Emerging Markets / September 19, 2017

Economics, Land Use and Agriculture in Israel

The State of Israel was created in 1948, being granted statehood and independence from the British mandate that previously ruled over its territory. Today, the Jewish State is a parliamentary democracy located in the western Middle East along the Mediterranean coastline. Israel has a total territory of little over 20.500 square kilometers, which is somewhat larger than New Jersey. However, the Authorities of the Palestinian Territory contest jurisdiction over sectors of Israeli land. Mostly a desert landscape occupies the southern parts of the country, while mountains and valleys dominate the interior and mainly planes mark the 1.068 kilometers of coastline. Currently, Israel has a total population of approximately 8.3 million citizens, 92% of which live in an urban setting, notably the capital city of Tel Aviv-Yafo with more than 3.6 million inhabitants. The national annual gross domestic product (GDP) of Israel is about US$301 billion (PPP) and it has experienced positive economic growth upwards of 2.5% in recent years. The national economy is divided into 3% agriculture, 28% manufacturing, and 69% services. Similarly, it is estimated that the agricultural industry employs 1% of the national labor force, while manufacturing employs 18%, and services employ another 81%. Meanwhile, the agriculture industry utilizes 24% of the national territory, while another 7% is forested.

Economics, Land Use and Agriculture in Israel

In terms of natural resources, Israel has timber, potash, copper ore, natural gas, phosphate rock, magnesium bromide, clays, and sand. Within manufacturing, the national industry is focused on high-technology products, communications, medical electronics, wood, paper products, phosphates, food, beverages, tobacco, lye, cement, pharmaceuticals, construction, metal products, chemicals, plastics, diamond cutting, and textiles. Likewise, a significant portion of the Israeli economy is dependent upon tourism. Simultaneously, the country’s agricultural industry has as main products citrus, vegetables, cotton, beef, poultry, and dairy products. During 2015, Israel imported US$60 billion worth of goods and exported US$65.4 billion, resulting in a trade surplus of US$5.4 billion. Furthermore, that same year, Israel’s main export, representing almost 23% or US$14.8 billion of the country’s total, were diamonds. Similarly, the country’s main import, representing 11% or US$6.2 billion of all international purchases, were also diamonds. Since 1985, Israel has had a Free Trade Agreement (FTA) with the United States and, currently, Israel’s main trade partners are the United States, China, Palestine, and the European Union.

Meanwhile, land distribution and output in Israel have also evolved throughout the last several decades. Back in 1961, permanent pastures and meadows in the country covered 114.000 hectares, while arable land represented 318.000 hectares and permanent crops accounted for 79.000 hectares. More recently, by 2014, permanent pastures and meadows accounted for 140 hectares, while arable land represented 300.500 hectares and permanent crops covered 97.200 hectares. Similarly, in 1961, the cereals market in Israel utilized almost 155.000 hectares of land and yielded 171.600 metric tons annually. Finally, in 2014, the country devoted some 82.400 hectares of land to cereals production and yielded approximately 359.000 metric tons.

(Read more about Trade and Economics in the Caribbean)

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