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Economy of Israel

The economy of Israel is technologically advanced by global standards. As of 2015, Israel ranks in the top 18 nations in the world on the UN's Human Development Index, which places it in the category of "Very Highly Developed" the highest ranked in the Middle East, and even surpassing European countries such as Austria, France and Finland.

The major industrial sectors include high-technology products, metal products, electronic and biomedical equipment, agricultural products, processed foods, chemicals, pharmaceuticals, and transport equipment; the Israeli diamond industry is one of the world's centers for diamond cutting and polishing. Relatively poor in natural resources, Israel depends on imports of petroleum, raw materials, wheat, motor vehicles, uncut diamonds and production inputs, though the country's nearly total reliance on energy imports may change with recent discoveries of large natural gas reserves off its coast on the one hand and the leading role of the Israeli solar energy industry on the other. Israel is active in software, telecommunication and semiconductors development.

The country was the destination for Berkshire Hathaway's first investment outside the United States when it purchased ISCAR Metalworking, and the first research and development centers outside the United States for companies including Intel, Microsoft, and Apple. American business magnates and investors Bill Gates, Warren Buffett, Donald Trump as well as Mexican business magnate Carlos Slim have each praised Israel's economy and each entrepreneur has invested heavily in numerous Israeli industries that include real estate, high technology, and manufacturing beyond their traditional business activities and investments back in their home nations. Israel is also a major tourist destination, with 3.54 million foreign tourists visiting it in 2013.

Sectors

Agriculture

2.8% of the country's GDP is derived from agriculture. Of a total labour force of 2.7 million, 2.6% are employed in agricultural production while 6.3% in services for agriculture. While Israel imports substantial quantities of grain (approximately 80% of local consumption), it is largely self-sufficient in other agricultural products and food stuffs. The country exports more than $1.3 billion worth of agricultural products every year, including farm produce as well as $1.2 billion worth of agricultural inputs and technology.

Financial sector

Israel has over 100 active funds operating throughout the country with $10 billion under management. In 2004, international foreign funds from various nations around the world committed over 50% of the total dollars invested exemplifying the country's strong and sound reputation as an internationally sought after foreign investment by many countries. The ever growing hedge fund industry in Israel is also attracting a myriad of investors from around the world, particularly from the United States.

Technology sector

Science and technology in Israel is one of the country's most highly developed and industrialized sectors. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development (R&D) in relation to gross domestic product (GDP), is amongst the highest in the world.

Israel also remains of the largest centers in the world for technology start-up enterprises. 200 start-ups are created annually and more than 2500 start-up companies are operating throughout the country.

Energy

Historically, Israel relied on external imports for meeting most of its energy needs, spending an amount equivalent to over 5% of its GDP per year in 2009 on imports of energy products.

Natural gas

At the time however, there were no domestic sources of natural gas and the expectation was that gas would be supplied from overseas in the form of LNG and by a future pipeline from Egypt (which eventually became the Arish-Ashkelon pipeline). Plans were made for the Israel Electric Corporation to construct several gas-driven power plants, for erecting a national gas distribution grid, and for an LNG import terminal.

Gas discoveries

An article in The Economist stated that Israel had "verified" gas finds of 35 trillion cubic feet as of early 2014. The US Energy Information Administration listed Israel as having 7.0 trillion cubic feet of proved reserves as of 1 January 2015.

The Tamar field began commercial production on 30 March 2013 after four years of extensive development works. The supply of gas from Tamar is expected to provide a boost to the Israeli economy, which has suffered losses of more than NIS20 billion between 2011 and 2013 resulting from the disruption of gas supplies from neighbouring Egypt (and which are not expected to resume due to Egypt's decision to indefinitely suspend its gas supply agreement to Israel).

Solar power

Solar power in Israel and the Israeli solar energy industry has a history that dates to the founding of the country. Israeli engineers are on the cutting edge of solar energy technology, and its solar companies work on projects around the world.

Industrial sector

Israel has a well-developed chemical industry with many of its products aimed at the export market. Israel Chemicals is one of largest fertilizer and chemical companies in Israel and its subsidiary, the Dead Sea Works in Sdom is the world's fourth largest producer and supplier of potash products. The company also produces other products such as magnesium chloride, industrial salts, de-icers, bath salts, table salt, and raw materials for the cosmetic industry. It specializes in generic and proprietary pharmaceuticals and active pharmaceutical ingredients. It is the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide.

Diamond industry

Israel is one of the world's three major centers for polished diamonds, alongside Belgium and India. Israel's net polished diamond exports slid 22.8 percent in 2012 as polished diamond exports fell to $5.56 billion from $7.2 billion in 2011. Net exports of rough diamonds dropped 20.1 percent to $2.8 billion and net exports of polished diamonds slipped 24.9 percent to $4.3 billion, while net rough diamond imports dropped 12.9 percent to $3.8 billion.

Defence industry

Israel is one of the world's major exporters of military equipment, accounting for 10% of the world total in 2007. The Defence industry in Israel is a strategically important sector and a large employer within the country. It is also a major player in the global arms market and is the 11th largest arms exporter in the world as of 2012. India is also major country for Israeli arms exports and has remained Israel's largest arms market in the world.

Tourism

Tourism is one of Israel's major sources of income and economic growth engine in the country, attracting 3.54 million foreign tourists in 2013, averaging a 2.5 percent growth since 2008 and representing a 3 percent increase since 2012 making it an all-time record.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Israel"

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