The Economy of Israel

Israel’s economy is considered to be one of the most advanced and developed in the Southwest Asian region. Its GDP based on purchasing power parity in 2006 is estimated at $179 billion while its GDP per capita is $31,767 according to the International Monetary Fund (IMF) which is almost equal to wealthy European countries like France and Italy. It is believed that two major milestones aided Israel’s economy during the 1990s were – heavy migration of Jews from then USSR most of which are highly educated, and initiatives on peace treaty that began at the Madrid conference on 1991.

The country’s main industries include high-technology projects (communications, computer-aided design, aviation, and fiber optics), cement production, diamond cutting, metal products, wood/paper products, textiles and footwear. Some of Israel’s major trading partners are the US, Belgium, Hong Kong, Germany, Switzerland, the UK, and China. Tourism, particularly religious tourism, also plays a significant role in its economy. Israel has joined major free trade agreements with the United States, Canada, Jordan, Mexico, Egypt, the European Free Trade Association, and the European Union. In December 2007, it became the first non-Latin American nation to sign a free trade agreement with Mercosur.

Israel has been enjoying high rankings in terms of doing business including the World Bank’s Ease of Doing Business Index and World Economic Forum’s Global Competitiveness Report. The country ranks second in terms of of the number of start-up businesses in the world, next to the US. Another hard proof of the nation’s success in attractive foreign investors is the presence of multinational companies in the country such as Microsoft, IBM, Intel, Motorola and Cisco Systems. Israel now places second in terms of foreign countries having the most number of companies listed on the US stock exchanges.