Israel’s quality of living is substantially greater than that of all other countries in the region, is close to that of Western European countries, and is significantly higher than that of other developed countries. On the 2019 UN Human Development Index, Israel was placed 19th out of 189 countries, indicating “very high” development. The World Bank classifies it as a high-income country. In addition, Israel has an extremely long life expectancy at birth.
What is Israel’s GDP ranking?
By any metric, the year 2020 the year of the coronavirus pandemic was odd. It was the worst year for the Israeli economy in terms of GDP and growth in its 73 years of independence. According to the Israel Central Bureau of Statistics, the gross domestic product in 2020 will decline by 2.6 percent in real terms compared to 2019.
Despite this, the last year has highlighted Israel’s economic resilience in comparison to other leading economies, which have been hit far worse by the economic crisis. While the Israeli economy shrank at a relatively mild rate, owing to the increasing scope of high-tech exports, the US economy shrank at a rate of 3.5 percent, while Germany and Japan each contracted by 5%. Meanwhile, France’s economy contracted by 8%, Italy’s by 9%, the UK’s by 10%, and Spain’s by about 11%.
As a result, Israel has climbed into the enviable club of the world’s top 20 economies, with a per capita GDP of $43.7 thousand (USD) for the last year, putting it in 19th place on the list, according to data from the International Monetary Fund.
GDP per capita growth data an economic barometer of a country’s wealth actually underscores Israel’s excellent accomplishment in this difficult last year, and it’s leapfrogging to the top of the world’s richest nations list.
In this regard, Israel’s wealth per citizen is currently around $44,000, which is higher than some of the world’s most advanced and developed economies, such as the United Kingdom (40.4 thousand dollars per person), Japan (40.1 thousand dollars per person), France (39.9 thousand dollars per person), South Korea (31.5 thousand dollars per person), Italy (31.3 thousand dollars per person), or Spain (31.3 thousand dollars per person) (27.1 thousand dollars per person).
With a GDP of 63.4 thousand USD per person, the United States remains higher on the list than Israel. However, the difference between the two economies has closed significantly in the last decade, with today’s rate hovering around 70%, a substantially better ratio than many developed economies. For example, South Korea’s and Italy’s per capita GDPs are less than half of that of the United States (49.7% and 49.3%, respectively), while Spain’s GDP is just 42.8 percent of that of the United States.
That isn’t the only staggering figure. In terms of GDP per capita, Israel is currently placed 21st, despite the fact that it was not even among the top 30 economies a decade ago. As previously stated, Israel entered the top 20 club of the world’s wealthiest economies for the first time this year, and made particularly strong progress from 32nd place in 2010.
But, despite the optimistic statistics, how is it that we don’t feel particularly wealthy? The issue of Israel’s cost of living has not been resolved in recent years, and in fact has increased, to the point where Israel remains one of the world’s most costly countries.
According to the Organization for Economic Cooperation and Development (OECD), prices in Israel are currently around 25% higher than the OECD average. So, while Israel ranks 19th in terms of per capita income, which is a respectable position, it only ranks 35th in terms of purchasing power parity (PPP), a metric that compares countries using a “basket of commodities.”
Despite this, Israel has able to improve on this front because to a faster growth rate, as seen by a two-place jump from last year, when it was placed 37th, and a seven-place jump in the list of world economies rankings from 2010, when it was 42nd.
What is Israel’s primary revenue source?
The main sources of revenue in Israel are income, value-added, customs and excise, land, and luxury taxes, which are among the highest in the world. Since the late 1950s, the government has gradually increased the proportion of indirect taxes. In 1985, new corporate taxes were imposed on previously untaxed business sectors, while direct taxes on people were reduced marginally. Taxation accounts for around one-fourth of average household income and approaches two-fifths of GNP.
Is Israel more prosperous than Europe?
