At 67 Israel exudes long term optimism

Ambassador (ret.) Yoram Ettinger

April 22, 2015

67 years ago, upon Israel's declaration of independence, Life Magazine noted (May 31, 1948, pp. 21-28) the odds facing the 600,000 Jews of the newly-born economy-starved and militarily-embargoed Jewish State: "King Abdullah of Trans-Jordan sent his Arab Legion against Jerusalem…. Egypt's planes repeatedly bombed Tel Aviv. Syria, Iraq, Lebanon and Saudi Arabia pitched in…. The Arabs cut off Jerusalem from the coast by blocking the road to Tel Aviv…. The old walled city came under artillery fire…. A three-pronged attack was compressing the [Jewish] defenders into the Jewish Quarter of the Old City…. While King Abdullah's Arab legion was spearheading the Arabs' land offensive…. The Jews had little but light anti-aircraft to fight off these attacks…. A country the size of Connecticut is ringed by hostile neighbors…. Time and geography favor the Arabs, and England, which does not recognize Israel, is sending the Arab states arms, [while] Israel's friends in the US aim to lift our embargo on arms…. Can Israel survive?"

In defiance of the jagged cutting edge of the Middle East and the world at-large, and in spite of boycotts, sanctions, embargoes, condemnations, wars, terrorism and diplomatic adversity, the Jewish State has catapulted from the 1939-1944 Holocaust, and the near-destruction during its 1948-1949 War of Independence, to world class stellar performance in the areas of economy, technology, science, medicine, health, agriculture, irrigation, first responding, military and counter-terrorism, and sharing its exceptional achievements with the Third World, the West, and especially with the USA.

At 67, Israel reaffirms a historic fact: pressuring the Jewish olive produces superb oil.

At 67, against all odds, and beyond the wildest expectations, Israel demonstrates that principle-driven, highly-motivated and defiant societies are capable of transforming tough times into challenges and opportunities, while surging to new heights.

At 67, Israel enjoys splendid integration into the global economy and Israel's economy is praised by the International Monetary Fund and the three leading rating companies, Standard & Poor's, Moody's and Fitch Ratings. Israel's GDP and industrial exports total $300bn and $47bn, respectively, compared to $1.5bn and $5mn, respectively, in 1948. Israel's GDP growth (3%) is similar to the USA and higher than Canada (1.9%), Britain (1.6%), Germany (1.1%) and the OECD average (1.3%). Israel's unemployment rate (6%) is lower than the OECD average (7.5%). Israel's debt-to-GDP ratio (67% and declining) is lower than the USA (106%), the Euro Bloc (108%), the G-20 (97%), Britain (92%) and Germany (75%). Israel has the largest (per capita) number of startup companies in the world, the highest (per capita) ratio of university degrees, the highest ratio of research and development personnel (140 per 10,000 workers), and is a research and development hub of some 250 US high technology companies. Overseas investment in Israel is at a record level and trade with India and China is skyrocketing.

At 67, Israel is facing a potential wave of Aliyah (Jewish immigration), which could be the most effective engine of growth, attracting more investment to Israel, enhancing Israel's Jewish demography, and bolstering Israel's posture of deterrence in a dramatic manner. A pro-active Aliyah policy could generate 500,000 Olim - during the next five years – from France, Russia, Ukraine, Germany, Britain, Argentina and the USA, due to the relative strength of Israel's economy, the rise of global anti-Semitism, the gradual Islamification of Europe, and the expansion of Jewish/Zionist education in major Jewish communities.

At 67, Israel is – in contrast to the tumultuous, unpredictable, unreliable, violent and generally anti-US Arab Street – the only stable, predictable, reliable, capable, willing, democratic and unconditional ally of the US, regionally and globally. In 1969 and 1978, the Kaddafi and Khomeini revolutions transformed Libya and Iran from pro – to anti – US regimes. In 2003, the rise of Erdogan changed Turkey from a pro-US to an anti-US Islamic orientation. In 2012, the pro-US Egyptian military regime was replaced by the anti-US Muslim Brotherhood terrorist organization. A regime-change in Jordan, Saudi Arabia and other Gulf States would trigger a similar anti-US shift. On the other hand, Israel's right, left, hawks and doves are inherently and unfailingly allies of the US.

At 67, Israel is increasingly involved in the mutually-beneficial, two-way-street, win-win ties with the US, providing the US with critical intelligence on Islamic terrorism, exceeding intelligence received by the US from all NATO countries combined. Moreover, Israel is the most battle-tested, cost-effective laboratory of the US defense industries, sharing with US manufacturers thousands of upgrades and modifications, enhancing the US global competitiveness, exports, research and development and employment. Israel is to the US defense industry what triple-A tenants are to shopping malls: increasing value and drawing clients - a mega-billion dollar bonanza.

At 67, Israel's robust demography leads the Free World with more than three births per Jewish woman, providing a tailwind to Israel's economy and national security. In 1995, there were 2.3 Jewish births per each Arab birth; in 2014 – 3.4 Jewish births. The number of Jewish births surged from 80,400 in 1995 to 136,000 in 2014 – a 68% increase – while the annual number of Arab births has stabilized over the years. From 600,000 Jews in 1948, Israel's Jewish population has grown to 6.5 million, benefitting from a robust tailwind of fertility (especially among secular Jewish women!) and net-immigration, while Arabs have experienced an unprecedented modernity-driven decline in fertility, in addition to net-emigration.

Against the backdrop of the last stormy sixty-seven years, one may conclude that the sustained wars, terrorism and diplomatic adversity have been merely bumps on the road of unprecedented growth and development, benefitting the Jewish State, the USA and the rest of the world.