BUSINESS FACTS ABOUT ISRAEL
OVERVIEW: ISRAEL’S ECONOMY
|Israel has a technologically advanced market economy. Its major imports include crude oil, grains, raw materials, and military equipment. High-technology equipment and pharmaceuticals are among the leading exports; while the Israeli diamond industry is one of the world’s centres for diamond cutting and polishing.
Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows.
The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals – following years of prudent fiscal policy and a resilient banking sector. The economy has recovered better than most advanced, comparably sized economies.
In 2010, Israel formally acceded to the OECD.
Israel’s economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects.
Natural gasfields discovered off Israel’s coast during the past two years have brightened Israel’s energy security outlook. The Leviathan field was one of the world’s largest offshore natural gas finds this past decade, and production from the Tama field is expected to meet all of Israel’s natural gas demand beginning mid-2013.
In mid-2011, public protests arose around income inequality and rising housing and commodity prices. The government formed committees to address some of the grievances but has maintained that it will not engage in deficit spending to satisfy populist demands.
The country was the destination for Warren Buffet and Berkshire Hathaway’s first investment outside the US when it purchased ISCAR Metalworking, and the first research and development centres outside the USA for companies including Intel, Microsoft and Apple. American business magnates Bill Gates, Warren Buffet and Donald Trump have praised Israel’s economy and each entrepreneur invested heavily in numerous Israeli industries that range include real estate, hi-tech, and manufacturing.
Israel is also a major tourist destination, with 3.5 million foreign tourists visiting in 2012.
QUICK FACTS ON ISRAEL (FROM 2013 INDEX OF ECONOMIC FREEDOM)
Population 7.6 million
GDP (PPP) $235.2 billion
5-year Compound Annual Growth 4.0%
Per capita income $30,975
Inflation (CPI) 3.5%
FDI Inflow $11.4 billion
EXCHANGE RATE ON 19 MARCH 2016
National Currency: Israeli New Sheqel. (ILS)
1 ILS = 3.98 ZAR; 1 ZAR = 0.25 ILS
1 ILS = 0.26 USD; 1 USD = 3.86 ILS
1 ILS = 0.23 EUR; 1 EUR = 4.34 ILS
1 ILS = 0.18 GBP; 1 GPB = 5.57 ILS
TYPE OF STATE Israel (official name: State of Israel) is a state-nation based on a parliamentary democracy, apart from the military administration in the occupied Palestinian territories.
TYPE OF ECONOMY High-income economy, emerging financial market. The country has the world’s greatest number of start-ups; considerable spending on research and development.
MAJOR RELIGIONS Judaism, Islam, Christianity
LIFE EXPECTANCY 80 years (men), 84 years (women) (UN)
AREA Israeli Central Bureau of Statistics cites 22,072 sq km (8,522 sq miles), including Jerusalem and Golan Heights
TEL AVIV Also known as the White City for its collection of more than 4,000 buildings in the Bauhaus style
HDI (World Rank): 17/187 (which places it in the category of Very Highly Developed)
(Note: (*) The HDI, The HDI – Human Development Index – iis an Indicator Which Synthesizes Several Data Such as Life Expectancy, Level of Education, Professional Careers, Access to Culture etc)
ISRAEL’S INDUSTRIES High-technology products (including aviation, communications, computer-aided design and manufactures, medical electronics, fibre optics), wood and paper products, potash and phosphates, food, beverages, and tobacco, caustic soda, cement, construction, metals products, chemical products, plastics, diamond cutting, textiles, footwear.
AGRICULTURE PRODUCTS Citrus, vegetables, cotton; beef, poultry, dairy products.
EXPORT COMMODITIES Cell phones, video recorders & radio transceivers, electronic integrated circuits, machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel, medical, dental & vet instruments, export apparatus, aircraft engines, non-adhesive plastic plates, sheets & film, electric sound & visual signalling apparatus, specialized electrical machinery & parts, transistor & semiconductor devices, oscilloscopes & electrical measuring instruments, polymers of propylene & other olefins, instruments for physical or chemical analysis, optical lenses & fibres, printed circuits, leather footwear
IMPORT COMMODITIES Raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods.