The report defines wealth as the net assets owned by households or individuals in financial instruments and real estate after debt is removed. Credit Suisse claims that there is more of it than ever before. Individual wealth, which includes savings, property, investments, and other components of net worth, has been consistently increasing over the past decade, despite governments’ struggles to pay bills and collect taxes. According to the report, global wealth reached $263 trillion in 2014, up 8.3% from the previous year and the fastest pace of growth since 2007.
According to the survey, an individual only needs $3,650 net to be included among the world’s wealthiest 50%, while a person would need $77,000 to be included among the top 10%. On these counts, Israelis readily qualify; the average Israeli adult is worth between $150,000 and $175,000, depending on exchange rates. In the Asia-Pacific/Middle East area, which includes China and Japan, this is the sixth highest level of wealth. Only Australia, Singapore, Japan, New Zealand, and Taiwan outperform Israel in this category. Israelis are also, on average, wealthier than Europeans. The average adult in Europe is valued $145,977. North America – the United States and Canada is the world’s wealthiest region, with an average adult having $340,000 in assets.
Why is Israel so prosperous?
Cut diamonds, high-tech equipment, and pharmaceuticals are among Israel’s biggest exports, indicating that it has a highly advanced market economy. In terms of life expectancy, education, per capita income, and other human development index measures, the country is very advanced.
Why is Israel such a powerful nation?
Technology and industrial manufacturing are the two most important economic sectors in the country. The Israeli diamond industry, which accounts for 23.2 percent of all exports, is one of the world’s leading hubs for diamond cutting and polishing. Israel’s natural resources are limited, therefore it relies on imports of fuel, raw materials, wheat, automobiles, uncut diamonds, and manufacturing inputs. The country’s near-complete reliance on imported energy could change in the future. Natural gas deposits were recently discovered off its coast, and the Israeli solar energy industry has assumed the lead.
Quality university education and the growth of a highly motivated and educated population are primarily to blame for Israel’s high-tech boom and quick economic development by regional standards. The government has built a robust educational infrastructure as well as a high-quality incubation system for new cutting-edge ideas that will result in value-driven goods and services. As a result of these advances, the country has developed a significant concentration of high-tech enterprises throughout the country’s regions. These businesses are backed by a thriving venture capital industry. Its core high-tech hub, the “Silicon Wadi,” is second only to its Californian counterpart in prominence. For its dependable and high-quality corporate staff, a number of Israeli enterprises have been acquired by multinational corporations.
International corporate titans such as Microsoft founder Bill Gates, investor Warren Buffett, real estate developer and former US President Donald Trump, and telecommunications behemoth Carlos Slim have all expressed interest in Israel’s economic vibrancy. Beyond their traditional commercial operations and investments in their home countries, each entrepreneur has made significant investments in a variety of Israeli businesses. Berkshire Hathaway (a holding company owned by American billionaire Warren Buffett) purchased ISCAR Metalworking, an Israeli company, for $4 billion in 2006. Berkshire Hathaway’s first purchase outside of the United States.
Israel was asked to join the OECD in September 2010. The European Union, the United States, the European Free Trade Association, Turkey, Mexico, Canada, Ukraine, Jordan, and Egypt have all signed free trade agreements with Israel. Israel became the first non-Latin American country to sign a free trade deal with the Mercosur trade bloc on December 18, 2007.
With 4.55 million foreign tourists visiting Israel in 2019, it is a popular tourist destination, particularly for people of Jewish origin (about 1 tourist per 2 Israelis).
Why is this subject conceptually of interest and why is it topical?
