Israel government called for early elections in April over the past week. The underlying reason? The reigning Prime Minister, who is expected to win these elections as well and break the record as the longest reigning leader in the history of the young and vibrant country, is accused of several cases of bribery and misconduct. His response? He goes on the offensive against the media, the attorney general, the investigative department of the national police force, and just about everyone else.
Israel's economy, which was considered one of the soundest economies over the past decade which overcame the 2008 subprime crisis and global recession with relative ease, may be put into the test.
The above is only a handful of what the Israeli economy has to constantly endure. The tiny nation is under constant security threats from its surrounding countries, as well as under serious criticism and condemnations by many nations and the UN. It does not take much for a full-fledge war to take place, and there is a tangible risk for a trade boycott. Israeli law also stipulates that certain segments of the population which are not taking part of the labour market out of choice, will be eligible for wealthcare benefits, and that weighs on its budget.
Additionally, the stock market has been stalling way behind world indices over the recent years as Israeli tech companies, one of the local backbones of economy, prefer to be traded on foreign stock markets. The local stock exchange hardly sees any IPOs and trading volumes are lowering by the year.
Under these conditions it may appear miraculously that the Israeli economy has gotten to where it is now, and that it continues to relatively thrive over the past decade. The Israeli Shekel demonstrates that perfectly by being one of the world's strongest currencies in the past year.
One major reason for Israel's success from back when it was established is the inflow of Jewish funds from abroad. Not only wealthy Jews across the world are donating to the nation and its establishments, but also many of them eventually move to Israel and bring all their assets with them. People like Roman Abramovich, the renowned oligarch has moved out of the UK to Israel in the past year only to buy a $100m boutique hotel and turn it into its local residence. International money transfers to Israel are frequent and often, large.
Another important reason is the entrepreneurial spirit. The Israeli culture encourages and nurtures entrepreneurship, and hence, this nation is considered among the top 5 globally when it comes to technology. Some of the world's largest tech companies were founded by Israelis, including the popular navigation app Waze, or Soda Stream which is still owned by Israelis and manufacturers in Israel.
Considering the fact the current PM Netanyahu is expected to win the next election with hands behind its back, and that presidents lashing out at the media don't see to make a dent on the economy, I think the Israeli economy in 2019 will be just fine.
