Israel is a small country of 9 million people, with a landmass of 20,22,145 km2 – about the size of Cross River State. Most of the country is desert, with little or no natural resources. Within 70 years, however, the desert has been transformed into a blooming garden, with flourishing cities such as Jerusalem, Tel Aviv and Haifa. Israel is a prosperous democracy and a world leader in several technological fields.
With a GDP of $387.7 billion and per capita income of $42,823, Israel is way ahead of Nigeria, a resource-rich country of 206 million people. Israel scores impressively on the Human Development Index, with 0.919; coming 9th place out of 189 countries. Nigeria is a monocultural, oil-dependent rentier economy. Israel, on the other hand, is an advanced industrial, diversified economy. In September 2010, Israel acceded to membership of the Paris-based OECD, popularly known as “the rich man’s club”. The country was praised for its technological progress and for producing “outstanding outcomes on a world scale”.
Let me also put my cards on the table. I have been rather critical of Israeli policies towards their Palestinian neighbours. My natural instinct and social-democratic convictions have always been to stand by the small guy against the fat bully. But I am also a realist. I know that the state of Israel has always been at the receiving end of violent attacks from its Arab neighbours since its emergence as a sovereign state in May 1948. They have had to arm themselves to the teeth in order to survive; surrounded as they have been by a sea of 300 million murderously hostile Arabs. Following the Biblical injunction, I, too, have prayed for the peace of Jerusalem in my dawn watches.
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I love Eretz Yisrael. I abhor anti-Semitism, which I consider to be one of the great evils of our time. I have been influenced by Jewish thinkers and Hasidic mystics for as long as I can. I have been on personal terms with the world-renowned Franco-Jewish public intellectual and philosopher Bernard Henri-Lévy. I believe in the Jewish ethics of Vivek Olam – the call made on humanity to perfect this world.
I see parallels between the history of the Jews and Africans. There is a similarity in our suffering and humiliation. But unlike us, the Jews do not wallow in self-pity. Adolf Hitler and the Nazis slaughtered 6.5 million of them during the Shoah. But they have emerged stronger and better. They have forgiven, but they have never forgotten. The Jews, of all people, have the longest historical memory, if we are to believe Nobel laureate Elie Wiesel.
The late Kenyan political scientist Ali al-Amin Mazrui enjoined us to embrace “the Talmudic tradition” as a vehicle for African emancipation. By “the Talmudic tradition”, Mazrui meant the reverence for learning and the rigorous pursuit of spiritual and ethical values that has been at the heart of Jewish culture and civilisation since time immemorial. As a teenager, my tears used to wet the pages of the incredible tales of the Warsaw ghettos in the novels of Nobel laureate Isaac Bashevis Singer. Throughout their long night of persecution, they always kept alight the flame of hope. The places of honour in Jewish culture are always reserved, not for the moneybag, but for the man of learning and piety; a tradition they have preserved from Maimonides to Yitzhak Kaduri and Adin Steinsaltz.
Israel started off from very poor beginnings. From the turn of the last century, every European pogrom or international war pushed thousands of Jewish refugees into British-occupied Palestine. Most arrived poor and penniless. Life was hard in their new desert homeland; worsened by regular skirmishes with hostile Bedouins and wild Arab tribesmen. They formed themselves into kibbutzim cooperatives; a form of socialist movement that has made Israel the staunchly egalitarian society that it is today.
An institution particularly unique to Israel is the Histadrut, the labour-union movement that doubles as a cooperative and welfare agency.
They also formed, if truth be told, the Haganah terrorist militia that spearheaded the struggle for independence. Its warlords included Menachem Begin and Meir Har-Zion, arguably the greatest military hero in the history of the Jewish state.
After Declaration of Independence on 14 May 1948, the new state benefitted considerably from military assistance as well as official development assistance (ODA) from the United States. The German government has also made restitution payments, estimated at a staggering $111 billion. The Jewish Diaspora also contributed a lot of financial resources to the development of the new state. Such capital inflows went a long way in helping the new state consolidate itself economically.
Despite the war and conflicts, during the first two decades, economic growth averaged 11 percent annually, while per capita income grew by an annual average of 6 percent. From the seventies onwards, there were massive fluctuations in economic growth, occasioned by issues of war and insecurity and rising waves of migrants from the Soviet Union, Eastern Europe and the Maghrib. The economic costs of absorbing new migrants weighed heavily on the national budget, in addition to resources needed for national defence.
The 1980s witnessed a period of hyperinflation that soared to a high of 400 percent. By 1985, a drastic stabilisation policy had to be implemented, together with deregulation and market-friendly reforms. Monetary policy was overhauled and the bloated welfare system was tamed. From 1990 to 2000, inflation came down to below 4 percent. Subsidies on poor-performing enterprises were removed. Trade agreements were reached with North America and the EU, which contributed to boosting exports.
The central bank was granted autonomy, with the great economist Stanley Fischer as Governor. A hero of mine, Stanley Fischer strengthened the national currency — the shekel — while pursuing monetary policies that have brought credibility to macroeconomic policy management; setting the country on the path of long-term prosperity.
In the next article we explore the why and how of Israeli economic success and the lessons to be learned. Shalom!
