict, military expenditure and arms trade as well a ...
index of the world's top 100 arms-producing and military service companies:
Elbit Systems Elbit Systems Ltd. is an Israel-based international defense electronics company engaged in a wide range of programs throughout the world. The company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land ...
,
Israel Aerospace Industries Israel Aerospace Industries (Hebrew: התעשייה האווירית לישראל ''ha-ta'asiya ha-avirit le-yisra'el'') or IAI (תע"א) is Israel's major aerospace and aviation manufacturer, producing aerial and astronautic systems for both mi ...
and
RAFAEL Rafael may refer to: * Rafael (given name) or Raphael, a name of Hebrew origin * Rafael, California * Rafael Advanced Defense Systems, Israeli manufacturer of weapons and military technology * Hurricane Rafael, a 2012 hurricane Fiction * ''R ...
. The Defense industry in Israel is a strategically important sector and a large employer within the country. It is also a major player in the global arms market and is the 11th largest arms exporter in the world as of 2012.Top List TIV Tables-SIPRI
Armstrade.sipri.org. Retrieved on 9 May 2012.
Total arms transfer agreements topped 12.9 billion between 2004 and 2011. There are over 150 active defense companies based in the country with combined revenues of more than US$3.5 billion annually. Israeli defense equipment exports have reached 7 billion U.S. dollars in 2012, making it a 20 percent increase from the amount of defense-related exports in 2011. Much of the exports are sold to the United States and Europe. Other major regions that purchase Israeli defense equipment include
Southeast Asia Southeast Asia, also spelled South East Asia and South-East Asia, and also known as Southeastern Asia, South-eastern Asia or SEA, is the geographical United Nations geoscheme for Asia#South-eastern Asia, south-eastern region of Asia, consistin ...
and
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
.
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
is also major country for Israeli arms exports and has remained Israel's largest arms market in the world. Israel is considered to be the leading
UAV An unmanned aerial vehicle (UAV), commonly known as a drone, is an aircraft without any human pilot, crew, or passengers on board. UAVs are a component of an unmanned aircraft system (UAS), which includes adding a ground-based controller ...
exporter in the world. According to the
Stockholm International Peace Research Institute Stockholm International Peace Research Institute (SIPRI) is an international institute based in Stockholm. It was founded in 1966 and provides data, analysis and recommendations for armed conflict, military expenditure and arms trade as well a ...
, Israeli defense companies were behind 41% of all drones exported in 2001–2011. Israel's defense exports in 2021 reached US$11.2 billion in sales. Exports to Arab countries that joined the
Abraham Accords The Abraham Accords are a series of joint normalization statements initially between Israel, the United Arab Emirates, and Bahrain, effective since September 15, 2020. Mediated by the United States, the initial announcement of August 13, 2020, ...
made up 7% of all Israeli defense exports.


Tourism

Tourism is one of Israel's major sources of income in the country, attracting 4.55 million foreign tourists in 2019, yielding a 25% growth since 2016 and contributed
The shekel sign (₪) is a currency sign used for the Israeli new shekel, which is the currency of Israel. Israeli new shekel (1986–present) The Israeli new shekel is denoted in he, שקל חדש (''šéqel ħadáš'', , lit. "New Shekel") ...
20 billion to the Israeli economy making it an all-time record at that time. The most popular paid visited
site Site most often refers to: * Archaeological site * Campsite, a place used for overnight stay in an outdoor area * Construction site * Location, a point or an area on the Earth's surface or elsewhere * Website, a set of related web pages, typically ...
is
Masada Masada ( he, מְצָדָה ', "fortress") is an ancient fortification in the Southern District of Israel situated on top of an isolated rock plateau, akin to a mesa. It is located on the eastern edge of the Judaean Desert, overlooking the Dea ...
.


