The State Of Israel: The Most Successful Political And Economic Project Of The 20th Century (Part I) – OpEd


On May 14, 1948, the day before the British Mandate expired, David Ben-Gurion, the leader of the Jewish community in Palestine, proclaimed the establishment of a Jewish state in Eretz-Israel, which would become known as the State of Israel. In Israel’s Declaration of Independence, it was stated that Israel “will uphold the full social and political equality of all its citizens, without distinction of religion, race.” Although the reading of the declaration had been expected for some time, it caused on the one hand a general euphoria among the Jews of the Holy Land and abroad, and on the other hand, great concern. Many feared that the new state would only last a few hours or days. And for a reason.

The next day, the armies of four Arab countries, Egypt, Syria, Transjordan and Iraq, attacked Israel, starting the First Arab-Israeli War (Israeli War of Independence). Arab contingents from Yemen, Morocco, Saudi Arabia and Sudan joined the war. The purpose of the invasion was to prevent the establishment of a Jewish state in an area that the Arab countries considered a Muslim land. Any existence of an infidel, i.e. Jewish state, in the Holy Land was sacrilege to most Arabs. Some Arab leaders talked about “driving the Jews into the sea”. However, the exact opposite happened.

The newly formed, poorly equipped Israel Defense Forces (IDF) repulsed the Arabs in fierce fighting, which lasted 15 months and claimed more than 6,000 Israeli lives (almost 1% of the Jewish population at the time). Under the auspices of the UN, an armistice was declared and temporary borders were established, known as the Green Line of 1949. The Coastal Plain, the Galilee and the entire Negev were under Israeli sovereignty, Judea and Samaria (the West Bank) came under Jordanian rule, the Gaza Strip was under Egyptian rule. The city of Jerusalem was divided, with Jordan controlling the eastern part (including the old city) and Israel controlling the western part of the city.

After surviving the liquidation attempt in the cradle, in 1949 the life of an independent and sovereign Israel began. Israel’s achievements in the development of the nation-state in the last little more than seven decades are more than impressive. From a war-torn nation struggling to survive with scarce natural resources surrounded by enemies, the land where the Bible was written has become the technological and economic powerhouse of the Middle East.

In its laws, Israel defines itself as a Jewish and democratic state, and as the national state of the Jewish people. It has a parliamentary system and universal suffrage. The Prime Minister governs the country, and the Knesset is the supreme legislative body. Israel belongs to developed countries. In 2021, it ranked 29th in the world by nominal GDP (520 billion USD) and 32nd by GDP per capita (PPP) at 50,204 USD. Israel’s economy has experienced an average annual growth of 3.3% since 2000, higher than many OECD countries, fueled by strong population growth. The labor market is close to full employment. In 2017 alone, Israeli tech companies generated $23 billion in revenue. About 100 Israeli companies are listed on the Nasdaq stock exchange.

The population grew from the initial 806,000 in 1948 to around 9.5 million in 2022, and the country has since received more than three million immigrants. Life expectancy for men jumped from 65 years in 1949 to almost 81 years today, while for women the jump was from 68 to 84 years in the same period. Israel ranks 19th on the Human Development Index, and according to the latest UN report from 2022, Israelis are the 9th happiest nation in the world.

The path to such results was not at all easy. Moreover, it was thorny, unpredictable and sometimes more than dramatic. The first Knesset began its session after the national elections (January 25, 1949) in which almost 85% of all eligible voters voted. David Ben-Gurion, head of the Jewish Agency, was elected as the first prime minister; and Chaim Weizmann, head of the World Zionist Organization, was elected as the first president. On May 11, 1949, Israel took its place as the 59th member of the United Nations. In accordance with the national concept of “gathering the exiles”, the country’s doors are wide open for any Jew who has the right to come to the homeland and acquire citizenship. By the end of 1951, a total of 687,000 men, women and children had arrived, of which more than 300,000 were refugees from Arab countries, doubling the Jewish population. The impact of immigration prompted the rationing of resources such as fuel and food during the 1950s and 1960s.

Israel’s economic success is due to a number of factors. The lack of natural resources forced the population to find alternative means of livelihood, which led to the development of irrigation and water desalination plants, technologies that are now sold worldwide. The hostile environment in which Israel finds itself has encouraged the Israeli armed forces to develop cutting-edge technologies that have also permeated the civilian sphere, creating the basis for technological advancement. The country was also able to absorb huge waves of Jewish immigration that strongly contributed to innovation in the economy. The government firmly managed the economy. From 1950 to 1955, Israel’s economy grew by about 13% per year, and slightly less than 10% in the 1960s. The government provided jobs and implemented infrastructure projects using money from abroad, mainly from Jews in the diaspora, loans from American banks, but also from German reparations that were compensation for Nazi crimes. More precisely, residential buildings, roads, railways, electric grid were built, agriculture was mechanized, merchant fleet and national airline were established, minerals were exploited, industry was developed.

By the end of the 1950s, industrial production had doubled, as had the number of employees, and industrial exports had quadrupled. The huge expansion of arable land has led to self-sufficiency in the supply of all basic food products except meat and grain, while about 50,000 hectares of mostly barren land have been reforested, and trees have been planted along nearly 800 km of highways. The educational system, which was developed by the Jewish community in the period before the creation of the state and which included the Arab sector, was significantly expanded. School attendance became free and compulsory for all children aged 5-14 (from 1978 it was compulsory until the age of 16, and free until the age of 18). Cultural and artistic activity flourished, mixing Middle Eastern, North African and Western elements.