Because both microeconomic theory and the theory of economic integration make extensive use of the concepts of rivalry (substitutability) and complementarity, it is of analytical importance. As the Classics and Neo-classics observed more than a century ago, basic economics demonstrates the significance of distinguishing between replacements and complementing products. For example, if demand for one good increases, demand for its complement increases, and vice versa if the good is a substitute. However, in terms of rival and complementary economies, at the end of the 1950s, Nobel Laureate James Meade proposed important criteria to gauge a priori whether a particular integration scheme between any two countries could lead to net trade diversion or net trade creation, and rivalry and complementarity was one of the criteria. He predicted that integration between two rival economies (such as the US and the EU) would result in net trade creation because integration would allow for more rational redeployment of scarce resources across the entire integration area (a likely effect of the TTIP, which was being negotiated until recently), whereas integration between Australia and Japan, two complementary economies, would result in net trade diversion. Clearly, if these two countries agree on a Free Trade Area or a Customs Union, Australia will begin importing from Japan goods previously manufactured, for example, in South Korea (due to the new discrimination in favor of the now preferred Japanese goods), rather than redeploying its own resources, because Australia does not have a manufacturing industry to redeploy. South Korea, as a rival economy to Japan (but not to Australia), would chastise Australia for prioritizing Japan as a favored trading partner (and be envious of Japanese exporters).
The topic is timely since, among Mediterranean developed countries, Spain and Israel are claimed to have many economic parallels and, as a result, their economies are rivals rather than complimentary. This viewpoint was and continues to be held by some who point to geo-economic considerations such as the fact that both countries are located at the same geographic latitude and have a semi-arid climate that covers the majority of their land. Furthermore, they are both Mediterranean coastline states located close to Central Europe for example, Austria, Germany, and Poland. Both countries have a border with the Arab world.
The weather, topography, and vegetation all contribute to Mediterranean agriculture in terms of primary resources. Coal, water, and crude oil are all in short supply (especially in comparison to Central and Eastern Europe). Israel’s significant gas finds have significantly affected the country’s energy balance. It’s worth noting that solar energy, a renewable energy source, is abundant in both Spain and Israel. Because considerable portions of their different coasts share the same sea, environmental concerns of marine origin are similar. Both countries are affected by relative soil salinity and seasonal forest fires. Furthermore, both Spain and Israel are prone to seasonality because they both heavily exploit their non-business tourist potential (whether for recreational, cultural, or religious reasons).
Another thing that Spain and Israel have in common is that Europe is their primary commercial partner, and they had similar contractual relationships with the EU until 1986. Until that year, the European Community (EC) regarded Spain and Israel to be Mediterranean partners in the so-called Global Mediterranean Policy (GMP). It is widely acknowledged that Europe has had and continues to have a significant influence on demand patterns in both countries. And distance continues to play an important role in international trade for three types of products: bulk goods (such as construction materials and furniture); perishable goods (such as flowers, fresh fruit and vegetables); and distance-sensitive goods and services (such as textiles in fast and short business models, intermediary products based on just-in-time logistics, medical services, tourism, and engineering). All of these items and services, predictably, have long been featured in both countries’ export baskets. Their service exports are dominated by medical and long-term tourism (eg, Eilat and the Canary Islands compete against each other in the winter and retirees settle on the Mediterranean coasts of both countries).
It’s worth noting that their proximity to poor Sub-Saharan African countries (SSA) is particularly crucial in terms of economics, since it permits distance-sensitive services to be provided from either Israel or Spain. Construction businesses from Israel and Spain, for example, are active in SSA. Israel does not yet have the same presence in North Africa as Spain, but if Israel and the Arab world reach an agreement, both Spain and Israel might compete in some agricultural markets, inward medical tourism, fertilisers, solar energy, and other areas in the Maghreb, Libya, and Egypt.
In a nutshell, these events amply demonstrated the case for long-standing claims that both economies had identical production and demand systems.
The changing degree of overlap of the two economies
The EC-6’s decision in 1972 (under pressure from France) to establish a GMP with Mediterranean Non-Member Countries (MNMCs) resulted in Spain and Israel being lumped together in the same category. The EC consequently provided select MNMCs, such as Spain and Israel, preferential commercial treatment at the time; both were then judged to have similar economic structures by the EC authorities in Brussels. As a result, agricultural and manufacturing products from the two countries were regarded equally.
