Citizens of Israel, we are at war,” said Israeli Prime Minister Benjamin Netanyahu after the Hamas attack. But the investment does not worry about it. Israel’s economy is built around defense and will continue to function as it has.
A priori it seems that now all the efforts of the country’s economy will be used for war, but in fact, Israel is “always at war.” This is the phrase that many sources of investment, Israeli and Spanish, who do not want to reveal their identity because of the turbulent times, pronounced in elEconomista.es. In general terms, Spanish investment in Israel, and vice versa, heralds peace.
Israel is an economic powerhouse in terms of technology. Known as the Silicon Valley of the East, the country invests 5.4% of its GDP in R&D. But this does not mean only public investment, but the country’s economy has created a very favorable environment for private companies to participate in the development of technology, especially in the military.
Israel’s defense industry has a long history and clients around the world. The air forces of the United States or Italy have aircraft with technology from this country, but also countries such as Chad, Uganda, South Korea, Australia and even Spain. But it doesn’t matter that the Middle Eastern country’s technology is one of the most used by the world’s armies, because Israel has the “Combat Tested” seal. In other words, all of its technology has been proven in its conflict with Palestine.
Defense spending, according to data from the country’s Ministry of Finance, is 1,973 million euros in 2022 and represents 4.51% of GDP and ranks 15th among countries in the world in military spending.
The perfect ecosystem
Israel is one of the few countries that spends a lot of its GDP on R&D investment, Singapore is enough. This, added to a strong army and a Ministry of Defense that invests large sums of money in a conglomerate of technology companies (big and small) to develop technology together with a network of technical universities , will help set up this war economy ecosystem that, later, will reach the general population. Civil and military coexist in Israel.
The great brains of Israeli intelligence have developed many applications that are now used in everyday life.
The geolocation of many social networks or even the capture of consumer behavior patterns are technologies that started with purely military use and which are now included in civilian life.
But it also wouldn’t have happened without the support of the United States. One of the defense technologies that Israel is most proud of is the so-called “Iron Dome”, the country’s main defense against attacks from the Gaza Strip. This mobile defense system to intercept rockets was deployed ten years ago and Barack Obama contributed almost $300 million during his term, almost 10% of the total cost.
Therefore, the fact that Israel is now under the mandate of a state of war, to the point that Netanyahu offered the main opposition leaders to form an “emergency government” to deal with the conflict, does not affect in the country’s economy. because it is, precisely, ‘battle tested’.