Israel is a nation known for its remarkable military capabilities and a robust economy. Recent events have tested the resilience of this dynamic country, but the core principles of innovation and economic partnership remain unwavering.
Last October 7, Israel faced a severe attack by the terrorist organization Hamas. Currently, Israel is at war with a murderous terrorist organization, which uses intimidation tactics both towards its own population and towards Western countries to deny the State of Israel the legitimacy to act. Considering this situation, it is important to reaffirm the interplay between Israel’s security concerns and its economic vitality.
Despite the harsh outlook of this conflict, Israel continues to have a strong military and economy, which shall endure after the war ends, remaining the number one source of innovation in the world. Investing in Israel was profitable before October 7 and will continue to be very profitable even after.
The Israeli government remains fully functional even in these trying times. The Ministry of Economy and Industry, alongside other government agencies, have already started working on suitable programs to mitigate the economic impact of the conflict. Also, the Foreign Trade Administration continues to operate, which means that there has not been a pause for international trade issues, ensuring the continuity of export and import contracts.
Over the past few years, Israel has experienced a change in its economic landscape. From 2002 to the present, Israel’s GDP has experienced a threefold increase, pointing out its impressive capability, even when confronted with various challenges. In 2021, for the first time, exports of services surpassed exports of goods. This transformation highlights Israel’s growing prowess in the services sector, especially in high-tech industries. Moreover, thanks to the high level of economic activity in the pre-war periods, numerous Israeli companies are experts in international trade and have the capacity to deal with any matter remotely, which makes them resilient even in times of distress.
It is also essential to mention that, in Israel, there are collaborative organizations, such as the Export Institute, whose objective is to address the specific challenges that companies may face during the export process. Through these resources, companies are able to maintain their partnerships and collaborations with customers and investors.
Israel’s resilience, measured both in terms of its military strength and its economy, has been put to the test in numerous security events in the past. Yet on each occasion, Israel has emerged victorious, experiencing a full economic recovery and positive growth rates within months of these events.
Prior to the outbreak of the recent conflict, Israel enjoyed a budget surplus and substantial foreign exchange balances, which will stabilize.
Despite the current security situation, Israel’s financial and banking systems continue to operate normally, and transactions are proceeding accordingly. It is important to highlight that Moody’s, the global credit rating agency, has postponed the publication of the report on Israel’s credit rating, which indicates confidence in the country’s financial stability.
This aligns with Israel’s previous economic behavior. Throughout the years, foreign direct investments (FDI) in Israel have been somewhat affected by global events; such as the collapse of the dot-com bubble in the early 2000s, the 2008 economic crisis and the outbreak of the Covid-19 epidemic in late 2019. Notwithstanding, the global influences and the potential impact of security developments in Israel on foreign investments, the flow of FDI into Israel is continuously recovering, reaching new highs in the last few years.
Israel is standing strong, and will continue to do so as an economic power in the Middle East, being recognized globally as the Start Up Nation and the number one source of innovation. Companies from around the world have chosen to invest in Israel, acknowledging the nation’s democratic values, commitment to progress, and innovative spirit. Now, more than ever, is the time to invest in Israel.
As has been proven many times in Israel’s history, times of crisis can in fact be followed by opportunities, and even through difficulties good opportunities and innovative solutions can arise. The perfect example is that, over the years, going back even to the conflicts of 2006, 2008, 2012, 2014 and 2021, Israeli exports have shown significant growth over the years. Conspicuously, the regional security challenges have had a very limited impact on Israel’s economic stability. The Israeli technology ecosystem and its companies have shown remarkable resourcefulness, offering technological solutions to meet both the immediate challenges on the front line and the economic challenges in the aftermath, both nationally and globally.
In conclusion, Israel remains unwavering in its pursuit of economic strength and innovation, even in the face of security threats. As the nation balances the need to tackle security issues with economic resilience, it embraces investment from global partners who recognize the remarkable potential Israel has to offer. Building on a rich history of overcoming adversity and a thriving ecosystem for innovation, Israel continues to lead by shaping the world’s future.
Oficina Comercial de Israel en Mexico