Israel's economy grows, Palestinian's shrink

NY Times:

For Israel, it has been a typically tumultuous year: Ariel Sharon, then the prime minister, collapsed into a coma on Jan. 4, the radical Islamic group Hamas won Palestinian elections later that month, and Israel fought a month long war in Lebanon this summer.

But despite the political turmoil and spasms of violence, Israel, it seems, has figured out how to keep its economy charging forward.

It was the country’s third straight year of strong growth, with the economy expanding nearly 5 percent. The stock market has been hitting record highs; unemployment is at a 10-year low. Israel’s central bank is lowering interest rates to 4.5 percent on Jan. 1, putting them well below rates in the United States, an almost unprecedented development. The Israeli shekel is trading at 4.2 to the dollar, its strongest level in five years.

Further, Warren E. Buffett, the billionaire investor, paid $4 billion for an Israeli company, and Donald Trump is developing a 70-story luxury residential tower on the outskirts of Tel Aviv.

“Israelis look at the economy, and they’ve essentially been through these disturbances in the past, and they know the economy is pretty robust and it tends to come back,” said Stanley Fischer, the governor of the Bank of Israel. “Things that happen here have a smaller impact on markets than I think they would abroad.”

While the Israeli economy has been thriving, the Palestinian economy has moved in the opposite direction, contracting by an estimated 10 to 15 percent this year, according to the Palestine Monetary Authority.

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There is more. Is there any better example of the high cost of jihad? While it may cost Israel and the West more to defend themselves from the jihadis, the hidden cost of waging war against Israel and the west is extraordinarily high in economic terms. The problem for the Palestinians is that they have focused all their efforts on jihad and none of their efforts on commerce.

A good example is what happened to some hot houses left by the Israelis in Gaza when th Jewish settlers were moved out. Rather than take them over and produce tomatoes or other crops, the Palestinians raided the abandoned hothouses and stripped and destroyed them. That is just not and intelligent way to manage resources.

It also explains why people like Warren Buffet and Donald Trump would rather invest their money in Israel instead of Palestine. If the Palestinians were not so hopped up on jihad, they could attract substantial investment for tourist facilities in the West Bank near cities like Bethlehem.