|BROADCAST MEDIA State broadcasting network, operated by the Israel Broadcasting Authority (IBA), broadcasts on 2 channels, one in Hebrew and the other in Arabic; 5 commercial channels including a channel broadcasting in Russian, a channel broadcasting Knesset proceedings, and a music channel supervised by a public body; multi-channel satellite and cable TV packages provide access to foreign channels; IBA broadcasts on 8 radio networks with multiple repeaters and Israel Defence Forces Radio broadcasts over multiple stations; about 15 privately owned radio stations; overall more than 100 stations and repeater stations (2008).|
INTERNATIONAL DISPUTES The West Bank is disputed territory with its current status subject to the Israeli-Palestinian Interim Agreement. Permanent status will be determined through further negotiation; Israel continues construction of a “seam line” separation barrier along parts of the Green Line and within the West Bank; Israel withdrew its settlers and military from the Gaza Strip and from four settlements in the West Bank in August 2005; Golan Heights is Israeli-occupied (Lebanon claims the Shab’a Farms area of Golan Heights); since 1948, about 350 peacekeepers from the UN Truce Supervision Organization headquartered in Jerusalem monitor ceasefires, supervise armistice agreements, prevent isolated incidents from escalating, and assist other UN personnel in the region.
MEMBERSHIP OF TRADE ORGANISATIONS
BIS, CLS, EBRD, IADB, ICC, ISO, ITUC, OECD, UN, WCO, WFTU, WTO
Technological incubators are support corporations that give fledgling entrepreneurs – veteran Israelis and new immigrants alike – an opportunity to develop their innovative technological ideas and set up new businesses in order to commercialize them.
The incubator program, created in 1991, is applied in all parts of the country under the guidance and with the support of the Office of the Chief Scientist (OCS) of the Ministry of Industry and Trade.
Since then, the project has blossomed into the 27 technological incubators operating in Israel today, containing more than 200 projects in electronics and communication, software, medical devices, new materials and biotechnology.
The Office of the Chief Scientist (OCS) is responsible for implementing the government’s policy of encouraging and supporting industrial research and development in Israel. The OCS provides a variety of support programs that operate on an annual budget of about US $300 million. This is spent on about 1,000 projects undertaken by 500 companies. These programs have helped make Israel a major center of hi-tech entrepreneurship.
The main OCS program (the R&D Fund) supports R&D projects of Israeli companies by offering conditional grants of up to 50% of the approved R&D expenditure. If the project is commercially successful, the company will be under an obligation to repay the grant by royalty payments.
Incubators Center for Technological Initiative
Office of the Chief Scientist (OCS)
5, Bank Israel St.
Tel. 972-2-666-2486 begin_of_the_skype_highlighting 972-2-666-2486 FREE end_of_the_skype_highlighting
P.O. Box 3166, Jerusalem 91036
Israel is a modern country with a vibrant, diverse business community. Israel is a thoroughly westernized country and excels in every variety of business and industry. Most Israelis in the business arena speak fluent English, and business services are sophisticated, accessible and completely comfortable for the business traveler.
Innovative export industries are the engine of the Israeli economy and even very small Israeli firms operate on a global scale. Many large exhibitions are held in Israel featuring locally and internationally developed technologies in communications, computing, defense, medicine, farming and more. With so many foreign business visitors, the tourism industry is adept at meeting international needs.
Israel is one of the very few countries in the world where huge overseas investments in Israeli companies are matched by no less significant Israeli investments all over the world. The country is no longer just a recipient of business tourism based on its booming technology industries – it is the starting point for business ventures of all kinds all over the world. The variety of business – from multinational corporations that have R&D production facilities in Israel to Israeli firms active in real estate — ensure that professional and business services are at the top international level.
Business services include hotels tailored for business visitors, event halls, elaborate convention centers of all sizes, exhibition halls, advanced multimedia equipment and capabilities, the finest in communication equipment and advanced transportation.
STATISTICS on ISRAEL
- 8,345,000 million
- Ranked 97th in 2013
- GDP (PPP):
- $248.7 billion
- 3.1% growth
- 3.6% 5-year compound annual growth
- $32,312 per capita
- Inflation (CPI):
- FDI Inflow:
- $10.4 billion
- GDP per capita
- Ranked 31st in 2011
- Exchange rate
- 1 Israeli New Sheqel (NIS) currently equals R3.14.
