The Land of Jewish
Let’s find out if Economy of Israel is as Rich as its History!
When you think of Israel, what comes to mind? Religious history, rich culture, historic locations? Full of abundance and luxury, Economy of Israel is reflected by the country to anyone walking down the streets of its cities.
The only Jewish nation in the world has played a huge role in global international affairs, and with such a strong economy, notable landmarks, and major cultural significance, it has made its way into the hearts of millions.
Israel ranks high among other countries when it comes to education, life expectancy, innovativeness, research and development, and happiness, and it also offers the highest standard of living in the Middle East. We’re going to take a deep dive into this magnificent nation and talk about the affluence of Israel, but first we’re going to go through its background to understand what led to its incredible wealth and power.
- Overview
- How Israel Became Rich
- Why Are the Rich Drawn to Israel?
- Business and Technology in Israel
- Luxurious Spots in Israel
- Conclusion
1. Overview
Israel is known for its strong economy and important international relations, but not everyone knows the history of Israel and how this small Mediterranean country became what it is today. Israel is a small and relatively young country, yet it actually has had a long, very turbulent history.
The modern country of Israel is the Jewish state. But it is also home to the Jewish nation, a nation with a very long history. Modern Jews are descended from the Israelites who lived in this land over 2000 years ago. The Israelites were conquered by others and exiled from their land more than once in their history. The most recent exile was in 70 BCE. They then spent two millennia longing to return to their homeland. During World War I, the Zionists arose and began their quest to regain the Jewish homeland.
The Zionist movement is a nationalist movement that believes Israel is and should be the homeland of the Jews. When the Zionists arose, the British governed the land, which was then known as Palestine. The Zionists pressured the British for recognition of Palestine as an independent Jewish state.
Yet it was still some time before Israel became a modern country. Finally, Israel became an independent country in 1948. This is why Israel is a very old nation, even though the modern country of Israel is very young.
One of the reasons why Israel has become successful is the fact that in recent years it has become home to some of the most successful start-ups and entrepreneurial ventures, which now means that billions are generated there. Another reason why this alluring country is so rich is the diamond market of Tel Aviv and massive gas fields in the eastern part of the Mediterranean Sea, which generate billions of dollars each year.
All of these things attract rich people from all around the world to invest in the markets in this county. Tourism is also a big piece of the income coming into the country each year, but that’s not the whole story. Let’s see what brought this nation to where it is today.
2. How Israel Became Rich
Israel wasn’t always a perfect paradise for those with account balances in the millions. Earlier in the history of the country, it was struggling. Especially back in the early 1980s, life in Israel could be compared to a modern-day third world country. The economy was weak with an inflation rate of about 450%, even reaching the mind-blowing high of 950% at one point. Israel was on the verge of bankruptcy and overall economic destruction. Investors backed away and a major banking crisis made it questionable whether Israel could pay off their foreign debt.
In 1985, prominent Israeli leaders gathered to solve the issue of the collapsing economy. They came up with a deal that lowered government spending, devalued the currency, privatized many government-owned businesses, and imposed price controls over a vast range of products and services.
This was the first step of recovering the economy. After getting inflation under control, foreign investors started to come back and invest in Israel’s growing markets. This enabled Israel to get back on its feet and reestablish economic prosperity.
Not long after 1985, the Soviet Union began to collapse, and the majority of Soviet Jews chose to migrate to Israel. With Jews coming from Russia and other ex-Soviet states, there was an increase in the working population with high education levels, unlike most of the native population that was relatively uneducated at the time.
With the government controlling the economy, investors coming back, and highly educated immigrants, Israel became a heaven for start-ups and entrepreneurs as it had everything these groups needed – a stable economy, technological development, and an educated populace. And there are other reasons the rich are attracted to the state as well.
3. Why Are the Rich Drawn to Israel?
Israel has a lot of things to offer, including grand landmarks of magnificent cultural significance, a growing market of start-ups, and an ideal environment for investors looking for technological development, and beautiful cities and countryside pulling in millions of tourists each year. In 2019, with around 9 million people living in Israel, the country has more millionaires than at any other time period, and that number will keep on growing.
Apart from the tourism industry and the diamond and gas markets, one of the main reasons why rich people come to Israel is to start businesses to generate more money. Israeli law imposes loose regulations, and the government of Israel is generous towards new businesses, offering big grants, so the decision to come to Israel has more advantages than almost any country in the world.
When opening a business in Israel, business owners can get from 2 to 15 years of tax breaks. It’s every business owner’s dream not to pay full taxes, so it’s obvious why Israel is like a paradise for millionaires looking for a place to invest and have stable businesses and thereby hold onto their wealth for as long as possible.
4. Business and Technology in Israel
The economic state of Israel is clear; their economic power is rising, and within a few years it might stand next to the USA and China, two of the biggest economic forces in the world. Something that can’t be overlooked when talking about the economy and the development of Israel is technology.
High-technology is one of the country’s major economic sectors. Businesses are increasing their investments in technology more and more, which is one of the reasons why the business community of Israel is so well developed. The country has also become a great place for start-ups, especially high-technology companies.
With local businesses investing so much in technology, in 2019 Israel was ranked as the world’s fifth most innovative country. To understand the bigger picture, you need to know that there are 140 scientists and technicians per 10,000 employees, which is one of the highest ratios in the world. In the US there are 85 per 10,000 and in Japan it is 83 per 10,000. Now we are ready to answer the question of the day.
5. How Rich Is Israel?
The World Bank states that Israel a high-income country. Its standard of living is significantly higher when compared to most other countries in the same region. In fact, its standard of living is comparable to that of many other highly developed countries.
When defining the wealth of a country, there are several factors that should be considered. The first is definitely the GDP per capita, which in 2018 was 41,164 dollars, and this number has risen over time, so it’s safe to say that the number will keep on rising. This is very close to other powerful economies of the world.
In 2018, Japan’s GDP per capita was 39,295 dollars and the UK’s GDP per capita was 42,442 dollars, which is just a little bit higher than Israel’s. Israel’s overall GDP was 369.69 billion dollars in 2018. This represents the 32nd-largest economy in the world.
These statistics are a reflection of the country’s wealth, but there is another thing that should be taken into account. There are 2,153 international billionaires in the world by the latest count in 2019, and 21 billionaires are Israelis. Besides billionaires, Israel has a rough estimate of 105,000 multi-millionaires living and working there. To put this in perspective, Tel Aviv is ranked the number six city worldwide with the most millionaires per square mile, ranking above cities such as New York, London, Miami, Hong Kong and Singapore, which have been consistently included in such lists.
6. Conclusion
Israel is definitely a place for anyone who wants to increase their wealth by investing in businesses or even starting a new business. The laws and policies are tempting for anyone who wants to get a tax break, so it is no wonder more and more business-oriented millionaires are choosing Israel as their go-to place. Also, with debt that’s diminishing as the years go by and the fantastic opportunities for business owners, it looks like Israel will be maintaining its lure for millionaires for many years to come and will only grow in terms of wealth year after year.
