• GDP: US$129 billion (2004).
• Main exports: Machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel.
• Main imports: Raw materials, military equipment, investment goods, rough diamonds, fuel, grain and consumer goods.
• Main trade partners: USA, Belgium, Germany, Switzerland, UK and Hong Kong.

Israel has a diverse and sophisticated manufacturing economy that, in many respects, rivals that of western Europe (this much is recognised by the IMF which in 1997 reclassified Israel’s economy as ‘industrial’ rather than ‘developing’). Agriculture is relatively small – about 4.2 per cent of GDP – with citrus fruit as the main commodity and export earner. The industrial sector is concentrated on engineering, aircraft, electronics, chemicals, construction materials, textiles and food-processing. Mining is also small but set to expand through production of potash and bromine. There is a small indigenous oil industry. The infrastructure is well-developed and tourism, in which there has been considerable investment, has become an important sector of the economy.
Israel’s economic difficulties, which were particularly serious during the 1970s and 1980s, were largely the product of political circumstances: specifically very heavy defence expenditure (estimated at around 40 per cent of GDP) and the cost of resettling Jewish arrivals. Other important factors are a large and relatively inefficient state sector and a substantial annual aid package from the USA, estimated at around US$10 billion per year. Israel is the single largest recipient of US aid, which accounts for about 10 per cent of GDP. The economy performed relatively well during the 1990s in the wake of economic reforms introduced at the beginning of the decade, including deregulation and some privatisation. However, Israel was experiencing serious recession by 2000. This lasted until 2002 when the economy contracted by 1 per cent; since then a mild recovery has been under way: growth for 2003 was 0.8 per cent. However, given favourable conditions positive growth could return, but the outlook is heavily dependent on development in the conflict with the Palestinians and on political and security developments in the region more generally. Under the Sharon Government, economic reforms have continued unevenly, and it remains to be seen whether this will remain the case, with Sharon all but officially having stepped down as Prime Minister following his stroke in early January 2006. Israel has free trade agreements with the EU and the USA.
The areas under the control of the Palestinian Authority have not shared in Israeli prosperity; economic development under the Palestinian Authority was managed in a haphazard and often corrupt manner, especially regarding the use of foreign aid. Since the Sharon administration came to power in Israel, the Palestinian areas have been effectively sealed off; the wall currently under construction around the West Bank (at huge cost) merely confirms that strategic decision. Large areas under nominal Palestinian control have been completely destroyed and those remaining are barely able to function economically. Equally damaging, Palestinians with jobs in the Israeli territory have been unable to pursue them properly through punitive security measures. Much of the population now relies on assistance from aid organisations. Following the win of Hamas in Parliamentary elections in January 2006, and much condemnation worldwide of this militant Islamic party, it remains to be seen whether this much-needed financial aid continues or whether sanctions will be imposed.

Business can be frustrating, as in many instances it is difficult to get a direct reply to a question. Appointments are usual, as is the use of business cards. Normal courtesies should be observed, although business meetings tend to be less formal than in Britain. Office hours: Business hours vary owing to the different religions practised. Some offices are open half a day on Friday.

The Ministry of Tourism's brochure, Israel Conventions & Congresses 1996-2000, states that “about 2000 years ago, some of the greatest conventions were held near Tiberias where it was recorded that 5000 were amply catered for”. Israel’s record as a contemporary international conference centre began in 1963, and the country now attracts about 150 international meetings a year with 50,000 delegates; scientific and academic meetings account for about half the meetings, though religious and sporting events are on the increase. 55 per cent of meetings are held in Jerusalem. Apart from hotels and convention centres in Jerusalem, Eliat and Tel Aviv, opportunities also exist to hold meetings in kibbutzim.

Federation of Israeli Chambers of Commerce
PO Box 20027, 84 Haashmonaim Street, Tel Aviv 67132, Israel
Tel: (3) 563 1010.
Website: www.chamber.org.il

Jerusalem International Convention Centre (JICC)
Binyaney Ha’ooma, PO Box 6001, Jerusalem 91060, Israel
Tel: (2) 655 8558.
Website: www.iccjer.co.il

International Conventions Department – Ministry of Tourism
5 Bank Israel Street, B Genri Building, Jerusalem 91009, Israel
Tel: (2) 666 4200.
Website: www.tourism.gov.il