Economy, Politics


What would peaceful relations between you and your neighboring countries do for you as a country in terms of benefits such as economic growth?

The answer to that question remains unanswered for Israel that stands not benefit from the opportunity of having neighbors that are well capable of pushing higher up the economic scale due to insecurity related issues.

Peace and security for trade

Around the world, trade relations among geographically neighboring countries are usually key for business growth and increased opportunities. World Bank established that Israel exist potential permanent benefits in economic growth if there were to be peaceful relations with the neighbors, increasing investments and trade within the region. Israel is a high producing country in terms of agriculture, natural gas and technology which are high in demand from the surrounding county markets.

Policy makers & business leaders meet at Eli Hurvitz Conference in Jerusalem, June 19 (Shoshanna Solomon/Times of Israel)

Such markets remain untapped with the country’s trading activities being maintained only with the European Union, Asia and the US driven by lack of peace by the neighboring Arab countries and Palestinian conflicts.


Across the borders

The US recognizes this and is actively involved in peaceful negotiations between Israel and its neighbors with the US president’s Donald Trump son-in-law, Jared Kushner, being in the front line of the negotiations.

US President Donald Trump’s son-in-law and chief Middle East adviser, Jared Kushner, left, meets with Prime Minister Benjamin Netanyahu at his office in Jerusalem on June 21, 2017. (Amos Ben Gershom)

Despite Israel being among the lowest in the production sector among the OECD countries, the country had made a remarkable 4 percent growth increase in economy. This was achieved through increased investments consumer spending and exports. Growth has tremendously decreased in the high-tech sector which had been the main economic contributor.



Israel’s economy at a drift

According to policy makers who gathered for the Eli Hurvitz Conference on Economy and Society together with business leaders in Jerusalem this week, there is a development in Israel’s economy with two drifting economies, that is, the traditional economy and the innovation economy. The divergence has to be stopped and can be done so through improved vocational training education.

According to Lopez-Claros, an employee of World Bank, resolving the current security situation could potentially drive economy higher through increased trade and investment, but in doing so, it should also maintain the ongoing trade relations with its current trade countries, that is, US Europe and Asia maintaining them as important markets.

Looking back 20-25 years, Israel is fairing rather much better now than it was doing then. Apart from becoming a technological powerhouse, there is improved infrastructure in the country. But the thing is, with peaceful interactions between neighboring countries, trade would thrive much more and this would enhance prosperity in the country even the more.

Through peaceful relations with the neighbors, the country could focus its resources to other state important investments such as in education to meet the growing demand for digitization in development as well as automation.


Getting Israel to the top

A global problem in the education is also faced by the country. There exists a gap that needs bridging between what universities are delivering and what is needed in which others countries are doing better at such as the Scandinavian countries.

Collaboration between industries and universities could ensure that students are well equipped with market demands. This can be achieved through enrollment of students in industries during holidays. Lopez-Carlos says this already happening but there is need for more.

Currently, Israel stands at position 52 out of 190 according to a 2107 report, Doing Business, by World Bank. The country is expected to do much better than this and be in leading positions but a number of issues tend to be associated to this.

Such is the business regulation that tends to create an unfavorable environment for businesses that are less bureaucratic and less costly

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