External trade

In 2016, Israeli goods exports totaled US$55.8 billion. It imported US$61.9 billion worth of goods in the same year. In 2017 total exports (goods and services) amounted to US$102.3 billion, while imports totaled $96.7 billion. Israel usually posts a modest trade deficit in goods. Its main goods imports consist of raw materials, crude oil, production inputs and finished consumer goods. Most of its exports are high-value-added items such as electronic components and other high-technology equipment, tools, and machinery,
cut Cut may refer to: Common uses * The act of cutting, the separation of an object into two through acutely-directed force ** A type of wound ** Cut (archaeology), a hole dug in the past ** Cut (clothing), the style or shape of a garment ** Cut (ea ...
diamonds, refined petrochemicals, and pharmaceuticals. It normally posts a substantial trade surplus in services thanks to tourism and service industries such as software development, engineering services, and biomedical and scientific research and development. Therefore, overall external trade is positive, contributing to a significant
current account Current account or Current Account may refer to: * Current account (balance of payments), a country's balance of trade, net of factor income and cash transfers * Current account (banking) A transaction account, also called a checking account, ch ...
surplus which as of 2017 stood at 4.7% of GDP. The United States is Israel's largest trading partner, and Israel is the United States' 26th-largest trading partner; two-way trade totaled some $24.5 billion in 2010, up from $12.7 billion in 1997. The principal U.S. exports to Israel include computers, integrated circuits, aircraft parts and other defense equipment, wheat, and automobiles. Israel's chief exports to the U.S. include cut diamonds, jewelry,
integrated circuit An integrated circuit or monolithic integrated circuit (also referred to as an IC, a chip, or a microchip) is a set of electronic circuits on one small flat piece (or "chip") of semiconductor material, usually silicon. Large numbers of tiny ...
s, printing machinery, and telecommunications equipment. The two countries signed a
free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econo ...
agreement (FTA) in 1985 that progressively eliminated
tariff A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and poli ...
s on most goods traded between the two countries over the following ten years. An agricultural trade accord was signed in November 1996, which addressed the remaining goods not covered in the FTA. Some non-tariff barriers and tariffs on goods remain, however. Israel also has trade and cooperation agreements in place with the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
and Canada, and is seeking to conclude such agreements with a number of other countries, including
Turkey Turkey ( tr, Türkiye ), officially the Republic of Türkiye ( tr, Türkiye Cumhuriyeti, links=no ), is a list of transcontinental countries, transcontinental country located mainly on the Anatolia, Anatolian Peninsula in Western Asia, with ...
, Jordan and several countries in Eastern Europe. In regional terms, the European Union is the top destination for Israeli exports. In the four-month period between October 2011 and January 2012, Israel exported goods totalling $5 billion to the EU – amounting to 35% of Israel's overall exports. During the same period, Israeli exports to
East Asia East Asia is the eastern region of Asia, which is defined in both geographical and ethno-cultural terms. The modern states of East Asia include China, Japan, Mongolia, North Korea, South Korea, and Taiwan. China, North Korea, South Korea and ...
and the
Far East The ''Far East'' was a European term to refer to the geographical regions that includes East and Southeast Asia as well as the Russian Far East to a lesser extent. South Asia is sometimes also included for economic and cultural reasons. The ter ...
totaled some $3.1 billion. Until 1995, Israel's trade with the
Arab world The Arab world ( ar, اَلْعَالَمُ الْعَرَبِيُّ '), formally the Arab homeland ( '), also known as the Arab nation ( '), the Arabsphere, or the Arab states, refers to a vast group of countries, mainly located in Western A ...
was minimal due to the Arab League boycott, which was begun against the Jewish community of Palestine in 1945. Arab nations not only refused to have direct trade with Israel (the primary boycott), but they also refused to do business with any corporation that operated in Israel (secondary boycott), or any corporation that did business with a corporation that did business with Israel (tertiary boycott). In 2013, commercial trade between Israel and the
Palestinian territories The Palestinian territories are the two regions of the former British Mandate for Palestine that have been militarily occupied by Israel since the Six-Day War of 1967, namely: the West Bank (including East Jerusalem) and the Gaza Strip. The I ...
were valued at US$20 billion annually. In 2012, ten companies were responsible for 47.7% of Israel's exports. These companies were
Intel Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
Israel,
Elbit Systems Elbit Systems Ltd. is an Israel-based international defense electronics company engaged in a wide range of programs throughout the world. The company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land ...
,
Oil Refineries Ltd BAZAN Group, (ORL or BAZAN, ), formerly Oil Refineries Ltd., is an oil refining and petrochemicals company located in Haifa Bay, Israel. It operates the largest oil refinery in the country. ORL has a total oil refining capacity of approximatel ...
,
Teva Pharmaceuticals Teva Pharmaceutical Industries Ltd. (also known as Teva Pharmaceuticals) is an Israeli multinational pharmaceutical company with headquarters in Tel Aviv, Israel. It specializes primarily in generic drugs, but other business interests include ...
,
Iscar ISCAR Ltd. is an Israeli multinational metal cutting tools company affiliated with one of the world's largest metalworking conglomerates, the IMC Group (International Metalworking Companies). ISCAR and the IMC Group were acquired by Warren Buff ...
,
Israel Chemicals ICL Group Ltd. (Hebrew: איי.סי. אל. גרופ בע"מ) (formerly Israel Chemicals Ltd., ICL) is a multi-national manufacturing concern that develops, produces and markets fertilizers, metals and other special-purpose chemical products. I ...
,
Makhteshim Agan ADAMA Ltd. (Hebrew: אדמה בע"מ ; Chinese: 安道麦), formerly known as Makhteshim-Agan, is a crop protection company. Overview Together with its wholly owned subsidiary, Adama Agricultural Solutions Ltd., ADAMA manufacturers and retails h ...
, Paz Oil Company,
Israel Aerospace Industries Israel Aerospace Industries (Hebrew: התעשייה האווירית לישראל ''ha-ta'asiya ha-avirit le-yisra'el'') or IAI (תע"א) is Israel's major aerospace and aviation manufacturer, producing aerial and astronautic systems for both mi ...
and the Indigo division of Hewlett-Packard. The Bank of Israel and Israel's Export Institute have warned that the country is too dependent on a small number of exporters.


