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Israel country brief

Introduction

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 1949.

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.

Economic overview

Israel has a technologically advanced market economy with substantial, though diminishing, government participation. It depends on imports of crude oil, grains, raw materials, and military equipment. 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 recent years the economy has grown by over five per cent a year. The conflict with Hizbollah in summer 2006 slightly dampened GDP growth, but continuing strong foreign investment, tax revenue, and private consumption levels helped the economy recover quickly.

Bilateral relationship

Australia has warm and close relations with Israel, which are 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 $907 million (2011-2012). Our major merchandise export to Israel is coal ($56 million) followed by live animal trading ($54 million) and pearls and gems ($15 million – all figures 2011-2012). 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.

Updated March 2013