- In 2010, the rate was R2 to one NIS
NATIONAL SYMBOLS OF ISRAEL
The flag of Israel is based on the design of the tallit, the prayer shawl worn by Jews during certain prayer services. Because the tallit – with its stripes and blue thread – is one of the most recognizable symbols of the Jewish people, it was chosen to be the basis of the flag. In the centre of the flag is the Magen David, or “Shield of [King] David,” better known in English as the “Star of David” or “Jewish Star,” another recognizable Jewish symbol.
The official emblem of the State of Israel is a candelabrum (menorah). The olive branches on either side represent Israel’s yearning for peace.
ISRAEL’S ECONOMIC FREEDOM SCORE
Israel’s economic freedom score is 68.4, making its economy the 44th freest in the 2014 Index. Its overall score has increased by 1.5 points due to improvements in half of the 10 economic freedoms including business freedom, property rights, monetary freedom, and freedom from corruption. Israel is ranked 5th out of 15 countries in the Middle East/North Africa region.
The Jewish population makes up 6,135,000 (75%); 1,694,000 (20.7%) are Arabs; and, those identified as “others” (non-Arab Christians, Baha’i, etc) make up 348,000 people (4.2%). When the state was established, there were only 806,000 residents and the total population reached its first and second millions in 1949 and 1958 respectively.
The Jewish population grew 1.8% (similar to past years) while the Arab population grew 2.4% (a rapid decline from the 3.4% annual growth rate in the 1990’s). The Christian population grew 1.3% and the Druze population grew 1.7%
Israel’s two official languages are Hebrew and Arabic.
Israel shares borders with:
Egypt – 266 km; Gaza Strip – 51 km; Lebanon – 79 km; Syria – 76 km; West Bank – 307 km.
Largest city Jerusalem – 704 900
Capital city Jerusalem – 704 900
Major Languages Hebrew and Arabic
Major Religions Judaism, Islam and Christianity
Monetary Unit New Israeli Shekel (NIS)
ISRAEL’S FOREIGN TRADE
Export of goods – 12 June 2014 $ 5 178.8 millions
Import of goods – 12 June 2014 $ 6 022.1 millions
Export of goods – February 2015 $ 4,897.7 millions
Import of goods – February 2015 $ 4,751.0 millions
IMMIGRATION AND NATIONALISATION
Israel welcomed approximately 16,600 new immigrants during 2013.
In 2012, 4.3 million (73%) of the total Jewish population were “Sabras” – born in Israel – compared with just a 35% native-born population at Israel’s independence in 1948. 38.6% of the Jewish population are Israeli-born to at least one parent who was also Israeli-born.
Those of European and American ancestry make up about 2.2 million (36%) of the Jewish population while Africans fill out another 14.5% and Asians are 11.2%.
In 2011 it was 80 years for men and 83.6 years for women; and it continues an upward trend of the last decade. Jewish males had a life expectancy 4.2 years higher than their Arab counterparts; while Jewish women had an expectancy 3.0 years higher. The Israeli life expectancy is higher than the OECD average.
The Government of Israel offers scholarships to foreign students as agreed in the Cultural Agreements between Israel and the following countries:
Argentina, Australia, Belarus, Bulgaria, Canada (Quebec Province), China, Columbia, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Greece, Hungary, Italy, Korea, Lithuania, Latvia, Mexico, Moldavia, Macedonia, Poland, Portugal, Romania, Republic of Serbia, Slovak Republic, Slovenia, Spain and Turkey
The following countries have a special scholarship arrangement:
Belgium, Denmark, Germany, India, Great Britain, Finland, France, Luxembourg. Japan, Norway, the Netherlands, Switzerland and Russia.
|UNITED NATIONS MEMBERSHIP DATE 11 May 1949
Imports of goods and services % of GDP 2012 38.5
Exports of goods and services % of GDP 2012 37.4
THE ISRAELI ECONOMY CONSISTS OF:
- Industry: High-technology projects, wood and paper products, potash and phosphates, food
- Agriculture: Citrus, vegetables, cotton; beef
- Exports: Machinery and equipment, software, cut diamonds, agricultural products, chemicals
Despite limited natural resources, intensive development of the agricultural and industrial sectors over the past decades has made Israel largely self-sufficient in food production, apart from grains and beef. Other major imports to Israel, totalling $47.8 billion in 2006, include fossil fuels, raw materials, and military equipment.
