Israel

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General Information

The territories occupied by Israel since the 1967 war are not included in the Israel country profile, unless otherwise noted. In keeping with the framework established at the [Madrid Conference]? in October 1991, bilateral negotiations are being conducted between Israel and Palestinian representatives (from the Israeli-occupied West Bank and Gaza Strip) and Israel and Syria, to achieve a permanent settlement. On 25 April 1982, Israel withdrew from the Sinai Peninsula pursuant to the 1979 [Israel-Egypt Peace Treaty]?. Outstanding territorial and other disputes with Jordan were resolved in the 26 October 1994 [Israel-Jordan Treaty of Peace]?.

Israel has a technologically advanced market economy with substantial government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel is largely self-sufficient in food production except for grains. Diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are leading exports. Israel usually posts sizable current account deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, which is its major source of economic and military aid. The influx of Jewish immigrants from the former USSR topped 750,000 during the period 1989-99, bringing the population of Israel from the former Soviet Union to 1 million, one-sixth of the total population, and adding scientific and professional expertise of substantial value for the economy's future. The influx, coupled with the opening of new markets at the end of the Cold War, energized Israel's economy, which grew rapidly in the early 1990s. But growth began slowing in 1996 when the government imposed tighter fiscal and monetary policies and the immigration bonus petered out. Those policies brought inflation down to record low levels in 1999 and, coupled with improved prospects for the Middle East peace process, are creating a climate for stronger GDP growth in the year 2000.

Originally from the CIA World Factbook 2000 and the U.S. Department of State website.