Israel as the start-up nation

Israel is a small country of 9 million, with a landmass of 20,22,145 km2 – about the size of Cross River State. Niger State, with a landmass of 76,363 km2, is more than 3 and a half times the size of Israel.  Most of the country is desert, with little or no natural resources. Within 70 years, however, the desert has been transformed into a blooming garden, with flourishing cities such as Jerusalem, Tel Avivand Haifa. Israel is a prosperous democracy and a world leader in several technological fields.

With aGDP of $387.7 billion and per capita income of $42,823, Israel is way ahead of Nigeria, a resource-rich country of 206 million people, with a GDP of $443 billion and per capita income of $2,149. Israel scores impressively on the Human Development Index, with 0.919 and 9th place out of 189 countries. Our HDI is 0.539 and number 161 on the global league. Nigeria is a monocultural, oil-dependent rentier economy. Israel is an advanced industrial, diversified economy; a major exporter of cut diamonds, pharmaceuticals, refined petrol, machinery, medical instruments, computer hardware and software, agricultural products, chemicals, textiles and apparel.

In September 2010, Israel acceded to membership of the Paris-based OECD, popularly known as “the rich man’s club”. The country was praised for its technological progress and for producing”outstanding outcomes on a world scale”.

I am a well-travelled former international civil servant. But for some reason, I am yet to visitIsrael, I hope to, one day soon. Next year in Jerusalem!

Let me also put my cards on the table. I have been rather critical of Israeli policies towards their Palestinian neighbours. My natural instinct and social-democratic convictions have always been to stand by the small guy against the fat bully. But I am also a realist. I know that the state of Israel has always been at the receiving end of violent attacks from its Arab neighbours since its emergence as a sovereign state in May 1948. They have had to arm themselves to the teeth in order to survive; surrounded as they have been by a sea of 300 million murderouslyhostile Arabs. Following the Biblical injunction, I, too, have prayed for the peace of Jerusalem in my dawn watches.

I love Eretz Yisrael. For as long as I can remember, I consider myself a friend of the Jewish people.I abhor anti-Semitism, which I consider to be one of the great evils of our time. I have been influenced by Jewish thinkers and Hasidic mystics from the Baalshem Tov Rabbi Israel ben Eliezer to Martin Buber, Gershom Scholem, Isaiah Berlin, Hannah Arendt, Simone Weil, Rebbe Menachem Mendel Schneersonand Emmanuel Levinas. I have been on personal terms with the world-renowned Franco-Jewish public intellectual and philosopher Bernard Henri-Lévy. I love Jewish chutzpah, optimism and the sheer celebration of life.  I believe in the ethics of Vivek Olam – the call made on humanity to perfect this world.

I see parallels between the history of the Jews and Africans. There is a similarity in our sufferingand humiliation.  But what is remarkable is that the Jews have emerged from the dark night of oppression to be a great and successful people. Unlike us, the Jews do not wallow in self-pity. Adolf Hitler and the Nazis slaughtered 6.5 million of them in the gas chambers of Dachau, Buchenwald and Belsen. The Shoah was the lowest moment in their 3,000-year history. But they have stronger and better. They have forgiven the Germans, for sure, but they have never forgotten. The Jews, of all people, have the longest historical memory, if we are to believe Nobel laureate Elie Wiesel.

The late Kenyan political scientist Ali al-Amin Mazrui enjoined us to embrace “the Talmudic tradition” as a vehicle for African emancipation. By “the Talmudic tradition”, Mazrui meant the reverence for learning and the rigorous pursuit of spiritual and ethical values that has been at the heart of Jewish culture and civilisation since time immemorial. As a teenager, my tears used to wet the pages of the incredible tales of the Warsaw ghettos in the novels of Nobel laureate Isaac Bashevis Singer. Throughout their long night of persecution, they always kept alight the flame of hope. The places of honour in Jewish culture are always reserved, not for the moneybag, but for the man of learning and piety; a tradition they have preserved from the medieval Maimonides to latter-day seers such as Yitzhak Kaduri and Adin Steinsaltz.

Israel started off from very poor beginnings. From the turn of the last century, every European pogrom or international war pushed thousands of Jewish refugees into British-occupied Palestine. Most arrived poor and penniless. Life was hard in their new desert homeland; worsened by regular skirmishes with hostile Bedouins and wild Arab tribesmen. The Jewish rural communities formed themselves into kibbutzim farming cooperatives; living together and sharing whatever products they got from the land. The kibbutzim became a form of socialist movement that has made Israel the staunchly egalitarian society that it is today. It also provided a bedrock for agrarian food self-sufficiency which is crucial for any thriving modern market economy.

An institution particularly unique to Israel is the Histadrut, the labour-union movementthat doubles as a cooperative and welfare agency.

The Jewish militia, the Haganah, was a terrorist organisation that spearheaded the struggle for independence. They wreaked as much havoc to their hapless Arab neighbours as they did to the departing British. Its warlords included Menachem Begin and Meir Har-Zion, arguably the greatest military hero in the history of the Jewish state.

After Declaration of Independence on 14 May 1948, the new state benefitted considerably from military assistance as well as official development assistance (ODA) from the United States. The German government has also made restitution payments, estimated at a staggering $111 billion,for the horrendous crimes committed against the Jewish people during the Nazi holocaust. The Jewish Diaspora also contributed a lot of financial resources to the development of the new state. Such capital inflows went a long way in helping the new state consolidate itself economically.

Despite the war and conflicts, during the first two decades, economic growth averaged 11 percent annually, while per capita income grew by an annual average of 6 percent. The early years were characterised by strong interventionist policies that were aimed at protecting fledgling infant industries.  From the seventies onwards, there were massive fluctuations in economic growth, occasioned by issues of war and insecurity and rising waves of migrants from the Soviet Union, Eastern Europe and the Maghrib. The economic costs of absorbing new migrants weighed heavily on the national budget, in addition to bolstering investments in the defence sector to strengthen war preparedness.

The 1980s witnessed a period of hyperinflation that soared to a high of 400 percent.  By 1985, a drastic stabilisation policy had to be implemented, with deregulation of the exchange rate and together with market-friendly reforms. Monetary policy was overhauled and the bloated welfare system was tamed. By 1990, inflation came down to zero percent. It has averaged below 4 percent since the year 2000. Import restrictions were replaced by a system of transparent tariffs.

Subsidies poor-performing enterprises were removed. Trade agreements were reached with North America and the EU, which contributed to boosting exports. The central bank was granted autonomy, with the great economist Stanley Fischer as Governor. A hero of mine, Stanley Fischer strengthened the national currency, the shekel, while pursuing monetary policies that have brought credibility macroeconomic policy management and set the country on the path of long-term prosperity.

My next article will explore the why and how of Israeli economic success and the lessons we can learn from it. Shalom!

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