Spain became a full member of the EU in 1986, and began to profit from the Common Agricultural Policy, among other things. In terms of food and other agricultural items, this resulted in a net trade diversion in favor of Spain and against Israel. The same was true for light industry products (food processing, toys, and clothes). Already at the time, the author of this study contended that Israel had little to fear in the long run, and that Morocco, Tunisia, and Egypt should be far more concerned (which at that point seemed much less alarmed than Israel). Surprisingly, the Spanish Foreign Ministry was concerned about the impact of the country’s participation on its Maghreb neighbors. Returning to Israel, however, the issue was exacerbated when the Single Market, which included Spain but not Israel, was finished in 1992. (eg, EU food standards and essential requirements were tailored according to the needs of Spanish producers, not Israeli ones, as Israel was not at the negotiating table).
However, other resources in both countries have been and are being mined more extensively in recent years than they were in the 1980s, and these resources are unique to each country and highly varied and dissimilar.
The elements’ proportion theory of international trade, developed in the 1930s, helps us comprehend the composition and direction of a country’s exports in comparison to the rest of the world. Two countries might be deemed similar or rivals if they export the same products (goods and services) to the same countries. So, what is the basis for the similarity, according to this theory? On having similar relative factor endowments, employing similar technologies, and confronting similar relative consumption patterns at home and in their major export markets. Two countries are comparable regardless of their relative economic size, according to this hypothesis, which is still one of the most widely utilized and beneficial for predicting trade trends.
This has since been deemed incorrect, as it ignores the reality that there are some goods and services whose exportability is dependent on the size of the local market in absolute terms, notably goods for which economies of scale and mass manufacturing play a large role. Even in the age of globalization, there is a phenomenon known as ‘home country prejudice.’ Even in the EU Single Market, it is still easier to sell a product in the domestic market than it is to sell it overseas, all other things being equal. Overseas importers who use the same currency and follow the same rules have the challenge of communicating in various languages or, more simply, a lack of cross-border highways and bridges along their borders. 2
Spain and Israel, for example, are in very different categories when it comes to absolute economic, demographic, and market numbers. With a population of 46 million people, Spain is a G-20 economy; Israel is not. This also suggests that Spain was likely able to export vehicles after gaining experience in its large domestic market in the 1960s, permitting mass production and lower costs, and then starting to export these items internationally. Israel attempted to do the same with automobiles but failed horribly due to its small domestic market.
Leaving aside products that are sensitive to absolute market size, it’s worthwhile to consider the idea of factor proportion and ask, first, if Spain and Israel have faced similar consumption patterns at home and in their major trading partners. Insofar as both countries have previously focused their exports on developed-country markets, primarily the EU and the US, the answer is a resounding yes. Of course, the defence industry is an exception, where Israel adopted countertrade agreements with the US in the 1960s, long before the current boom in high-tech exports to the US market, allowing it to make set-offs to pay for part of its arms procurements from the US (e.g., electro-optical equipment). Israeli exports of kosher food goods to meet the demands of orthodox populations in the United States, Canada, and the United Kingdom were another notable exception to the rule. However, Israel and Spain used the same medium-range, standardised technologies in the production of goods and services for a long time (such as textiles and clothing, toys, chemical products, fruit and vegetables). True, sprinklers and growing vegetables under plastic in agriculture were conceived and/or pioneered in Israel, but they were quickly copied by Spain. As a result, analyzing the similarities and differences between Spain and Israel boils down to comparing relative factor endowments over time.
Spain has used its huge potential for developing intra-industry trade based on economies of scale and diversification, as well as being a part of international value chains, since early on. Spain has used its huge potential for developing intra-industry trade based on economies of scale and diversification, as well as being a part of international value chains (eg, in the car industry). Israel, on the other hand, has been left out because to the so-called “invisible boycott.” For fear of jeopardizing their business in the Muslim world, manufacturing corporations have been hesitant to settle in Israel (a fear probably grossly overrated).
