Israel has once again sparked anger from the global community after killing dozens of people through bomb and missile attacks on a Palestinian refugee camp in Rafah on Sunday (26/5/2024).
Not only civilians, but Israel’s recent military actions in densely populated areas and safe zones have also drawn condemnation from a number of world leaders. Moreover, Benjamin Netanyahu’s forces are increasingly violating human rights and international humanitarian law, disregarding orders from the International Court.
Despite being an enemy to most of the world’s population, Israel remains “relaxed” because it is a developed, wealthy country with great power. Furthermore, the only Jewish state receives significant support from the United States, a superpower.
Israel, located in West Asia, is a high-income developed country. According to Trading Economics data, Israel’s Gross Domestic Product (GDP) reached US$522.03 billion in 2022, equivalent to around Rp8.482 trillion at the current exchange rate (assuming an exchange rate of Rp6,248/US$). This amount represents 0.23% of the world economy.
The technology sector is the backbone of Israel’s economy. NASDAQ data shows that the high-tech sector in Israel has experienced the highest and fastest growth among all industries in the past decade. In 2022, the technology sector contributed 18.1% to Israel’s GDP and 48.3% to Israel’s total exports.
So, what is the secret to Israel becoming a wealthy country despite continuous conflict with Palestine?
Two factors play a crucial role in driving economic growth in Israel: immigration and capital inflows.
As reported by the BBC International, the advancement of industries in Israel is inseparable from the influx of skilled workers who fled European countries during World War II to avoid persecution. Industries that have developed rapidly in Israel include fertilizers, pesticides, pharmaceuticals, chemicals, plastics, and heavy metals.
Israel is known for having the most advanced manufacturing industry since the 1970s. Israel does not rely on oil money like other Arab countries.
Furthermore, the migration of people from Silicon Valley, USA to Israel in the 1980s established research centers for various US technology companies such as Microsoft, IBM, and Intel. In the 1990s, engineers migrating from former Soviet countries to Israel further enriched the country with an abundance of skilled human resources. It is no wonder that new technology companies have flourished.
The technology sector, which previously accounted for only 37% of industrial products, increased to 58% in 1985. By 2006, this figure rose again to 70%.
The presence of large technology companies automatically contributes substantial revenue to the Israeli government in terms of taxes, foreign exchange, and employment. This income does not include royalties from patents created in Israeli companies.
Moreover, Israel is known to receive funding for research and technology development from other countries such as the USA, Canada, Italy, Austria, France, Ireland, the Netherlands, Spain, China, Turkey, India, and Germany.
