Ireland and Israel

Haaretz:

In our collective dream, Israel is a world wonder, a tiny country surrounded by enemies that has reached astonishing achievements, that has high-tech, sunshine, Jewish genius, beaches and what an army, what an army!

Yet the truth is that economically, Israel is one of the few countries that has been marching in place for years upon years.

Comparing us with Ireland is highly educational. Ten years ago, Israel and Ireland were in roughly the same place, with GDP per capita of about $14,000. Back then Ireland was formulating drastic reforms to transform it from one of Europe's backward nations to one of its most advanced, while Israel was enthralled by its peace process and the tremendous wave of immigration from Russia.

Next week the Bank of Israel will be publishing its annual report. For the first time, the central bankers will be analyzing the economy from a ten-year perspective, not just one year. The results will be sobering.

GDP per capita inched up by less than 20 percent, while Ireland's almost doubled. Ireland, a tiny country with just 4 million residents, is today one of the richest nations around, while Israel lags behind.

Usually, the security situation is blamed, but that excuse is a feeble one. First of all, foreign investors couldn't care less about it when examining potential investments in Israel. And spending on security is a matter of national priorities, as is spending on education and healthcare, especially given how bloated and flabby the defense establishment has become.

Second of all, Israel has received aid and loan guarantees amounting to $30 billion over the last ten years. No other country in the world has received infusions of such a scale. Certainly Ireland didn't.

Thirdly, Israel was swamped by immigrants in the last decade, much of it high quality people, and there was the high-tech bubble that brought in billions of dollars.

In the last ten years, Ireland, aka the Celtic Tiger, achieved what has been called an economic miracle. It never sat back whimpering about its own security problems, quite the contrary: it took advantage of its economic boom to improve its security situation. Its economic growth played a key role in bringing the Irish and British governments to reach an agreement on northern Ireland.

Not bad, huh?