Another benefit Spain has over Israel is that it speaks a world language, Spanish, which gives Spanish investors a clear advantage over other OECD countries, including Israel, in all of Latin America. Contrary to popular belief in Israel, language and culture are no longer crucial for trade and FDI because what matters is English proficiency, and Israelis have a considerably higher average level than Southern Europeans, this is doubtful. The gap between Spain and Israel is rising because, in comparison to before the 1970s, Israeli residents are becoming increasingly illiterate in foreign languages other than English (and Russian) (when one could hear German, French and Spanish in Israeli marketplaces).
A widening gap between the two economies
The thesis here is that the two countries’ economic frameworks have diverged over time. Spain has specialized first in standard, then in medium technology manufacturing products, mass inward tourism, and massively exporting financial, educational, and construction services to Latin America; Israel has developed its high-tech industry focusing on defense, telecommunications, and Internet products; and Spain has specialized first in standard, then in medium technology manufacturing products, mass inward tourism, and massively exporting financial, educational, and construction services to Latin America. Furthermore, the two countries’ export directions have become increasingly divergent, with Israel increasingly exporting to the United States, India, and China, and Spain focusing on the EU (which accounts for more than 60% of total exports) as well as Latin America and the Maghreb, where Israel is absent.
In both nations, FDI has followed the same trend as trade structures: large investment in tourism-related projects, including infrastructure (airports, highways, leisure ports); massive inbound investment in high-tech by US corporations in Israel. It has been able to establish a weapon business that can be tested on the battlefield (a joy that Spain cheerfully leaves to Israel) and hence is highly appealing to defense and security buyers elsewhere, such as unmanned drones, thanks to US government financing.
Both countries have been separating in terms of demographics, which will have major economic implications in the future:
While both societies were young in the 1950s, 1960s, and 1970s (for different causes), this has gradually changed in Spain during the last three decades. There, birth rates have plummeted, but not yet in Israel. Spain’s current fertility rate is 1.32 children per woman, which is insufficient to replace the current population over time (not counting on inward migration). In fact, this is one of the lowest rates in the OECD. It is 3.08 children per woman in Israel, ensuring replacement. The causes for this condition of affairs are well known: women’s emancipation in Spain came with democracy (with divorce, abortion, etc.) toward the end of the 1970s; in Israel, there was no shift from the past (since Israel was already more modern in that respect than Spain under Franco and less modern than Spain in the last decade). The difference in population growth trends between Spain and Israel over the last two decades is almost definitely not related to migration outcomes. Unlike in the past, immigration into Israel has come to a near-standstill in the recent two decades, after peaking in 1993. In contrast, a wave of migration into Spain, notably from South America, peaked around 2008, just as the financial crisis began. However, the annual immigrant flow is still around 200.000 people. Despite the fact that some of these immigrants may eventually depart, Spain is now more of an immigration country than Israel, not the other way around.
Because both countries have similar Mediterranean cuisines and great health care, their life expectancies are among the highest in the world, according to the WHO (2015), and are extremely similar, at 82.8 years in Spain and 82.5 years in Israel. Men do better in Israel (80.6) than in Spain (80.1), but women’s life expectancy is significantly greater in Spain (85.5) than in Israel (80.6). (84.3).
