Israel, a newly born independent nation the size of New Jersey with a population of just 8.5 million, has become known as a start-up nation. The country’s innovative technology, increase in entrepreneurship, and education have even won Israel the title of “The New Silicon Valley in the Middle East” in recent years by Forbes magazine.[i]
According to the 2018 Congressional Research Service, to date the US has provided more than $134.7 billion in military and economic assistance to Israel, whose GDP has gone from a record low of $2.60 billion (USD) in 1962 to a projected GDP of $361 billion (USD) in 2018.[i]
Today, Israel is a pioneer in desert land restoration, as well as a key player in agricultural exports. Israel is by far the world leader in water recycling and the birthplace of the surface drip irrigation emitter.
History: The Humble Beginnings of Israel’s Economy
In the late 1800s, the Jewish people began migrating back to their homeland. As Jews continued to move back, the country’s social, political, and economic structure began to develop.
Many empires and governments put forth their best efforts to prevent the Jewish people’s return to their ancestral heritage, but they failed.
Throughout history, the Jewish people have demonstrated their ability to withstand incredible adversity and still emerge with strength and prosperity.
Aliyah
There is a series of six time periods of return, starting in 1882. These movements are referred to as Aliyahs, which means ‘ascent’ or ‘going up’ in Hebrew.
1st Aliyah (1882-1903)
- 35,000 Jews returned to Israel, mostly from Ottoman Empire.
- Pioneers set up towns such as Petah Tikvah, Rishon LeZion, and Zikhron Ya’akov.
2nd Aliyah (1904-1914)
- 40,000 Jews returned to Israel, mostly from Russia.
- The first kibbutz established in 1909 in Degania. The kibbutz became the livelihood of the earlier pioneers and the largest communal movement in history.
3rd Aliyah (1919-1923)
- 40,000 Jews returned to Israel.
- A major boom in the economy through agricultural production, which built up kibbutzim and subsidiary businesses.
4th Aliyah (1924-1929)
- 82,000 Jews returned to Israel.
- Most Jews who migrated home during this time were owners of small family businesses. This move rounded out the economy with a middle-class
5th Aliyah (1929-1939)
- 250,000 Jews returned to Israel, leading up to World War II. The most substantial number of immigrants to date.
- This group was primarily professionals, doctors, lawyers, and writers.
6th Aliyah—Aliyah Bet (1939-1948)
- This Aliyah was an unofficial move of Jewish immigrants.
- Holocaust survivors and Jewish refugees were not allowed to enter their homeland due to British intervention.
- 6 million Jews lost their lives in the Holocaust between 1941-1945.
- Israel gained independence on May 14, 1945.
In July of 1948, not long after Israel declared independence, several nations made Zionism a punishable crime. In some cases, Jews could be accused of being Zionists and persecuted despite lack of evidence or fair trials.
Some countries forbade the emigration of Jews because they did not want to enable the growth of Israel. Ironically, Israel continued to flourish.
In many of these locations, Jews held governmental positions and were business owners as well. Due to the persecution, various cities lost nearly a fourth of their labor force by removing the Jewish population’s right to work—this contributed to voids in these countries’ economies because there were simply not enough people to fill the positions.
Future: My Olive Tree and Israel’s Economy
My Olive Tree has been helping Israel's economy by planting and sustaining olive trees and grape vines in the Negev Desert—developing it, transforming it, and ultimately restoring it.
When My Olive Tree’s founder, Curt Landry, met with then Finance Minister, Benjamin Netanyahu in 2004, he expressed the desire for a long-term solution for the nation of Israel.
It was the principle of, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” The nation of Israel’s vision was bigger than merely receiving aid at the moment of need. Israeli leadership wanted more for their people. It was understood that for the economy to grow and flourish, there must be the following:
- Job opportunities
- Development of multiple industries
- Sustainable assets that mature over time
Because of our trusted relationship with the City of Jerusalem and the Israel Defense Forces (IDF)s, which controls the water resources in Israel, we have been able to plant olive trees and even grapevines across Israel’s land.
My Olive Tree is honored to provide trees or plant trees for kibbutz farmers. The farmers take over the care and production of the trees, and at 4 years old, the trees are ready for an oil harvest. The kibbutz farmers receive 100% of the profit from these harvests!
Other industries profit as well. A few examples are as follows:
- Companies that bottle the oil
- Companies that manufacture and sell the oil
- Businesses that transport the oil from the kibbutzim, or from manufacturers to stores
- Companies that provide labeling
- Agencies specializing in research and science
Getting back to our roots
With the building momentum of growth and prosperity, the first prime minister of Israel, David Ben-Gurion, became an early advocate for developing the largely unused regions of the country as well.
Today, the ideology of traditional kibbutzim is still present, yet functions slightly different. The concepts of communal ownership could not keep up with the growing population and economy.
While many Israelis are proud of the values of hard work and collective good, most kibbutzim have adopted privatized practices to thrive economically.
FAQs:
Q: What makes Israel’s economy so strong?
A: The Jewish people rebuilt their economy since their independence was based on solidarity and survival. They know that with a strong work ethic they will thrive. They also know that if they don’t stand together, surrounding enemies look for every opportunity to come against them.
As a result, their innovative technologies, such as fighter missiles and tanks, benefit them politically, as well as boost their economy. They place a high value on education and put their education back into business and the economy.
Q: How does Israel thrive in the desert?
A: The Negev Desert is the largest region in the nation of Israel. Irrigation has been dug in the northwest corner of the Negev for agricultural purposes. The soil is filled with trace minerals such as copper, phosphates, bromine, and potash, as well as natural gas and petroleum.
Israel has a scarce but natural resource, water, to boost the economy with the multibillion dollar industry of agriculture. They do this through water recycling techniques
The Negev Desert is also used in the research and development of solar energy.
Q: What is the influence of agriculture on Israel’s economy?
A: These two types of farming communities that were established in the early 1900s, following waves of Jewish immigration, are still a vital part of their economy today. In fact, between the two farming communities, 76% of the country’s fresh produce is output.
Q: What is a kibbutz?
A: A kibbutz is a communal farm that relies on agricultural production for their livelihood. Kibbutz farming has been essential for the development of Israel since the early 1900s.
Q: How does Israel lead in global affairs?
A: Israel is a nation of innovation. The young country learned at the beginning that to survive they needed a thriving economy. As they developed, their desire to become an economically independent nation put them at the top of global affairs. Read [HERE] to find out more about the 10 areas Israel leads in global affairs.
Q: What can olives do for Israel’s economy?
A: Israel’s olive oil production is on the rise, and due to the unique use of their water, their olive oil is said to taste better. Their halophyte agriculture—growing plants in salty environments—gives them an edge to olive production.
Go [HERE] to learn more about how olives help Israel's economy.
Q: What is My Olive Tree’s relationship with Israel and the City of Jerusalem?
A: In 2004 My Olive Tree’s founder, Curt Landry, met with the Israeli finance minister to discuss humanitarian aid efforts and the economic stability of Israel. Through the trusted relationship, My Olive Tree works with the Israeli Defense Forces (which has control over water distribution in Israel) and the City of Jerusalem to plant olive trees.
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