Would Israel be classified as a developing country?

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By Kristy Tolley

Israel’s Economic Performance

Israel is a Middle Eastern country located on the eastern shore of the Mediterranean Sea. It has a population of approximately 9 million people and an area of 20,770 square kilometers. Israel is known for its advanced technology, strong military, and vibrant economy. Despite facing numerous challenges, including ongoing conflicts with its neighbors, Israel has managed to maintain a stable and growing economy over the years.

Definition of a Developing Country

There is no universally accepted definition of a developing country. However, the most commonly used criteria for such classification include low income per capita, low human development indicators, and an underdeveloped economy with low levels of industrialization and infrastructure. Developing countries are also characterized by high levels of poverty, inequality, and vulnerability to external shocks. In general, countries that are classified as developing countries are those that have not yet attained the level of prosperity and development of the world’s advanced economies.

Israel’s Economic Indicators

Israel’s economy is characterized by a high-tech sector, advanced manufacturing, and strong agricultural production. The country has a highly educated and skilled labor force, a sound legal and regulatory framework, and a favorable business environment. According to the World Bank, Israel’s gross domestic product (GDP) was $387 billion in 2020, making it the 34th largest economy in the world. Israel’s GDP per capita was $43,616 in 2020, which is considered high by international standards. The country’s unemployment rate was 6.1% in 2020, which is relatively low compared to other countries.

Comparison with Other Countries

When compared to other countries, Israel’s economic performance is impressive. For instance, Israel’s GDP per capita is higher than that of many other countries in the Middle East and North Africa region, including Egypt, Jordan, and Morocco. In terms of economic competitiveness, Israel ranks 22nd out of 141 countries in the Global Competitiveness Index 2019. Israel also ranks high in innovation, where it has been consistently ranked among the top countries in the world.

Human Development Index of Israel

The Human Development Index (HDI) is a measure of a country’s overall human development, which takes into account the country’s health, education, and income levels. According to the United Nations Development Programme (UNDP), Israel’s HDI was 0.919 in 2019, which is considered very high. Israel ranks 22nd out of 189 countries in the HDI rankings. This indicates that Israel has a high level of human development, with a well-educated, healthy, and prosperous population.

Education and Health in Israel

Israel has a highly educated population, with a literacy rate of 97.3%. The country has a well-developed education system, with a high enrollment rate in both primary and secondary schools. Israel also has a good healthcare system, which provides universal coverage to all citizens. Life expectancy in Israel is 83.3 years, which is among the highest in the world.

Income Inequality in Israel

Despite Israel’s strong economic performance, the country still faces significant income inequality. According to the Central Bureau of Statistics, the Gini coefficient, a measure of income inequality, was 0.35 in 2019, which is relatively high. Income inequality is mainly attributed to differences in earnings between high-skilled and low-skilled workers, as well as between different regions in the country.

Natural Resource Endowment

Israel is not rich in natural resources. The country has limited arable land, few mineral resources, and is dependent on imports for most of its energy needs. However, Israel has developed a strong technology sector, which has helped to drive economic growth and innovation.

Political Stability and Infrastructure

Israel has a stable political environment, despite ongoing conflicts with its neighbors. The country has a democratic system of government, strong institutions, and a well-developed legal and regulatory framework. Israel also has a good infrastructure, with modern transportation systems, advanced communication networks, and a well-developed energy sector.

Israel’s Global Economic Competitiveness

Israel’s economic competitiveness is driven by its technology sector, which is among the most advanced in the world. Israel has a highly skilled labor force, strong research and development capabilities, and a favorable business environment. The country is also well-connected to global markets, with strong trade links to both Europe and Asia.

Conclusion: Israel’s Classification as a Developing Country

Based on the economic indicators analyzed, Israel cannot be classified as a developing country. Israel has a high level of human development, a strong economy, and a well-educated and skilled labor force. While income inequality remains a challenge, Israel’s overall economic performance and competitiveness are more aligned with those of advanced economies.

Policy Implications for Israel’s Economic Future

Israel’s economic future will depend on how well the country can continue to innovate and adapt to a rapidly changing global economy. Policies that promote research and development, encourage entrepreneurship, and reduce income inequality will be key to sustaining economic growth and competitiveness. Additionally, policies that promote regional integration and reduce political tensions will also be important in promoting economic development and stability.

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Kristy Tolley

Kristy Tolley, an accomplished editor at TravelAsker, boasts a rich background in travel content creation. Before TravelAsker, she led editorial efforts at Red Ventures Puerto Rico, shaping content for Platea English. Kristy's extensive two-decade career spans writing and editing travel topics, from destinations to road trips. Her passion for travel and storytelling inspire readers to embark on their own journeys.

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