The two countries have vastly different demographic structures, which will have major economic ramifications in the future. In Spain, 18% of the population is over 65, whereas in Israel, only 12% of the population is over 65. In Spain, children under the age of 15 account for only 15% of the overall population, but in Israel, they account for 27%. (right after Mexico in the OECD). In short, Spaniards will face massive health-care costs, as evidenced by the fact that Spain already spends more on health than the average OECD countries (9.2% of GDP) and far more than Israel (9.4 percent and 7.8 percent of GDP respectively). Because of its population structure, Spain will have a significant productivity problem in the future. To put it another way, a population that is getting older as a whole will have to set aside more money for its retirees and their health issues, which means that money for consumption will eat up savings and so will not be available for investment. This can be partially addressed by raising the retirement age, making it easier for women to raise a family while also working, bringing in more migrants, and ensuring that FDI is accessible on a permanent basis to compensate for domestic deficiencies. In any event, if fewer rather than more young people enter the labor market in the coming years, productivity will suffer. Israel does not appear to be facing this issue for at least the next three decades, hence there is no actual pension crisis. However, both countries face a similar issue in terms of worker training to meet the needs of investors and capitalists who rely their long-term economic projections and prospects on a country’s comparative advantages.
Israel faces a serious dilemma here: high-tech firms necessitate a large amount of human capital as well as innovation, both of which are in short supply in Israel and abroad. As a result, rising income disparity is on the horizon, and a large portion of the population is unwilling to even try to excel in scientific or technical courses due to their lifestyle choices. Large segments of the Israeli population are ultra-orthodox (Haredis), and their percentage of the total population is growing. Fortunately, if the opportunity occurs, Israeli Arabs do not appear to reject scientific careers. When visiting pharmacies and hospitals, the number of Arab Israelis working as professionals and socializing happily with other Israelis is rather impressive.
Spain has a problem with some of its kids, but not for the same reasons as the United States. Clearly, most young Spaniards receive inadequate education, resulting in a significant shortfall in matching the needs of their industry; admittedly, the tourism industry does not require many technicians and engineers, but no young man or woman in Spain should expect to earn a large salary working solely in tourism, which has the Achilles’ heel of seasonality. For one thing, Israel spends far more on education than Spain (4.3 percent vs. 3.3 percent of GDP), despite the fact that the results are not particularly encouraging as measured by PISA scores, which show Israel and Spain just achieving the OECD average (and having all to envy when considering the Finns and the French).
In terms of inequality as a flashpoint, OECD statistics from 2013 show that both Israel and Spain are more unequal societies than the average measured by the Gini Index, with Israel being more unequal than Spain (but also more than Portugal and Greece), despite the fact that the two countries’ indexes have been converging in recent years; inequality, however, should be a more serious problem for Israel than for Spain because the economy’s future is based on selling original ideas, which is more difficult to do in Israel Israel, on the other hand, has an excellent record in terms of employment, with both general and youth unemployment rates of less than 10% in 2013, compared to the OECD average of 7.9% and 16%, respectively, and far better than Spain, where youth unemployment reached 55 percent in 2013 and general unemployment was 26.1 percent. Israel’s employment rates by gender are also higher than the OECD average and significantly higher than those in Spain. The same is true in terms of annual hours worked.
In what sense are Israel and Spain still rival economies?
At the moment, the focus should be on GDP per capita, which is a measure of both the production and consumption sides of the level of living.
Clearly, the GDP per capita of the two countries has ranked similarly in the world league for the last three decades, according to IMF, World Bank, and CIA statistics. Spain was leading Israel by 5% to 10% until the Great Recession, but the position has now reversed. According to the most recent OECD data for 2013, Israel’s value was US$33,000, while Spain’s was US$32,523, with the OECD average at US$37,701. What are the positions of the two countries in relation to other OECD members? On the one side, there’s the trio of Japan, Italy, and Korea, and on the other, there’s the trio of Slovenia, the Czech Republic, and Greece. That is not at all horrible.
When questioned about welfare, Israelis say they are happy than the majority of individuals in the OECD, including Spaniards. When the UNDP releases its annual Human Development Index, which considers not just GDP per capita but also life expectancy, health, and education, Spain consistently outperforms Israel.
So, which of the two countries is better economically equipped for the medium term (20-30 years)? It’s tough to say for sure.
