Israel’s economy – friend or foe?

These facts on Israel’s economy were released by international financial organisations last week.

  • The World Bank believes that Israel’s control of the West Bank hinders the Palestinian economy to the tune of US$3-4 billion per annum.
  • The IMF has assessed that Israel’s economy will grow by around 3.3% in both 2013 and in 2014, at least double the rate of the USA and the European Union. Interestingly, the Palestinian economy is expected to contract for the first time in a decade.

Many in the international media that followed the first story have been asking why Israel does not withdraw from the Palestinian territories. Surely this would allow economic wealth to flood in, no?

There again, reports from Reuters and elsewhere indicate that corruption is so historically endemic in the Palestinian territories that any new money would merely flow towards those already accustomed to receiving it.

I wish to propose another question.

How much does the threat of terror (or for that matter, missiles form Lebanon or Iran)  cost Israel? To ask the same question form another angle, if the Palestinians and others were cease their attacks on Israel, would this not release vast additional resources for social and commercial projects? After all, Israel has already approved 300 economic and humanitarian projects for Palestinians in the past 24 months and more are in the pipeline.

Then maybe the economy of the Holy Land could help to lead others towards greater prosperity. Too simple a consideration for those international economists at the World Bank?

About the Author
Michael Horesh is a recognised business coach and mentor, and has helped clients collectively to create millions in added value over the past decade. He has substantial understanding of the workings of the Israeli economy and the financial situation of the Palestinians, as well as an incisive way of looking at Middle East issues.