Israel-s Exports Underpin Economic Growth

With a relatively small domestic market, Israels economy needs exports. Israel exported more than $30 billion in goods and services in 1996. In the first half of 1997, exports have increased by 11 percent over 1996 figures.

Hi-tech products are the key to export growth

Long gone are the days when Israels only exports were the Jaffa orange and other agricultural products. Todays exports are increasingly high-tech; an estimated 80 percent of the products Israel exported in 1996 included high-tech and electronics components.

In recent years, new companies in the high-tech sector have been particularly active in the exports field. Their products include computer software and related hardware as well as medical electronics equipment and telecommunications systems. But in other fields hi-tech products are also an integral part of Israels exports.

Technological advances developed for the military have been adapted for the civilian sector

Israels technological and electronics sector was first developed because of the urgent need for an independent leading-edge capability for the countrys military. Over the years, products such as electronic printing systems, ultra-sound and scanning equipment and lasers have been adapted from military to civilian use. Recently, the electronics sector, a broadly defined field including telecommunications, data communications, medical electronics, defense systems and software, has emerged as the countrys leading industrial sector. Israel has also become a world leader in fiber-optics, electro-optic inspection, systems for printed circuit boards, thermal imaging night vision systems and electro-optics-based robotics manufacturing systems, while innovative computer graphics, computer-based imaging systems and educational programs have also been developed.

Israels largest export industry, polished diamonds, is increasingly using high-tech processes. The country is the worlds largest manufacturer of polished diamonds with over $5 billion of such diamonds exported in 1996 and $3.4 billion in the first half of 1997. Raw diamonds are imported, principally from South Africa, and then cut and polished with computer software and automation helping the diamond cutter to derive the maximum from the raw stone.

Chemicals, plastics and minerals comprise some 21.5 percent of Israeli exports. This includes refined oil products such as petrochemicals as well as pesticides and fertilizers, many of them based on minerals from the Dead Sea such as potash and bromine.

Close cooperation beween researchers and farmers enables the production of a wide variety of agricultural items for export

An important component of exports is agriculture, with $801 million worth of flowers, fruit and vegetables exported in 1996, mainly to Europe. In the same period, Israel exported $1.4 billion worth of advanced agro-technology inputs robots to pick the fruit, electro-optical equipment to monitor the quality of produce and genetically cloned seeds to guarantee high quality yields. These included $252 million of drip irrigation equipment and $107 million of seeds.

Textiles (5.8%) and food and beverages (3.5%) are export sectors in decline in percentage terms but increasing in real terms.

Services comprise nearly $9.5 billion of overseas income, including both tourism and shipping services and the profits from goods manufactured by Israeli companies abroad.

Israels exports are expected to continue to grow at an annual average rate of more than 10 percent, and the drift towards more high-tech products will continue, while traditional items such as textiles and processed foods will make up a smaller percentage of the countrys exports.

Exports of Goods
(in millions of US dollars)

	1960s	1970s	1980s	1996
Total Exports	217	768	5,511	20,500
Thereof: Industrial Products	154	639	4,955	19,700
Agricultural Products	63	129	556	800