Tuesday, May 15, 2018

The Israeli Dream

Many sympathisers with the Palestinian cause look towards the BDS (Boycott, Divest, Sanction) movement as a strategy for change.  Can it succeed in a global economy.

The Israeli economy is estimated to grow by 3.3 percent this year; $100 billion (€83.5 billion) in foreign direct investments is pouring into the country and the official unemployment rate was just 3.6 percent in March — its lowest since the 1970s.
According to the Organization for Economic Co-operation and Development (OECD), last year Israel had a gross domestic product (GDP) of $38,428 per person. Even though Israel ranked behind countries like the US and Germany, such figures add to the country's self-esteem. It was ahead of South Korea and Spain. Known for its high-tech industries, billion-dollar takeovers of Israeli startups keep making headlines, such as US chip maker Intel's purchase of Mobileye for $15.3 billion. Of the estimated 5,000 startups in Israel, around 300 specialize in IT security. And many founders of these cyber security companies, like Argus, Check Point, and Cyber Ark spent their compulsory three-year military service in the elite Unit 8200. This secret intelligence body which operates hacker groups is rumored — among other things — to have been behind the Stuxnet attack on Iran's nuclear research infrastructure in June 2010.
But is the Israeli economy as stable as it is presented? According to government figures, about 5 percent of country's economic output is put back into research and development. 
The population of the country has more than doubled to over 8.5 million since the early 1980s, infrastructure has not been keeping up. The rents in metropolitan Tel Aviv and Jerusalem are becoming almost unaffordable for  more Israelis. And since the country is so small, you can't just move to the periphery and commute to work. For decades, little was invested in infrastructure. A public rail transport system is barely a shell and roads are clogged.
Professor Dan Ben-David, an economist at the Shoresh Institution for Socioeconomic Research and Tel Aviv University, explains, "Poverty and income disparity in Israel are among the highest in the developed world. Half of Israel's population does not even reach the bottom of the income tax scale and pays no income tax at all. Nearly 90 percent of Israel's total income tax revenue is earned by just 20 percent of the population." Compared to other OECD countries, Israel's productivity has been lagging behind the developed world for four decades. The education sector is just as bad complains Ben-David: "Many of our schools are at the same level as developing countries — and half of our students attend such schools." The reason why Israeli universities continue to be the world leaders in research lies in the fact that the country is still benefiting from the investments and development work done by the 'pioneer generation' after independence, according to Ben-David. "In 1973, we had seven universities with leading research institutes. Since then more than four decades have passed and the population is more than two and a half times the size it once was. The country is much richer, gross domestic product per capita has more than doubled. Yet no additional research university has been founded."

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