A report in the Israeli financial website Globes today called Israel “one of the world’s most attractive targets for foreign direct investment (FDI).”
According to the annual report issued by the The Organisation for Economic Co-operation and Development (OECD), an organization encouraging international economic development, Israel’s attractiveness as an investment target as measured by the ratio of FDI to Gross Domestic Product (GDP) is 4%. This is the fourth best ratio among OECD member nations trailing only Luxembourg, Ireland, and Chile.
Globes explains the significance Israel’s FDI to GDP ratio:
Israel’s ratio of FDI to GDP was significantly higher than the OECD aggregate ratio of 1.4%, the euro bloc’s aggregate ratio of 1.4%, and the 20 most important countries’ aggregate ratio of 1.6%. Furthermore, Israel’s ratio of incoming FDI was higher than the aggregate ratio for emerging markets, including the aggregate ratio for the BRICs countries (Brazil, Russia, India, and China), which attracted most of the FDI over the past decade.
The importance of FDI to country was also explained:
In contrast to financial investments, i.e. the purchase of Israeli shares, which are by nature temporary and short-term, FDI is by nature long-term, reflecting great confidence in an economy, particularly the causes of increased employment and economic growth. These investments are of decisive importance for sustainable long-term economic growth.
A related news story in Globes examined the implication of a recent “wave of mergers and acquisitions” of Israeli companies.
Other recent stories reflecting the health of Israel’s economy include Standard and Poor’s top rating of Israel’s economy earlier this year and the growth of the Market Vectors Israel Exchange Traded Fund in its first year of trading.
In The Real Big Winner of the Arab Spring that was published in the October 2013 issue of The Tower Magazine Gabriel Scheinmann observed:
At the same time, Israel has emerged from the chaos relatively unscathed. Its economy has not missed a beat: Tourism is at an all-time high as Europeans shun their traditional Mediterranean vacation-spots for ironically safer Israeli beaches, trade with Asia and Latin America has increased, and Israel is currently the only OECD country to reduce its debt-to-GDP ratio. The Jerusalem Post recently reported that Israel’s GDP grew 14.7 percent from 2009-2012 and experienced 3.4 percent growth in the first half of 2013. In addition, the first of Israel’s recently discovered offshore gas fields came online in March, placing the country on track to becoming an energy exporter.
[Photo: epSos .de / Flickr ]