Israeli Economy Still Resilient?

50 days of war has done very little to affect the buoyant and versatile Israeli economy in the short term, but perhaps its symptoms will reveal themselves in following months.

There is a reason why Israel has been labelled as the “start-up nation”. Innovation, as you know, is the lifeblood of this country, whose GDP in the past 2 quarters of 2014 has been maintained at 286 billion with an increase of 4.8% since 2011. Regardless of politics, Israel is a business driven nation whose courage to initiate change makes it one of the leading economies of the world, ranked 16th out of 189 UN nations, with a sustainable unemployment rate of 5.8%, considering the social framework of the country.

Now you might ask: so what? Surely the gruesome war the nation just went through must have had an affect on the economy. Well, it certainly did have an affect on government spending who estimates a 1.5 billion cost for Israel’s operations in Gaza in order to defend the state. You might be right, yet the effects and repercussions are yet to be known.

A recent consumer confidence survey suggests that since May 2014, Israel’s confidence has fallen only by 4% until today, but this at the same rate that it was already falling before the start of the war. The Business tendency survey conducted by the CBS shows a decline in business interactions in the course of the summer, which is perhaps why some are saying that Israel’s decade of growth might come to an abrupt end: Haaretz has even called Israel’s economic fortitude as one that is “losing altitude”.

Of course how could Israelis not be worried? After all, 67% of the country is based on services, and all though the CPI has maintained an increase of 0.1, people are worried. Maybe it is Naftali Bennett’s more than odd and incidental ideas about the economy, and politics for that matter. Maybe not.

Yet, despite this unwavering uncertainty, I truly believe that although the economy might experience some contraction, Israel will come out of it decisively, and I am not solely basing my argument on how it managed to ride out the storm of the global recession in the last few years. No. It is something more inherent.

The power of Israel, unlike the countries that it is surrounded by is not only that it is a full democracy but it has always been forced to modernize. Israel’s condition, and the Jewish people’s condition for that matter, has forced this country to move beyond the lethargic mindset of its neighbours and create a place where agriculture can flourish in a desert. In 1948, Israel was not much, yet now 66 years later it has become something that the pre-Second World War 2 generation could only dream of.

The truth is that Israel and Jews have been forced to create a home, and it is these pressures that have caused it to become a nation of great economic potential, certainly not only because of the intelligence and skills of its people, but equally as important is their tendency for hard work. But wait?

I am not denying there are problems. With more than 22% of the population living under the poverty line, and numerous other economic issues, Israel, like most economies, is a work in progress. But perhaps, it is progress that Jews know how to do best.

David Ben Gurion once said that

The Fate of Israel depends on two factors: her strength and her rectitude.

Perhaps nothing is more salient today not only in Israel’s social fabric, but economic health as well, as Israel either continues to maintain a strong economy or might have to face even worse impending dangers from its neighbours.

Israel is and will continue to be shtark.