Israel: Challenges to Identity, Democracy, and the State

By Clive Jones; Emma C. Murphy | Go to book overview

3

Trials, triumphs and tigers

Introduction

In the early 1990s, the Israeli economy was being described by many analysts as an emerging tiger economy. Rapid growth, diversified exports, a technology-intensive industrial base, a thriving stock market, an extensive liberalisation programme and a per capita GDP comparable to the margins of Western Europe, 1 all fuelled arguments that this was a mature postindustrial economy on the verge of taking off. A slow-down in activity in the mid-1990s was attributed largely (but incorrectly) to the stalling of the Arab-Israeli peace process, but there can be little doubt that the overall performance of the Israeli economy over the past 50 years has been profoundly impressive. The path to economic prosperity has not, however, been smooth. Indeed, Israel's economy has suffered from severe structural weaknesses for most of its life, some of them remaining to this day. The principal reason for this has been that economic policy has always been determined first and foremost according to political objectives. The two most significant imperatives have been the desire to absorb relatively enormous numbers of immigrants while maintaining a standard of living that is high enough to attract and keep those new arrivals, and the need to maintain high levels of defence expenditure to ensure the security of the state. That having been said, economic policy was low on the list of priorities for Israel's politicians until well into the mid-1980s. For the most part, Israeli public debate has been traditionally dominated by security issues. Economics was not on the political agendas of politicians until the crisis that found its expression in terrifying hyper-inflation. Economic concerns have since played a strong role in election outcomes, although prime ministers still tend to 'observe an unstated tradition of lack of interest in economic matters'. 2

At the regional level Israel stands out from its neighbours to the extent that Arab fear of Israeli economic domination has been a contributing factor to the failure to realise any meaningful comprehensive regional co-operation, let alone integration. Growth of the Zionist economy has been achieved in spite of-one might almost argue because of-the comprehensive boycott imposed by Arab and Muslim states after 1949. Deprived of

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Israel: Challenges to Identity, Democracy, and the State
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Tables ix
  • Preface xix
  • Glossary xxiii
  • 1 - The Weight of History 1
  • 2 - Political Structures and Social Processes 31
  • 3 - Trials, Triumphs and Tigers 61
  • 4 - A Place Among the Nations 91
  • 5 - Conclusion 123
  • 6 - Epilogue 133
  • Select Bibliography 137
  • Index 143
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