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Israel’s troubles don’t seem to hurt economy

Marketplace Staff Jul 6, 2010


Steve Chiotakis: Israeli Prime Minister Benjamin Netanyahu visits Washington today. A controversy over Jewish settlements in the West Bank and the blockade of Gaza are likely to dominate the agenda. One thing that probably wont: Israel’s economy. Brett Neely explains.

Brett Neely: Israel’s troubles appear to have had almost no economic impact. At 7 percent, unemployment there is lower than in the U.S. And the financial crisis never touched Israeli banks.

Glenn Yago is an economist at the Milken Institute. He says the country’s foreign policy turmoil has even helped develop the economy.

Glenn Yago: The demand for solutions to what were battlefield technologies are easily transferred into civilian uses.

He says that sort of innovation has also transformed agriculture, which was Israel’s first big export industry.

Yago: It’s also not selling tomatoes but selling tomato seeds and new variants and new seed technologies that increase productivity in agriculture outside of Israel.

The country’s thriving export sector sent almost $19 billion worth of goods to the U.S. last year — twice what we sent to Israel. Yago adds that while Gaza gets all the attention these days, the relatively peaceful Palestinian-controlled West Bank is also experiencing an economic boom. A bit of good news in a part of the world that needs it.

I’m Brett Neely for Marketplace.

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