The impact of covid on Israel’s economy
Covid has been with us for about a year. This time last year, I was leading an overseas guest around Israel’s primary investor conference, hosting sessions with Fintech and health care services.
Since then? Well maybe not too bad, at least relatively. According to the US-Israel Legal Review 2020 just released:
While in North America high tech investment is down 10% compared with 2019 and while in Europe we have seen a 20% reduction, in Israel there seems to be a 40% increase compared to the first half of 2019.
Moving into 2021, that pattern seems set to continue. New unicorns are emerging almost weekly. Specifically, look at the progress of Intel. “Revenue in 2020 was $8 billion, up 14% from $6.6 billion in 2019. This figure represents 2% of Israel’s GDP and 10.27% of Intel’s overall annual revenue of $77.9 billion in 2020.”
Unfortunately, the lack of direction for the past three years from the government in Jerusalem is no longer able to conceal worrying trends. As outlined in the newspaper “Ha’aretz“:
- GDP per capita isn’t picking up
- Deficit will weigh on the government
- High unemployment won’t disappear
- Small and medium-sized businesses have taken a big hit
- Permanent uncertainty remains
Nothing positive is likely to happen until after the general election on March 23rd. Given the fact that this is followed almost immediately by the week-long Passover festival and then assumedly by the customary coalition squabbling for a couple months, serious financial planning cannot commence until the mid summer at best.
Thus, even if a new policy were to be implemented shortly afterwards, Israel cannot expect any new strategic measures to have an impact on the corona worn economy before the early next winter at best!
We talk about the tragedy of corona. We know that other serious illnesses are not being treated because corona drags on health resources. We note the rise of violence and social distress in communities.
None of these are excuses for the disgraceful performance over years of Israel’s government, when it comes to the economy. What covid has shown is that the triumphs mentioned above have occurred despite rather than because of those who think they are in power.