Travel Reference
In-Depth Information
Yet this is only the beginning of a list of Israel's economic handicaps. Diverse languages and
customs added to the diffi culties. There was no industrial or scientifi c-technical base. Potential
trading partners were intimidated by the Arab economic boycott. And because Israel had a
small, non-affl uent population, it lacked the internal market necessary to build heavy industry
or even to mass-produce items at prices lower than it would cost to import them.
In addition, a considerable portion of the population
—
the Haredim, often called “ultra-
Orthodox,” though this label is misleading
—
has a low level of employment due to the group's
deliberate rejection of modern education on secular subjects and the preference of its men to
engage in lifelong religious studies.
Few countries in the world, especially among those established after World War II, have
succeeded in building stable democratic or economically advanced societies. Yet despite far
more handicaps than others, Israel has risen to rank among the most advanced states in terms
of its economy, living standards, freedom, and society. In 2010, this standing was certifi ed by
its admission to the Organization for Economic Cooperation and Development (OECD), the
group involving the most advanced and stable economies.
How can Israel's dramatic progress be explained? It came about mainly because the found-
ers of the state followed a successful strategy and because their successors were willing and
able to abandon it. The fi rst era of development, dominated by a socialist approach, began
before the state's establishment in 1948 with what is called in Hebrew “the state in the mak-
ing,” or, more literally, “the state on the road.” A tremendous amount of planning and well-
coordinated effort took place during the early years.
To establish an agricultural base involved the creation of not only the kibbutz and the
moshav as ways to organize farming settlements and production but also a wide range of co-
operative marketing and processing enterprises based on voluntary participation rather than
coercion. Today these institutions involve a small percentage of the population, but they are
responsible for a disproportionately large share of the national production, and without them,
later steps would not have been possible.
Cooperative and other institutions were part of a conscious effort at social engineering. If,
as the old Zionist slogan put it, the Jewish immigrants were coming to “build and be built,”
signifi cant attitudinal shifts were required. One of these was to accept the nobility of physical
labor. Another was to embrace the need to sacrifi ce individual interests for group needs. Those
building a state saw themselves as transforming tradition-bound Jewish shopkeepers, artisans,
merchants, and religious students into bold pioneers, warriors, and workers. Although the
more romantic and utopian aspects of this ambitious program were not achieved, the basic
occupational, psychological, and practical goals largely were.
Still, when Israel gained independence, it was basically a Third World country. The early
years were marked by strategic pressures, massive immigration, housing shortages, and aus-
terity, all of which made development diffi cult. One percent of Israel's population was killed
during the War of Independence. For years afterward, there was rationing, as hundreds of
thousands of refugees came from Europe and hundreds of thousands more came from the
Middle East, most arriving with little more than the clothes on their backs.
Out of both design and necessity, the emphasis in building an economy was put on in-
novation, technology, and fl exibility. The idea was to develop appropriate solutions for Israel
