The Israeli economy is a success story. Even though it has hardly any natural resources, and in spite of wars and waves of immigration that have placed an enormous burden on it, Israel is among the most prosperous countries in the world. Two reasons for Israel’s economical success are direct external aid, totaling at least some $108 billion to date, and an educated work force.
Since its establishment, Israel’s exports of goods and services have grown from some 30 million dollars a year to approximately $2.98 billion a year. Over this period, many changes have occurred in the Israeli economy. In the beginning, the state’s main exports were citrus fruit, as well as processed diamonds and some industrial products. Today, however, most of its exports consist of the products of high-tech industries in diverse areas such as electronics, software, hardware, optics, communications and medical instrumentation.
In the course of time, Israel’s economical ideology has also changed. In the beginning, the economy was prominently centralist, characterized by major state involvement in economic activity. Following political change in 1977, Israel’s governments have adopted a more liberal economical policy.
The GDP of the Israeli economy is some $179 billion, while the GDP per person is some $27,300, ranking Israel 21st when compared to the Organization for Economic Cooperation and Development member countries in 2008. Its exports of goods and services total some $2.98 billion a year, while its imports total some $3.3 billion a year. Its annual growth rate in 2008 was about 4.1%, the inflation rate as of early 2009 was around 3.4%, and the unemployment rate as of early 2009 was 6.8%. The Israeli economy’s predominant sector is high-tech, which became the driving force behind the country’s economic growth in the 1990s. Other prominent sectors in the Israeli economy are pharmaceuticals, chemicals, tourism, military industries, the metal industry and polished diamonds.