Publisher's Synopsis
The situation of Israel is in many ways unique. No other country has absorbed so many immigrants relative to its size. Few other countries have been able to grow so fast, modernize so extensively and maintain a free society and a republican democracy. It has achieved this despite the active hostility of many of its neighbours and whilst undertaking enormous economic, military, political and social commitments. However, its economy has been undergoing a crisis phase. Its rate of economic growth has slowed drastically and there are now serious doubts about whether it can continue to finance such extensive commitments.;This book discusses how the economy has reached its current state and assesses its future prospects.;Persistent and high levels of capital imports have helped supply the capital necessary for rapid modernization but they have also helped to finance consumption. Israel holds the record for the highest rate of foreign debt per capita (actually higher than its equivalent rate of GDP) and also for the largest trade deficit per capita. Throughout recent years, successive governments have struggled to control massive inflationary pressures within the economy. An enormous defence budget places a further strain on the economy. However, given the realities of Israel's recent past and its immediate situation it is difficult to see how this burden is going to be eased substantially in the near future, and this book analyzes the possible consequences of this.
