At 70 – Israel’s economy exceeds expectations Ambassador (Ret.) Yoram Ettinger
https://bit.ly/2HqymuA
1. In 1948, conventional wisdom considered the newly-reestablished Jewish State insolvent economically, indefensible militarily, a basket case, totally dependent upon handouts.
2. In 2018, Forbes Magazine quoted Warren Buffett (February 26, 2018): “I’m not Jewish, but Israel reminds me of the USA after its birth. The determination, motivation, intelligence and initiative of its people are remarkable and extraordinary. I’m a big believer in Israel’s economy.” According to Forbes, “Buffett just purchased a $358MN stake in Teva Pharmaceutical, 1.8% of Teva’s outstanding shares…. In 2006, Buffett’s Berkshire Hathaway purchased an 80% stake in Israel’s Iscar for $4BN, its first international acquisition…. In 2013, Berkshire bought out the remaining 20% for $2BN…. Other Israeli companies purchased by Berkshire include eVolution Networks, creators of wireless network energy savings software, Ray-Q Interconnect, a distributor of electronic components and AgroLogic, a designer of electronic control units for agriculture….”
3. Amazon’s Israel – Island of Success by Adam Reuter and Noga Kainan provides critical data on Israel’s surging economy:
From 1987 to 2017, Israel’s population upsurged from 4.4MN to 8.75MN; GDP – from $35BN to $358BN; GDP per capita – from $8,000 to $41,000; tax burden – from 45% to 30%; foreign exchange reserves – from $4BN to $112BN; national debt to GDP ratio – from 155% to 59%; defense expenditures- from 17% to 4.5% of GDP; US foreign aid (actually, US investment in Israel) – from 7% to 1% of GDP; exports – from $10BN to $102BN; independent energy resources – from 4% to 65% (66% of electricity consumption); desalinated water – from 3% to 50%; annual inflation – from 16% (450% in 1985) to 0.30%; life expectancy – from 75 to 82 years; women’s participation in the job market – from 36% to 58%.
Since the year 2000, Israel’s economy has grown 65% – 2nd best among the OECD countries.
During 2000-2016, the number of wage-earners in the lowest (poorest) ten percent grew by 58%, in the second lowest – 73%, in the third – 45% and in the fourth – 35%.
Israel’s unemployment – 4% – is the lowest in 40 years.
Israel’s median age is the youngest among the OECD countries – 30.
Israel’s fertility rate is the highest among advanced economies – In 2017 the Jewish rate (3.16 births per woman) exceeded the Arab rate (3.11), while the ultra-orthodox rate declined moderately and secular rate surged. In 1969, the Arab fertility rate was 6 births higher than the Jewish rate.
Brain drain? During 1980-2010, 30,000 Israelis with academic degrees left Israel for a year+, while 265,000 Olim (Jewish immigrants) with academic degrees settled in Israel – a net gain of 235,000.
During 2011-2016, 4,000 Ph.ds returned to Israel following, at least, three years abroad; more than 50% of the 4,900 newly-hired senior university staff were returning emigrants, half of them 30-40 year old. About 2,500 returning academicians were absorbed by Israel’s industrial sector.
4. In 2018, Silicon Valley $19BN giant, KLA Tencor, acquired Israel’s Orbotech for $3.4BN (Globes Business Daily, March 20, 2018). It is one of the 10 top exits in Israel’s high-tech: Intel acquired Mobileye ($5BN), Lucent acquired Chromatis ($4.75BN), HP acquired Mercury ($4.5BN), a Chinese consortium acquired Playtika ($4.4BN), KLA Tencor acquired Orbotech ($3.4BN), Sundisk acquired M-Systems ($$1.6BN), Mitsubishi acquired Neurodrum ($1.1BN), Google acquired Waze ($1BN) and Edwards Lifesciences acquired Valtech Cardio ($1BN).
5. In 2018, the $17BN cyber security giant, Palo Alto Networks, acquired Israel’s startup, Secdo, for $100MN. Nike acquired the computerized-vision Israeli startup, Invertex (Globes, April 11). The medical equipment giant, Medtronic (85,000 employees), acquired Israel’s Vision Sense (invasive mini surgery) for $75MN, its 9th Israeli investment in 13 years, including three research & development centers (Globes, April 10). Intel led – along with Sequoia Venture Capital Fund, BMW and iVenture – a round of $50MN private placement in Israel’s Moovit public transportation navigation (Globes Feb. 22). China’s Principle Capital acquired the PCB division of Israel’s Priortech for $35MN and then invested $20MN in Priortech (Globes, April 5). Israel’s $5BN Elbit acquired the American company, Universal Avionics Systems Corp., for $120MN.
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