Why does Israel remain a developed & rich country despite the war? Lifestyle – 4 hours ago

Jakarta, CNBC Indonesia – Israel is a country in the Middle East that often goes to war. Apart from colonizing Palestine for decades, Israel is also known to have enemies with its neighboring countries.

Most recently, Israel has again become the subject of criticism from most of the world community because the Israeli Prime Minister, Benjamin Netanyahu, rejected calls for a ceasefire from the United Nations (UN) General Assembly and emphasized that a ceasefire “will not happen”.

Usually, countries full of conflict easily fall into poverty because political instability can disrupt economic growth. However, this does not apply to Israel. In fact, this Jewish state is a developed country.

The world’s only Jewish state is highly advanced in life expectancy, occupation, per capita income and other human development index indicators.

According to the OECD, Israel’s Gross Domestic Product (GDP) is projected to grow by 2.9% in 2023 and 3.3% in 2024. Rising inflation will weigh on private consumption growth and exports will be hampered by moderate demand growth in trading partners.

Apart from that, Israel’s GDP value in 2023 will reach US$552.03 billion or around IDR 8,758 trillion (assuming an exchange rate of IDR 15,866/US$) and GDP per capita will reach US$42,594 or around IDR 675.8 million per year.

When compared, Palestine has a GDP that is almost 28 times lower than Israel, namely only US$19.1 billion or around Rp. 303.05 trillion. Apart from that, GDP per capita in Palestine is only US$5,722 or around Rp. 91.5 million per year.

Actually, what is the secret of Israel becoming a prosperous country?

Photo: People enjoy the beach in Tel Aviv, Israel, Saturday, May 22, 2021. (AP / Oded Balilty) (AP Photo/Oded Balilty)

There are two factors that play an important role in driving economic growth in Israel, namely immigration and capital inflow.

Launching from BBC, the progress of industry in Israel cannot be separated from the large number of skilled workers who exodused from European countries during the outbreak of World War II to avoid persecution. Industries that have developed rapidly in Israel include fertilizers, pesticides, pharmaceuticals, chemicals, plastics and heavy metals.

The Jewish country is famous for its most advanced manufacturing industry since the 1970s. Israel does not rely on oil as a source of money like other Arab countries.

Then, the movement of people from Silicon Valley, United States (US) to Israel in the 1980s made research centers for various US technology companies, such as Microsoft, IBM and Intel increasingly develop.

Then in the 1990s, engineers moving from the former Soviet Union to Israel made the country even more blessed with an abundance of skilled human resources. Therefore, it is not surprising that new companies in the technology sector are mushrooming.

The technology sector, which previously only contributed 37 percent of industrial products, immediately increased to 58 percent in 1985. In 2006, this figure increased again to 70 percent.

The large number of large companies in the technology sector automatically contributes large revenues to the Israeli government in terms of taxes, foreign exchange sources, or employment. This income does not include royalties from patents made in Israeli companies.

In addition, Israel is known to receive a lot of funding for research and technology development from other countries, such as the US, Canada, Italy, Austria, France, Ireland, the Netherlands, Spain, China, Turkey, India and Germany.

Even though it has a long history of conflict with Palestine, Israel is close to a number of other Arab countries, one of which is the United Arab Emirates (UAE) through a free trade agreement with the UAE.

Not only that, Israel also often gets support from a number of countries regarding war so that the country’s strength continues to increase.

[Gambas:Video CNBC]

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