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Israel country brief

Overview

Australia and Israel share a close relationship with significant people-to-people and commercial links. Australia established diplomatic relations with Israel in 1949. The Australian Embassy in Tel Aviv, and the Israeli Embassy in Canberra, were both opened in that year.

Political overview

The State of Israel is a robust parliamentary democracy. The Knesset (parliament) is made up of 120 members elected every four years on the basis of proportional representation. The Prime Minister is a member of the Knesset, although Ministers need not be. The President is the Head of State, a largely ceremonial role, and is elected by a secret Knesset vote for a single seven-year term.

The current Israeli Government is led by Prime Minister Netanyahu. Netanyahu’s Likud party heads a coalition of parties (Yesh Atid, Jewish Home and Hatnuah) after the January 2013 elections.

Bilateral relations

Australia has a warm and close relationship with Israel, which is supported strongly by Australia’s active Jewish community. The relationship has a strong historical dimension, dating back to the First World War when Australian forces fought in the region, including in modern-day Israel, alongside their Allied Counterparts against the Ottomans. Australia was the first country to vote in favour of the 1947 UN partition resolution.

Australia and Israel have a healthy commercial relationship with two-way trade worth $919 million (2013). Our major merchandise export to Israel is coal ($63 million) followed by live animals  ($56 million) and aluminium ($19 million). There are opportunities for Australian companies to take greater advantage of Israel’s knowledge-based technologically advanced economy – particularly in areas of biotechnology, ICT, education and training. Investment is also growing. We encourage Israeli companies to view Australia as a regional base and as a supplier of sophisticated goods and services.

People to people links

Australia’s relations with Israel are underpinned by a vibrant Australia-Jewish community, which numbers about 90,000. There are 9,229 Israel-born people living in Australia, an increase of 18.5 per cent from 2006 (2011 census). People born in Israel mostly live in Victoria (44 per cent) and NSW (36.6 per cent). It was recently estimated that Australia has the highest number of Holocaust survivors per capita in the Jewish Diaspora.

Economic overview

Israel has a technologically advanced market economy with substantial, though diminishing, government participation. It depends on imports of crude oil, grains and other raw materials. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel imports substantial quantities of grain, but is largely self-sufficient in other agricultural products.

High-tech exports fuelled Israel’s high economic growth in the 1990s, reaching a high of 7.4 per cent in 2000 before slowing in subsequent years. In the last five years the economy has grown steadily, and continuing strong foreign investment, tax revenue, and private consumption levels have helped the economy recover quickly from shocks such as the conflict with Hizballah in 2006. Recent forecasts estimate that the Israeli economy will grow between 3-3.5 per cent year-on-year in the next two years (2014,2015). GDP growth was 3.3 per cent in 2013.

The key industries driving the Israeli economy are ICT and oil and gas, with Israel’s IT market one of the most developed in the world, shaped by a sophisticated system of major global investors, start-ups and universities engaged in industry research. Google’s June 2013 purchase for US$1 billion of Waze, the Israeli instant navigator software maker, shows to what extent Israeli technology has become globally relevant. For information on doing business and opportunities in Israel please see the Austrade website.

Palestinian Territories

Australia is a long-standing supporter of a negotiated, two-state solution to the Israel-Palestinian issue. While the parties search for a solution, our aid is helping to build the capacity of Palestinian individuals and institutions to take on the responsibilities of a Palestinian state, maintaining enablers of economic growth, and keeping disadvantaged Palestinians out of poverty through social protection and the promotion of business opportunities.  Since 2010-2011, Australia has provided more than $200 million in development assistance to the Palestinian Territories. The main pillars of our aid are five-year funding commitments (2011-2016) to the Palestinian Authority and the UN Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA), and a longstanding civil society program valued at $36 million (2009-2015).

The Palestinian Territories experience high levels of unemployment, food insecurity and aid dependency. Around 26 per cent of Palestinians were out of work in 2013 (up from 23 per cent in 2012) and over a third of Palestinians, 1.57 million people, cannot meet basic food needs. Without aid, an additional 185,000 people, half of them children, would be food insecure. Humanitarian and economic conditions are particularly dire in the Gaza strip, where unemployment has reached 40 per cent and well over half of Gaza’s youth are out of work.  Australian aid focuses on:

Effective governance and economic growth

Australia is helping to support effective governance in the Palestinian Authority by working with the World Bank and major donors to influence policy and regulatory reform, particularly in financial management.  This assists in creating jobs, encouraging investment and maintaining basic services.  Scholarships to Australian universities are also helping future leaders from the Palestinian Authority and emerging legal academics acquire key skills for state-building.

Basic services to the Palestinian refugees and the poor

Our funding and policy engagement with UNRWA helps it meet the basic health, education and social protection needs of almost five million Palestinian refugees.  Through the United Nations Children’s Fund (UNICEF), we are providing safe drinking water and toilet facilities to over 200 schools in poor areas.   

Economic opportunities for the vulnerable

Through Australian and local non-government organisations, we are helping to introduce more efficient practices into the much-neglected agricultural sector and link small scale farmers to domestic and international markets. Through a focus on the role of women, our civil society and education activities are helping to raise the average income and the socio-economic status of women and girls.

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