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Economics Dealing with Israel and Its Strategic Importance

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Economics Dealing with Israel and Its Strategic Importance

Israel is among the most developed countries in the world. The country got its independence in 1948. However, the economic development of the country was slowed by the high need to increase defense mechanism. The country spent a huge portion of its budget on funding its defense, which left very little for improving its economic development activities. However, the country has undergone serious revolutions in economic development, which has helped the country become a country with one of the most sophisticated economic advancements globally. Israel is ranked 22nd globally in terms of human development index with a high per capita income that surpasses many developed countries.

Dur to its rapid economic development and economic abilities characterized by low inflation index, it is one of the most preferred economic partners across the globe. Other development dimensions that make Israel a country of investment preference is its higher education that has promoted innovation. The country reported the highest per capital venture globally, which was 2.5 times that of the United States. As a result, the country has become one of the most preferred countries for bilateral trade activities and for investment opportunities across the globe.

This paper will evaluate economic dealings with Israel and their strategic importance to a country.

Problem Definition

Many countries are confronted with the problem of identifying economic partners in terms of trade, technology and other investment opportunities. While this has become an issue to many economies globally, it is important to select economic partners that will result in net positive gains to both countries. As a result, many countries will engage in economic activities with countries that have economic stability and inflation rates are low to avoid trading problems that arise as a result of high inflation.

Discussion

Therefore, Israel presents one of the best economic opportunities that other countries should take advantage of. The country presents one of the most advanced technology innovations in the world. According to Katz (2018), Israel has invested heavily in research and development, making it one of the best places for investment and technological diversification for many technologies driven businesses across the globe. The education system is also technology driven and provides one of the most competent workforces in the world. In fact, Israel is ranked second by the OECD in terms of education development. Additionally, investments are based on returns and performance, which made Israel outshine many developed economies. The stock market, which operates under the regulation of the Israel authorities has become stable, and preventing illegal trading activities such as money laundering and fraud (Gala et al.,2018). According to OECD, the observed stability in the Israel economy has been associated with strategic investment decisions. The country observed an increase foreign direct investments for the period after investment. However, the country has refocused its efforts to increase inward direct investments characterized by mergers and acquisition. As a result, the country has managed to avoid adverse economic disadvantages associated with dominating investment objectives that other countries may want to impose. The country has been able to achieve economic stability that other countries that seek to achieve similar benefits in their economic portfolio.

Personal Position

Israel is undoubtedly one of the most advanced economies globally. Technology is one of the key pillars of Israel economy that helps the country meet demands of modern economy through creation of a competitive advantage over other countries globally. Low inflation reported in Israel economy is an advantage to countries or economies that are wishing to invest in such countries. Many countries would like to invest in a country with low inflation because they are not likely to experience inflation associated with imported products. Therefore, trading with Israel has the benefit of achieving stable economy due to its low inflation levels. On the other hand, Israel is has invested in providing high quality educational services that have improved the quality of labor force. The country’s investment in research and development provides an opportunity for technology firms that are interested in investing in various technology driven business sectors. The company can take advantage of the highly trained and competent work force, who will help in development of competitive advantage. The stock market provides a stable investment platform for countries and firms that are willing to engage in business engagement. Encouraging the country to engage in inward ward direct investment has helped the country to avoid adverse inflationary effects associated with foreign investments. This offers an opportunity for other countries to enjoy a stable environment for doing business.

Conclusion

Economic dealings with Israel have many benefits to the country. The country enjoys significant advantage in terms of economic stability characterized by low inflation index. This provides significant opportunities to other countries that are aspiring to enter into trading engagements with Israel. There are strategic benefits that are associated with trading and investing in Israel such as access to highly qualified professionals, advancement technology and enjoy the benefits associated with low inflation rates. Therefore, any country or firm that has economic dealings with Israel will benefit significantly from these aspects.

References

Gala, V., Pagliardi, G., & Zenios, S. A. (2018). Politics, policy, and international stock peturns.

Katz, Y. (2018). Technology and innovation in Israel: advancing competitive position in a global environment. Open Journal of Political Science, 8(4), 536-546.

OECD. Accession of Israel to the OECD. Review of international investment policies. https://www.oecd.org/israel/49864025.pdf