The strange and open secret about the Israeli economy

Yet another IMF conference about the global banking system is not something to set you alight, even if it features the largest bank from your own country – Bank Hapoalim from Israel. As to be expected, the prophets of gloom were out in full: “The global economy is facing its third major brake on expansion in five years as emerging markets slow from China to Brazil, provoking debate about how much policy makers should respond.”

However, this time there was an interesting spark to the story. It is not just that the IMF presented a reasonably optimistic forecast for Israel –  2.9% in 2012 and 3.2% in 2013. I was more interested in the reports back from the Bank of Hapoalim delegation.

It is evident from the comments that the Israelis were often met with the question: “How do you guys do it?” In other words, how does Israel succeed to beat the global recession, and near consistently so, when others fail?

Well, a comprehensive revelation of the secret lies beyond the scope of a blog. Point to the skills of Governor of the Bank of Israel, Professor Stanley Fischer. Discuss the benefits of a start up economy. Consider the Israeli character to push beyond challenges. etc etc.

There is one interesting case study that conveniently illustrates what I am saying. I have read that sales of new cars in the EU were down 11% in September 2012, compared to a year previously. And yet the President of Seat cars, James Muir, has identified Israel as a key market for further expansion. In an interview in the Hebrew press last Friday, he stated how the commercial set up in the Holy Land allows for companies to move very quickly from second-rate status to major brand.

There is an old zionist phrase which dates back to Theodore Herzl: “Where there is a will, where is a way”.

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