One would be tempted to answer that Israel is based solely on macroeconomic statistics; to demonstrate this, consider the following challenging arguments:
- In 2012, Israel’s R&D investment was 3.6 percent, the OECD’s was 2.4 percent, and Spain’s was 1.3 percent: que inventen ellos, to paraphrase the Spanish philosopher Miguel de Unamuno.
- Israel’s infrastructure spending has increased at a rapid pace in the previous decade, reclaiming ground lost in the 1980s and 1990s. In contrast, Spain’s efforts, which began shortly after the country’s entry into the EU and were aided by European money, extend back to the post-accession period. To highlight the issue, according to OECD data from 2014, Israel invested six times more in road development than Spain in absolute terms. This can be explained in part by successive Israeli governments’ desire to catch up to Europe (including Spain).
- Spain’s general government net financial debt has doubled as a percentage of GDP since 2008, reaching 100% today, while Israel’s has declined to 60% in the same time period (despite having to finance a small war in 2009-10).
- The two countries’ savings rates are currently very different. The low rate in Spain (2.9 percent of income) contrasts with the high rate in Israel (10.3 percent), which is comparable to Germany and the Netherlands. The disparity is undoubtedly due in part to the deep recession that continues to impact the majority of Spanish households.
- Over the last eight years, Israel’s population has grown at a rate of 1.8 percent to 1.9 percent every year. Spain’s has been dropping at a rate of -0.3 percent since 2013, and has been progressively declining since 2007, when the Great Recession began, while Israel’s annual rate was over 2%. (see above for the reasons underlying the phenomenon).
However, unlike Israel, which must deal with its geopolitical setting, there are other variables that will not hinder Spain’s economic potential. Looking at long-term interest rates is the greatest way to assess the relative political risk attributed to Israel and Spain by foreign investors. They are still significantly greater in Israel (though falling over time) than in Spain (1.7 percent and 1%, respectively, for the year 2014), which is even more important given that the former’s macroeconomic figures are far superior to the latter’s.
Israel’s growth and development are hampered not just by its political context, but also by its natural surroundings. Spain is significantly less polluted and emits far less CO2 than Israel, which is on par with the OECD average (Spain is at 6 tonnes per capita while Israel is at 10 tonnes). When all other factors are equal, large countries like Spain have a lower population density than smaller countries like Israel. They are also, unsurprisingly, cleaner. For example, it appears that the rate of air and Ghg emissions in Israel is substantially higher than in Spain, despite equal relative rates of private-car use. Not only is Israel’s high population density a negative environmental aspect, but so is the scarcity of excellent agricultural land, which Israel, but not Spain, compensates for by using massive amounts of fertilizer per unit of produce. In Israel, the so-called nutritional balance is 93.4 kg per hectare, while in Spain, it is 11.3 kg. The environmental gap in Spain’s favor could widen even further, not only because it is a renewable energy champion: in 2010, Israel entered a new era after discovering massive gas deposits close to its shores, putting the majority of Israel’s population, who live on the Mediterranean coast, at risk. Dr. Gonzalo Escribano, an analyst at the Elcano Royal Institute, has correctly argued that because Spain is putting its security at risk by relying on a single country (Algeria) for 60% of its gas, it has an obvious interest in cooperating with Israel because the two countries are complementary, not rivals, in terms of non-renewable energy resources.
Finally, there is an essential distinction between Spain and Israel that cannot be used to compare their economies: their relative economic sizes.
In terms of economic strength and size, Spain will always have a significant absolute edge over Israel, albeit one that is eroding. Spain’s GDP is still five to six times that of Israel, owing to its population being five to six times that of Israel. Spain will be able to look down on Israel for a while, just as it does on Ireland, another roaring tiger. Although Israel will never be a member of the G-20, Spain will. In economic terms, however, Spain was seven to eight times larger than Israel in the 1980s; it is now ‘just’ five to six times larger.