State building was overshadowed by serious security problems. The armistice agreements of 1949 not only failed to bring lasting peace, but were repeatedly violated. In violation of the UN Security Council Resolution of September 1, 1951, Israeli ships and ships destined for Israel were prevented from passing through the Suez Canal; the blockade of the Strait of Tiran was tightened; incursions into Israel by terrorist squads from neighboring Arab countries happened more and more often; and the Sinai Peninsula was gradually transformed into a huge Egyptian military base. After the signing of the tripartite military alliance between Egypt, Syria and Jordan (October 1956), the immediate threat to Israel’s survival increased. During the eight-day campaign in the fall of 1956, the Israeli army occupied the Gaza Strip and the entire Sinai Peninsula, stopping 16 km east of the Suez Canal. The decision of the United Nations to station UN peacekeeping forces along the Egyptian-Israeli border and Egyptian guarantees of free navigation in the Gulf of Eilat led Israel to agree to withdraw in stages (November 1956 – March 1957) from the areas conquered a few weeks earlier. As a result, the Strait of Tiran was opened, which enabled the development of trade with Asian and East African countries, as well as the import of oil from the Persian Gulf.

During the 1960s, Israeli exports doubled and GDP increased by about 10% per year. While some previously imported items such as paper, rubber, radios, and refrigerators were now produced locally, the fastest growth occurred in the metals, machinery, chemicals, and electronics industries. As the domestic food market was rapidly approaching saturation point, the agricultural sector began to grow a greater variety of crops for the food industry as well as fresh produce for export. A second deep-water port was built on the Mediterranean coast in Ashdod, alongside the existing one in Haifa, to cope with the increased volume of trade. A permanent home for the Knesset was built in Jerusalem, and facilities for the Hebrew University and Hadassah Medical Center were built in alternative locations to replace the original buildings on Mount Scopus, which were abandoned after the War of Independence. At the same time, the Israel Museum was founded with the aim of collecting and exhibiting the cultural and artistic treasures of the Jewish people.

Israel’s foreign policy relations were constantly expanding. Close ties developed with the United States, the countries of the British Commonwealth, most Western European countries, almost all countries of Latin America and Africa, and some in Asia. Extensive programs of international cooperation were launched, as hundreds of Israeli doctors, engineers, teachers, agronomists shared their knowledge and experience with people in other developing countries. In 1965, ambassadors were exchanged with the Federal Republic of Germany, which had been postponed until then due to bitter memories of Nazi atrocities in World War II.

Since 1964, Arab countries, concerned about Israeli plans to divert the waters of the Jordan River into the Coastal Plain, have tried to divert the source to deprive Israel of its water resources, causing tensions. Hopes for another decade of relative peace have finally been dashed by intense Arab terrorist attacks across the Egyptian and Jordanian borders, constant Syrian artillery bombardment of agricultural settlements in the northern Galilee, and a strong build-up of the armies of neighboring Arab states. When, in May 1967, Egypt again moved large numbers of troops into the Sinai desert, ordered UN peacekeepers to leave the area, reimposed the blockade of the Straits of Tiran, and entered into a military alliance with Jordan, Israel found itself facing hostile Arab armies on all sides.

As Israel’s neighbors prepared to destroy the Jewish state, Israel invoked its right to self-defense, launching a pre-emptive strike against Egypt in the south (June 5, 1967), starting the Six-Day War. This was followed by an Israeli counterattack on Jordan in the east and the destruction of Syrian forces in the Golan Heights in the north. At the end of six days of fighting, the green demarcation line of 1949 was replaced by a new one. Judea and Samaria (West Bank), the Gaza Strip, the Sinai Peninsula and the Golan Heights came under Israeli control. As a result, villages in the Galilee were freed from 19 years of continuous Syrian shelling; the passage of Israeli ships through the Strait of Tiran is ensured; and Jerusalem, which had been divided under Israeli and Jordanian rule, was reunited under Israeli control.

After the war, Israel’s diplomatic challenge was to translate its military gains into a lasting peace based on UN Security Council Resolution 242, which called for recognition of the sovereignty, territorial integrity and political independence of each state in the area. However, the Arab position, formulated at the summit of the Arab League in Khartoum (August 1967), voted the famous three nos: peace with Israel was rejected, negotiations with Israel were rejected, and Israel should not be recognized. In September 1968, Egypt began a “war of attrition”, with intermittent actions along the banks of the Suez Canal, which escalated into widespread, localized fighting, causing heavy casualties on both sides. Hostilities ended in 1970, when Egypt and Israel accepted a renewed ceasefire along the Suez Canal.

Three years of relative peace were interrupted on Yom Kippur (Day of Atonement), the holiest day of the Jewish year, when Egypt and Syria launched a coordinated surprise attack on Israel (October 6, 1973). The Egyptian army crossed the Suez Canal, and Syrian troops penetrated the Golan Heights. Over the next three weeks, the Israel Defense Forces completely turned the tide of the battle, repulsed the attackers and launched a counteroffensive. The results were astonishing: the entire Sinai Peninsula was occupied, Israeli forces crossed the Suez Canal and entered Egypt and came within 100 km of Cairo, and in Syria they came within 32 km of Damascus.

*Matija Šerić is a geopolitical analyst and journalist from Croatia and writes on foreign policy, history, economy, society, etc.

Matija Šerić

Matija Šerić is a geopolitical analyst and journalist from Croatia and writes on foreign policy, history, economy, society, etc.

One thought on “The State Of Israel: The Most Successful Political And Economic Project Of The 20th Century (Part I) – OpEd

  • November 9, 2022 at 6:04 pm

    This is a fantastic article. Thank you for the insight Matija.


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