Israel has a varied and sophisticated
manufacturing economy that, in many respects, rivals that of western
Europe (this much is recognised by the IMF which in 1997 reclassified
Israel’s economy as industrial rather than developing).
Agriculture is relatively small, about 4.2
% of Gross Domestic Products, with citrus fruit as the main commodity
and export earner. The industrial sector
is concentrated on aircraft, chemicals, engineering, electronics,
construction materials, textiles and food processing.
Mining is also small but set to increase through
production of potash and bromine. There is a small indigenous oil
industry. The infrastructure is well developed
and tourism, in which there has been substantial investment, has
become an important sector of the economy.
Israel’s economic difficulties, which were
predominantly serious during the 1970's and 1980's, were largely
the product of political circumstances, particularly very heavy
defence expenditure (estimated at around 40 % of Gross Domestic
Products) and the cost of resettling Jewish arrivals.
Other significant factors are a large and relatively
inefficient state sector and a substantial annual aid package from
the United States of America, estimated at around US $10 billion
per year. Israel is the single largest recipient of United States
aid, which accounts for about 10 % of Gross Domestic Products.
The economy achieved relatively well during the
1990's in the wake of economic reforms introduced at the beginning
of the decade, including deregulation and some privatisation. However,
Israel was experiencing serious recession by 2000.
This lasted until 2002 when the economy contracted by 1 %, since
then a mild recovery has been under way, growth for 2003 was 0.8
%. Under the Sharon government, economic reforms
have continued irregularly. Israel has free trade agreements with
the EU and the United States of America, the latter is its largest
trading partner, followed by Belgium / Luxembourg, Germany and the
The areas under the control of the Palestinian Authority
have not shared in Israeli success, economic development under the
Palestinian Authority was managed in a haphazard and often corrupt
manner, especially regarding the use of foreign aid.
Since the Sharon administration came to power in Israel, the Palestinian
areas have been successfully sealed off, the wall currently under
construction around the West Bank (at huge cost) merely confirms
that strategic decision.
Large areas under nominal Palestinian control have
been totally destroyed and those remaining are barely able to function
economically. Equally damaging, Palestinians with jobs in the Israeli
territory have been powerless to pursue them properly through punitive
security measures. Much of the population now relies on help from
Business can be frustrating, as in many cases it is difficult to
get a direct reply to a question. Appointments
are usual, as well as the use of business cards. General courtesies
should be observed, although business meetings tend to be less formal
than in Britain.
Business hours can differ
owing to the diverse religions practised. Various offices are open
half a day on Friday.
The following association can offer advice:
Address: Federation of Israeli Chambers of Commerce, PO Box 20027,
84 Haashmonaim Street, Tel Aviv 67132
Telephone: (3) 563 1010
Facsimile: (3) 561 9027
Email address: email@example.com
Website address: www.chamber.org.il