It is worth noting that the fact that Spain has a population of 46 million people greatly limits the phenomena that have harmed Israeli consumers, particularly private monopolies and oligopolies. In major countries like Spain, Mexico, or Turkey, the latter is less common. Because Israel is such a small country, there are just two large banks. Housing in Israel is extremely expensive due to a scarcity of urban land and the gradual disappearance of agricultural land. Food costs a lot of money not only because food wholesalers form oligopolies, but also because farmers are artificially protected from foreign competition. This is a bit of a paradox: Israel’s economy is less open in many ways than Spain’s, despite the fact that theory suggests it should be the other way around. Spain has decided to be a member of the European Single Market and the eurozone, as well as to live in a world of fierce cross-border rivalry. It’s worth noting that Spain has become a significantly more open economy than Israel, reversing earlier trends, according to OECD data. Bravo to Spain, but not so much to Israel…
In 2021, what would Israel’s GDP be?
According to Trading Economics global macro models and analysts, Israel’s GDP is predicted to reach 400.00 USD billion by the end of 2021. According to our econometric models, Israel’s GDP will trend around 410.00 USD billion in 2022 and 420.00 USD billion in 2023 in the long run.
Is Israel a developing nation?
Israel is noted for its wide range of ethical values and religious pluralism. It does, however, have one of the highest poverty rates among developed countries. In fact, over 1.8 million individuals in Israel are poor, up from 19.4 percent in 2017 to 20.4 percent in 2018. There are 874,000 children among the 1.8 million population. Between 2008 and 2005, child poverty in Israel increased by 50%, and while the poverty rate has remained essentially unchanged since 2005, Israel still has one of the worst rates of poverty in the developed world. With the number of Israelis living in poverty gradually rising over time, there are a variety of organizations and focused relief activities that can help address the growing number of families and children living in poverty in Israel.
Statistics About Poverty in Israel
Rajagopal seeks to raise awareness about anti-semitism and poverty, two concerns that plague Israelis and the Jewish community. She pointed out that Orthodox Jews and Arabs are the people who are most disproportionately affected by poverty, and that it is critical to keep their needs in mind when working to alleviate poverty. In fact, 47 percent of the Arab community in Israel, as well as 45 percent of Orthodox homes, live in poverty. Rajagopal further pointed out that minorities and communities of color are disproportionately affected by poverty in Israel.
Movements and NGOs Targeting Poverty
In addition to these considerations, grassroots efforts have been made in Israel to reduce poverty by providing medical treatment, adequate housing, and other basic necessities. The Latet organization, for example, aims to address food insecurity among vulnerable groups, such as the elderly, by operating a food bank and offering various financial support programs. Latet has also organized youth activities to foster a sense of community in addition to these initiatives. Its lobbying efforts are assisting a large number of poor people in Israel in finding support while also raising awareness of the issue in other nations.
Finally, Rajagopal offered a more grassroots sort of assistance through a woman named Bracha Kappach, an Israelite woman who has fought for the past 40 years to reduce poverty in Israel. She works on a modest scale and welcomes anyone in need of food or other financial aid into her house.
As the public becomes more aware of Israel’s perilous condition, the government is attempting to boost employment and make modifications to the existing welfare program so that workers can find work. Rajagopal’s insight on how the Israeli government may effectively handle poverty includes including multiethnic Jews in the conversation, because they are frequently forgotten and villainized in the media. “There are ways to meet demands that don’t involve alienation,” Rajagopal argues. She feels that embracing religious initiatives will bring people together and draw attention to greater poverty-reduction efforts.
Conclusion
Israel is still embroiled in a conflict with Palestine, which has temporarily diverted attention away from poverty reduction. As a result, organizations and grassroots movements like Haverim and Latet, as well as the work of individuals like Kappach, are primarily focused on redirecting efforts toward assisting the poor, and are especially important for providing essential aid and supplies to the most vulnerable members of the population. These efforts in Israel demonstrate that targeted aid and addressing the Israeli and Jewish populations’ sociopolitical and religious identities are critical to long-term poverty alleviation in Israel.