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Israel Experiences Economic Miracle

[Seattle Post-Intelligencer] Amotz Asa-El - Data released last week by the Central Bureau of Statistics indicates that Israel's GDP soared during the first half of the year by 6.6%; unemployment dropped since 2002 from 10.9 to 7.5%; inflation stood at 1.1%, and interest rates sank below the U.S. Federal Reserve's level. An economic miracle has turned the Jewish state into the developed world's fastest-growing economy. Structurally, Israel launched in 2003 market reforms that shook the economy loose: Taxes were cut, public-sector hiring was capped, and an elaborate social safety net was slashed; the jobless were enticed to seek work rather than social security; almost any sellable state asset was sold, from the El Al airliner and the ZIM shipping giant to the major banks, oil refineries and telecom monopoly Bezeq; the seaports were forced to compete with one another; the pension age was raised, and the pension industry itself was snatched from the unions. As it turned out, Israel's lack of natural resources, like Japan's, was a blessing, as it forced it to seek wealth in human brains rather than natural resources. The bottom line of all this is that there are ways to thrive in the Middle East, even without oil. It would help if objective parties, such as the EU and UN, would tell Arab governments that their economic condition is self-inflicted and treatable; all they need to do is look at Israel a little less emotionally and learn from its efforts.
2007-09-07 01:00:00
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