The Surprises of the Economy of Israel

With Dan Catarivas



How could a small country, living in a situation of permanent threats, rise to such a level of creative performance in all areas of the economy? What is the secret? The major countries, Americans and Europeans are wondering how this people could find more effective, more refined … but also more economical ideas. And, recently, the Japanese and the Koreans who need a “plus” of creativity. Finally, the Chinese and Indians, and even the Russians, all launched in a race to catch up, come with the same question.

Israel is therefore courted, sought out as a partner, looked upon as a model. Its secrets are the surprises, revealed when questioning those who created the country (and many of whom are still active) and their successors who are in charge of its future.

Little was known about this European and Eastern country at the the crossroads of Europe, Asia and Africa.

Daniel Haber teaches Asian economies and how to deal with them across differences in culture.

Interested in understanding the Israeli economy, he did not find the proper, simple, clear and up-to-date book he was looking for, so he decided to write it.

With the help of Dan Catarivas, the International Executive Director of the Israeli Manufacturers Association, he interviewed the players themselves.

He met those earlier entrepreneurs who made Israel’s industrial base, the politicians and civil servants who managed to change the Israeli economic model and turn it into an effective machine to create wealth. He met also those younger businessmen, scientists, financiers who are behind the “Start Up Nation”.


pp. 226

First Surprise: that we talk economy about Israel

(Israel is usually a subject of geopolitics , war and terrorism)

Second Surprise: butter and guns

(Israel managed to give its people both a healthy and rich economy as well as a strong defense)

Third Surprise: shifting smoothly from Socialism to a Market economy

(Smart Israeli governments managed the transition from a protected, centralized economy to a full- fledged capitalist, open and competitive one)

Fourth Surprise: Israeli Agriculture is a High Tech sector

(Constant innovation brought the Israeli agriculture to the highest level of sophistication and productivity)

Fifth Surprise: Kibbutzim are still there

(They have changed , they have adjusted to the new background, but they survived a major crisis)

Sixth Surprise: factories are in the farms

(Most Kibbutzim are engaged in industry and High tech).

Seventh Surprise: Industry is powerful and diversified

(Israel, in spite of its small domestic base, managed to manufacture a large part of its basic needs and is exporting high value products and equipment)

Eighth Surprise: Israel hosts big capitalist families

(They own a large portion of the economy and are accused of monopolistic practices)

Ninth Surprise: Israel is a key High Tech world hub

(The” Start Up Nation” is therefore attracting interest from all parts of the world)

Tenth Surprise: Israel is a space power

(Israel is among 9 countries in the world with a capacity to launch home-made satellites)

Eleventh Surprise: Israel is a nation of builders

(Infrastructure, buildings and major facilities are designed and built by domestic builders who also build overseas)

Twelfth Surprise: Jews are no longer what they used to be

(They are better in farming, industry, technology than in banking, trade and services)

Thirteenth Surprise : Negev did bloom

(Ben Gurion ‘s dream became a reality but what is coming next will pass beyond that dream)

Fourteenth Surprise: water is no longer a problem in Israel

(Israel has demonstrated that all solutions are on-hand and it is willing to share its technologies and know-how with all other nations, including its Arab neighbors)

Fifteenth Surprise: Israel faces acute social problems…and confront them

(Israel has a high index of social inequalities, due to two specific segments of society: Israeli Arabs and ultra-orthodox Jews who, together, make up one-third of the population. In this difficult context, Israel takes initiatives to change it)

Sixteenth Surprise: Israel is an island

(Regional trade is almost nil. Israel trades with the whole world, especially with the most advanced nations).

Seventeenth Surprise: present and tomorrow’s big powers are fond of Israel

(China and India lead the way to take advantage of Israel creative capacity to catch up with the West)

Last Surprise: we shall not conclude

(Confucius warned us: to conclude is to close a door. Israel is an open door to the future)

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