Export destinations and import origins


Rankings

The
Global Competitiveness Report The ''Global Competitiveness Report'' (GCR) is a yearly report published by the World Economic Forum. Since 2004, the ''Global Competitiveness Report'' ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin an ...
of 2016 to 2017 ranked Israel as having the world's second most innovative economy. It was also ranked 19th among 189 world nations on the UN's
Human Development Index The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, whi ...
. As of 2018, Israel ranks 20th out of 133 countries on the economic complexity index. The IMD World Competitiveness Yearbook of 2016 ranked Israel's economy as world 21st most competitive out of the 61 economies surveyed. The Israeli economy was ranked as the world's most durable economy in the face of crises, and was also ranked first in the rate research and development center investments.'Israel's economy most durable in face of crises'
Ynet News (20 May 2010). Retrieved on 8 September 2011.
The Bank of Israel was ranked first among central banks for its efficient functioning, up from the 8th place in 2009. Israel was ranked first also in its supply of skilled manpower. Israeli companies, particularly in the high-tech area, have enjoyed considerable success raising money on
Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...
and other world financial markets: Israel ranked second among foreign countries in the number of its companies listed on U.S. stock exchanges.U.S. listed Israeli companies
Ishitech.co.il. Retrieved on 8 September 2011.
Having moved away from the socialist economic model since the mid-1980s and early 1990s, Israel has made dramatic moves toward the free-market capitalist paradigm. , Israel's economic freedom score is 74.0, making its economy the 26th freest in the 2020
Index of Economic Freedom The ''Index of Economic Freedom'' is an annual index and ranking created in 1995 by The Heritage Foundation and ''The Wall Street Journal'' to measure the degree of economic freedom in the world's nations. The creators of the index claim to tak ...
. Israel's economic competitiveness is helped by strong protection of
property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...
, relatively low corruption levels, and high openness to global trade and investment. Income and corporate tax rates remain relatively high. , Israel ranks 35th out of 179 countries in
Transparency International Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil ...
's
Corruption Perceptions Index The Corruption Perceptions Index (CPI) is an index which ranks countries "by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys." The CPI generally defines corruption as an "abuse of entru ...
. Bribery and other forms of corruption are illegal in Israel, which is a signatory to the OECD Bribery Convention since 2008.


