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April 29, 2021 11:42 am

More Than Oranges: The Continuing Success of the Israeli Economy

avatar by Jacob Sivak


The lobby of Tel Aviv’s stock exchange. Photo: Wikimedia Commons.

Growing up in Montreal in the 1950s and 1960s in a Zionist household meant being aware of the precarious nature of the Israeli economy and of the obligation of Jews in the Diaspora to assist Israel financially.

This took place in various ways — by donating directly to one or more of several deserving charitable projects, buying Israeli bonds, supporting the Jewish National Fund by purchasing trees. Another way of supporting the Israeli economy was to purchase Israeli products, and when I was young, this often meant buying the Jaffa oranges that were on display in our local supermarkets. (I was surprised to learn that Jaffa oranges from Mandatory Palestine were first shipped to Montreal as early as 1928).

I still look for Israeli produce when I am food shopping, but in recent years, the Israeli economy has been growing by leaps and bounds. And while it is still important insofar as providing Israel with food security, the agricultural sector represents only about 2.5 percent of the overall economy today. It is the growth of the technology sector that has been mainly responsible for Israel’s economic strength.

I have been following these developments by keeping an eye on the yearly economic statistics provided by the International Monetary Fund (IMF), and I was shocked to discover that recent IMF numbers indicate that on the basis of per capita gross domestic product (GDP), Israel ranks number 19 in the world, ahead of countries such as New Zealand, the United Kingdom, France, and Japan. My own country, Canada, is number 18.

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There is every indication that the current momentum will continue and possibly accelerate, in part because of the economic promise of the recently concluded Abraham Accords. And despite its tragic impact on the world, the COVID-19 crisis has created new opportunities for the Israeli technology sector. While all economies have contracted as a result of COVID, the Israeli economy has been less affected than others. The 2.5 percent reduction of the Israeli economy in 2020 is about half that experienced by the Canadian economy, for example; and hardly a week goes by without the announcement of a new Israeli technology advance related to COVID — be it a new oral vaccine with a wider spectrum of virus fighting ability than current vaccines, to new and simplified means of testing for the virus, to the design of new and more effective protective masks, to new communication technologies developed in response to COVID.

My first and longest trip to Israel was a year-long sabbatical stay with my family in 1978-1979. Both my late wife and I felt comfortable and at home, and seriously considered making aliyah. In the end, we didn’t — a decision I sometimes regret. Our decision was based on many factors, primary of which was the difficulty in leaving family behind, especially our parents. But I know that another factor was that at the time, there was a sizable difference in Canadian and Israeli living standards. Today, that is not really the case.

Finally, it would be irresponsible not to mention that the success of the Israeli economy has not benefited everyone in Israeli society — as in the case of other technology-driven economies, the gap between the haves and the “have-nots” has increased alarmingly.

The challenge in all of these cases, including Israel, is to find a way to mitigate these disparities by encouraging a wider range of participation in the new economy and by providing fair and effective safety nets for those who fall by the wayside.

Jacob Sivak, elected a Fellow of the Royal Society of Canada in 2002, is a retired professor in the School of Optometry, University of Waterloo.

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