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Israel’s economic surge

Straight from the Jerusalem Boardroom #240

  1. The valid concern about Israel’s growing budget deficit, in 2019, should be assessed against the backdrop of Israel’s overall economic track record, as presented by Dr. Adam Reuter, the Chairman and Founder of Financial Immunities, Israel’s largest financial-risk management firm and the co-author of Israel – Island of Success:
1988 2018 Change
Population size 4.4 MN 8.95 MN 103%
Gross Domestic Product (GDP) $37 BN $365 BN 886%
US aid as a percentage of GDP 7% 1% -86%
Gross Domestic Product per capita $8,000 $41,000 413%
Government debt as percent of GDP 155% 61% -61%
Defense expenditures as percent of GDP 17% 5% -71%
Foreign  currency reserves $6 BN $115 BN 1816%
Annual exports $10 BN $110 BN 1000%
Energy from own independent sources 4% 73% 1725%
Water from desalinated sources 3% 52% 1633%
Employment of women 36% 60% 67%
Number of students 70,000 316,000 351%
Life expectancy 75 years 82 years 9%
Tax burden 45% 30% -33%
Number of vehicles per thousand residents 175 398 127%
Average rooms per capita 0.95 1.26 33%

 

Inflation has been another indicator of Israel’s enhanced economic performance: 445% annual inflation in 1984, 16.4% in 1988 and 1.2% in 2018.

  1. According to a July 18, 2019 Forbes Magazine article (Amir Mizroch): “Israel rises as an industrial technology power…. For a country that doesn’t make cars, Israel has one of the world’s hottest automotive technology industries, with globally recognized names like Mobileye (bought by Intel for $15.3BN), WAZE (acquired by Google for $966MN), Moovit (with over 480 million users), as well as up-and-coming companies like Argus and Innoviz. Almost every single global carmaker has an innovation center and research and development facility in Israel to engage with the sector’s +400 Israeli companies….

“Now entrepreneurs from another tech sector in Israel, that isn’t based on any meaningful physical manufacturing – Industrial IoT [the 4th Industrial Revolution enabled by cybersecurity, cloud computing, edge computing, mobile technologies, 3D printing, advance robotics, cognitive computing, etc.] – are hoping to replicate the success of their auto-tech compatriots….

“Venture-backed financing into Israel’s I4 industry [the 4th industrial revolution] grew 223% in four years, from $113MN in 2014 to $365MN in 2018. The 2018 financing figure accounts for 5% of global VC-backed financing into the I4 industry, according to Pitchbook. This might be a small percentage, but only the US and China are ahead of Israel, a nation of just 9 million people….

  1. “Israel’s on course of further growth” was the title of a September, 2018 report on Israel by Pitchbook, a Seattle-based global leader of financial and marketing assessment: “The private market ecosystem in Israel has been maturing rapidly over the past few years, underscored by several big deals and the emergence of a technology cluster known as the Silicon Wadi. Despite its relatively small size and a population of around 8.9 million, Israel has become one of the most technologically influential hubs in the world due, in part, to a young and well-educated workforce and a favorable entrepreneurial environment….

“Israel has developed into a real draw for foreign investors. Its expertise in IT and cybersecurity, combined with its focus of healthcare-related trends, has been an integral part of building and maturing its evolving ecosystem.  While there are undoubtedly headwinds ahead – be they geopolitical or stemming from a slowdown of the global economy – it is no stretch to see Israel’s private markets overall growth trajectory continuing.”

 

 

 

 

 

 

 

 

 

 




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Israel’s Covid-19 Economic Trends

Straight from the Jerusalem Boardroom #248
https://bit.ly/3u29k9g

Foreign investment in Israel’s high-tech companies surged to new heights in the 1st quarter of 2021 – $5.7bn in 172 deals – which is up 89% over the impressive 4th quarter of 2020 and double the volume of the 1st quarter of 2020.

2020 was the first year of surpassing $10bn in capital raised by the Israeli high-tech sector from investors in the US, Asia and Europe, who trust the maturity of Israel’s brain power. Investments in Israeli companies more than tripled in six years, reflecting the effective response by Israeli startups to the technological, medical, pharmaceutical, educational, social and digital challenges posed by Covid-19.

Israel’s economic performance in defiance of Covid-19 is presented by Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

  1. Israel has led the globe in the rapid administration of Covid-19 vaccinations due to effective negotiations with Pfizer and an efficient, country-wide medical infrastructure.
  2. Israel is the second lowest among OECD countries in the number of Covid-19 deaths per number of Covid-19 cases: 0.7% compared to the 2.3% OECD average. Israel features a young population (median age of 30 compared to the OECD’s 42) and an effective country-wide medical infrastructure, including top level HMOs and hospitals.
  3. Israel is ranked 12th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
  4. The International Monetary Fund’s 2025 GDP growth forecast for OECD countries: Israel – 4%, OECD average – 2.2%, US – 1.8%, Australia – 2.5%, Ireland – 2.6%, France and Canada – 1.7%, the UK – 1.6%, Germany – 1.2%, etc.
  5. Israel’s 2020 GDP was reduced by 2.5%, compared to the OECD average reduction of 4.1%, South Korea – 1%, Norway – 0.8%, Australia – 2.6%, US – 3.5%, Japan – 4.8%, Germany – 5%, France – 8%, the UK – 10% reduction, etc. GDP growth was recorded in New Zealand – 2.4% and Ireland – 3.5%.
  6. In 2020, Israel was ranked 20th among the 37 members of the OECD in terms of GDP per capita, featuring $43,000 (GDP – $408bn), ahead of Japan, Italy and Spain, and very close behind the UK ($44,000) and France ($45,000).
  7. Israel’s debt-to-GDP ratio increased from 60% in 2019 to 72% in 2020, compared to the OECD’s average increase from 66% to 82%. The 2020’s debt-to-GDP ratio was 266% in Japan, Italy – 161%, the US – 131%, Germany – 73%, etc.
  8. Israel’s foreign exchange reserves-to-GDP ratio of 41% (3rd among the OECD countries) attests to its financial stability, and Israel’s capability to raise foreign credit promptly in a cost-effective manner. Israel’s foreign exchange reserves in March 2021 – $186bn.
  9. During the past decade, Standard and Poor (S&P) accorded Israel a positive credit rating trend, unlike the negative trend for the G-7 countries. In 2020, notwithstanding Covid-19, Israel’s credit rating (S&P) remained at AA.
  10. Some 380 global high-tech giants operate in Israel, including Microsoft, Amazon, IBM, Intel, Cisco, Apple, Verizon, Applied Materials, Dell, HP, Kodak, Oracle, Philips, SAP, Medtronics, GM, eBay, GE, etc. Israel leads the world in the ratio of research and development investment to GDP: 4.9%. 85% of this investment comes from the business sector.

 




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The post-1967 turning point of US-Israel cooperation

Israeli benefits to the US taxpayer exceed US foreign aid to Israel

Iran - A Clear And Present Danger To The USA

Exposing the myth of the Arab demographic time bomb