Leading Israeli exports include electronics, software, computerized systems, communications technology, medical equipment, pharmaceuticals, fruits, chemicals, military technology, and cut diamonds.
In 2006, Israeli exports reached $42.86 billion, and by 2010 they had reached $80.5 billion a year.
The total area of the State of Israel is 8,522.04 sq. miles (22,072 sq.km.), of which 8,356.40 sq. miles (21,643 sq. km.) is land area. Long and narrow in shape, the country is about 290 miles (470 km.) in length from north to south and some 85 miles (135 km.) across at its widest point between the Dead Sea and the Mediterranean coast. Israel is bordered by Lebanon in the north, Syria to the northeast, Jordan to the east, Egypt to the southwest and the Mediterranean Sea to the west.
Although small in size, Israel encompasses the varied topographical features and climates of a continent. In the north, the forested highlands of Galilee merge with fertile green valleys; sand dunes and farmland mark the coastal plain bordering the Mediterranean shoreline; the rocky peaks of the Samarian and Judean mountain ranges in the centre of the country descend sharply to the semitropical Jordan Valley and the Dead Sea, the lowest place on earth. Mountainous deserts, stretching southward through the Negev and Arava, end at the Gulf of Eilat, the northernmost tip of the Red Sea.
The country’s temperate climate is characterized by much sunshine, with a rainy season from November to April. Total annual precipitation ranges from about 20-30 inches (50-75 cm.) in the north to just over an inch (about 3 cm.) in the far south. Regional climatic conditions vary considerably: hot, humid summers and mild, wet winters in the coastal plain; dry, comfortably warm summers and moderately cold winters, with rain and occasional light snow, in the hill regions; hot, dry summers and pleasant winters in the Jordan Valley; and year-round, semi-arid conditions, with warm to hot days and cool nights, in the south.
FLORA AND FAUNA
The rich variety of Israel’s plant and animal life reflects its geographical location as well as its varied topography and climate. Over 500 kinds of birds, some 100 mammal and 90 reptile species, and nearly 3,000 plant types (150 of which are endemic to Israel) are found within its borders.
Israel has become an internationally known bird-watching centre and a focal point of international research and cooperation.
Over 150 nature reserves and 65 national parks, encompassing nearly 400 square miles (about 1,000 sq. km), have been established throughout the country, with several hundred additional sites in the planning stage.
Rapid population growth and steady expansion of agriculture and industry have contributed to environmental deterioration, especially in the coastal area, where more than half of Israel’s population and most of its industry are concentrated. Plans and programs are in place to address pollution of the Mediterranean and Red Sea coastlines, groundwater pollution, water management, wastewater treatment, air quality, solid waste management, and hazardous substances. Enforcement of environmental legislation is a top priority alongside environmental education. Economic tools are increasingly used to promote environmental improvement, both in the form of financial grants to industries that invest in pollution prevention and in the form of taxes and levies on polluters. In line with the principles of sustainable development, efforts are directed at resource conservation and the prevention of pollution in all economic sectors.
Israel is connected to the world’s major commercial, financial and academic data networks and is fully integrated into international communications systems by means of underwater fibre-optic lines and satellite link-ups. The country ranks high, on a per capita basis, in telephone lines, computers, and Internet users. Israel is one of the first countries worldwide to have 100 percent digitalization of its telephone network, which enables the provision of a range of state-of-the art services for subscribers. In addition, Israel has one of the world’s highest cellular phone penetration rates. Postal services operate throughout Israel and connect it with most countries abroad.
In a country of short distances, cars, buses, and trucks are the main means of transportation. In recent years, both rail freight and passenger usage has increased. In Jerusalem, a light-rail urban system has been constructed. The ancient ports of Jaffa (Yafo), Caesarea and Acre (Akko) have been replaced by three modern deep-water harbours at Haifa, Ashdod, and Eilat, which serve international shipping. Ben-Gurion International Airport is Israel’s main and largest air terminal.
In the course of the past two decades, higher education in Israel has expanded-from 21 academic institutions with 88,800 students in 1989/90 to 69 institutions with 306,600 students in 2011/12.
Out of the 67 academic institutions in 2011/12, seven are universities, one is an open university, 36 are academic colleges, and 23 are teachers’ colleges