See also

*
Economy of the Middle East The economy of the Middle East is very diverse, with national economies ranging from hydrocarbon-exporting rentiers to centralized socialist economies and free-market economies. The region is best known for oil production and export, which s ...
*
Energy Triangle The Energy Triangle is a natural gas extraction plan between the three allied countries Cyprus, Israel, and Greece. The three countries agreed to use the gas fields Tamar, Leviathan, and Aphrodite; found in 2009, 2010, and 2011 respectively. About ...
*
List of companies of Israel This is a list of notable companies in Israel. A * Adallom * AdExtent * Aeronautics Defense Systems * Africa Israel Investments * Ahava * Aladdin Knowledge Systems * Allot Communications * Alvarion * Am Oved * Amdocs * Amit, Pollak, Matalo ...
*
List of largest companies in Israel This article lists the largest companies in Israel in terms of their revenue, net profit, total assets and market capitalization according to the American business magazine '' Forbes''. 2022 ''Forbes'' list This list is based on the Forbes ...
*
Ministry of Finance (Israel) The Israeli Ministry of Finance ( he, מִשְׂרַד הָאוֹצָר, ''Misrad HaOtzar'') is the main economic ministry of the Government of Israel. It is responsible for planning and implementing the Government's overall economic policy, as we ...
* Privatization in Israel *
Silicon Wadi Silicon Wadi ( he, סִילִיקוֹן וְאֵדֵי, ) is a region in Israel that serves as one of the global centres for advanced technology. It spans the Israeli coastal plain, and is cited as among the reasons why the country has b ...
* ''
Start-up Nation ''Start-up Nation: The Story of Israel's Economic Miracle'' is a 2009 book by Dan Senor and Saul Singer about the economy of Israel. It examines how Israel, a 60-year-old nation with a population of 7.1 million, was able to reach such economi ...
'' *
Standard of living in Israel Israel's standard of living is significantly higher than all of the other countries in the region and equal to Western European countries, and is comparable to that of other highly developed countries. Israel was ranked 19th out of 189 countries ...
*
Taxation in Israel Taxation in Israel include income tax, capital gains tax, value-added tax and land appreciation tax. The primary law on income taxes in Israel is codified in the Income Tax Ordinance. There are also special tax incentives for new immigrants to en ...
*
Tel Aviv Stock Exchange The Tel Aviv Stock Exchange (TASE; ; colloquially known as The Bursa, ) is Israel's only public stock exchange and a public company that has been traded on the Tel-Aviv Stock Exchange since August 1, 2019. Legally, the exchange is regulated by ...
*
Telecommunications in Israel Telecommunications in Israel are the most developed in the Middle East. Israel's system consists of coaxial cables, optical fibers, and microwave radio relay. Prior to the 1990s, Israel's telecommunication market was dominated by Bezeq, a gover ...
*
Trajtenberg Committee The Trajtenberg Committee (Hebrew: ועדת טרכטנברג) is a commission appointed by the Israeli Prime Minister Benjamin Netanyahu on August 8, 2011, in order to examine and propose solutions to Israel's socioeconomic problems. The committee ...
*
Transport in Israel Transportation in Israel is based mainly on private motor vehicles and bus service and an expanding railway network. A lack of inland waterways and the small size of the country make air and water transport of only minor importance in domestic tra ...


References


Further reading

* Argov, Eyal. "The Development of Education in Israel and its Contribution to Long-Term Growth" (No. 2016.15. Bank of Israel, 2016
online
* Shalev, Michael. ''Labour and the Political Economy in Israel''. Oxford: Oxford University Press, 1992. * Ben-Porath, Yoram ed. ''The Israeli Economy: Maturing through Crises''. Cambridge, MA: Harvard University Press, 1986. * Chill, Dan. ''The Arab Boycott of Israel: Economic Aggression and World Reaction''. New York: Praeger, 1976. * Kanovsky, Eliyahu. ''The Economy of the Israeli Kibbutz''. Cambridge, MA: Harvard University Press, 1966. * Klein, Michael. ''A Gemara of the Israel Economy''. Cambridge, MA: National Bureau of Economic Research, 2005. * Michaely, Michael. ''Foreign Trade Regimes and Economic Development: Israel''. New York: National Bureau of Economic Research, 1975. * * . * Senor, Dan and Singer, Saul, ''
Start-up Nation ''Start-up Nation: The Story of Israel's Economic Miracle'' is a 2009 book by Dan Senor and Saul Singer about the economy of Israel. It examines how Israel, a 60-year-old nation with a population of 7.1 million, was able to reach such economi ...
: The Story of Israel's Economic Miracle'', Hachette, New York (2009) * Rubner, Alex. ''The Economy of Israel: A Critical Account of the First Ten Years''. New York: Frederick A Praeger, 1960. * . * Maman, Daniel and Rosenhek, Zeev. ''The Israeli Central Bank: Political Economy: Global Logics & Local Actors''. Routledge, 2011.
''The Global Political Economy of Israel''


External links

* .
Israel
''
The World Factbook ''The World Factbook'', also known as the ''CIA World Factbook'', is a reference resource produced by the Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The official print version is available ...
''.
Central Intelligence Agency The Central Intelligence Agency (CIA ), known informally as the Agency and historically as the Company, is a civilian foreign intelligence service of the federal government of the United States, officially tasked with gathering, processing, ...
.
Israel and the IMF
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster globa ...

World Bank Trade Summary Statistics Israel 2012
* . * . * * Tariffs applied by Israel as provided by ITC'
ITC Market Access Map
an online database of customs tariffs and market requirements
Investigative Dashboard List of Israel Company Registries
* Hebrew documents about the recession in Israel 1966-1967:

{{DEFAULTSORT:Economy Of Israel
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...