A new year is generally a time to assess the past and consider the future. The year 5775 (in the Jewish calendar) is no different. A look back at this past year, with the grim reality of the Islamic State’s (IS) cruel terror, the general instability in the Middle East, and the recent 50-day war in Gaza between Israel and the Palestinian Islamist terror group Hamas, could easily lead one to despair. This mayhem and bloodshed has also obscured the dynamism and progress the marks Israel’s society.
A comparison between Israel, circa 1984, with Israel of 2014 reveals the country’s incredible growth and its maturity as a developed nation – a nation now commonly referred to as the “Start-Up Nation.” A few statistical facts convey the nation’s dramatic growth. Israel’s population in 1984 stood at 4.1 million, doubling in 30 years to 8.2 million. This means more security for the nation by virtue of a larger standing army and reserves, and less impact on the economy during military mobilization.
While Israel is faced with an existential threat from a nuclear Iran, terrorist organizations such as Hezbollah in Lebanon, IS and al-Qaeda affiliate al-Nusra Front in Syria, and Hamas in Gaza, the disintegration of Iraq and Syria with their substantial armies and armament, have lessened the overall strategic threat facing the Jewish state. Egypt, under President Abdel Fattah al-Sisi, the largest and most powerful Arab state, and Saudi Arabia, the primary Sunni Arab state, have found common cause with Israel. They share a concern over Iran’s quest for regional hegemony, and its drive for nuclear arms, as well as Israel’s opposition to the Muslim Brotherhood, and other radical Islamist movements.
A nation’s strength is not measured by the size of its military, and its ability to deter its enemies alone. National strength is also a function of its economic, social, and cultural achievements. Since 1984 Israel has experienced dramatic improvements in its economy. The inflation rate has declined from 447% to 1.5%, and the interest banks charge declined from 771% to 5%; national debt as a percentage of the GNP has declined from 17% to 2.5%. Likewise, the defense expenditures as a percentage of the GNP went down from 20% to 5.6% (2013), still a bit higher than the U.S. military expenditure of 3.8%. Foreign exchange reserves in dollars grew from $3.3 billion to $90 billion. Exports in 1984 were $10 billion and by 2013 had reached $291.36 billion, while per capita income in 1984 was $7000, and in 2013 it was $34,120. Women in Israel’s labor force amounted to 30% in 1984; it now stands at 53%. And while the Gross Domestic Product (GDP) in the U.S. (2013) grew by 1.9%, in the U.K. 1.7%, France’s 0.2%, Israel’s GDP growth was 3.3%.
Naturally, Israel has economic and social problems. To reach its full potential Israel needs to increase the number of ultra-orthodox Jews and Arabs in the labor market. The high cost of apartments (due to shortage in supply) has been especially difficult for young couples seeking their first home and is a factor in the emigration of bright young people. There are not enough rental apartments for the post-military young. Defense expenditures are still high, but unavoidable. However, when compared with the rest of the OECD (Organization for Economic Cooperation and Development) states, Israel’s situation is improving yearly, which is not the case elsewhere in Western countries.