October 13, 1998 I want to thank you for being here with us for this Jubilee Economic Conference. In the life of a nation half a century is not a long time. And in the 4000 years of Jewish history this time frame seems even shorter. But I don't believe I would be exaggerating if I say that in the life of the Jewish people it is difficult to find a period of greater significance and more impressive achievements than the first 50 years of the reborn state of Israel. When we review these 50 years, we usually think first of our wars of survival. We were attacked even before the state was officially born, and the attack was meant not merely to defeat us but to destroy us. We survived those attacks, and all the attacks that followed, whether by armies or terrorists. The odds were impossible, but our spirit was indomitable. During this half-century we brought millions of immigrants from all over the world, most of them penniless, and integrated them into our society. In relation to the population, it was the largest number of immigrants ever absorbed by any country. And throughout this period, we also managed to make extraordinary contributions in the spheres of agriculture, science, medicine, literature and the arts. This week we proved in Moscow that we are a superpower even in chess. Only Russia and the U.S. are ahead of us. It is not commonly known that after Moscow, the city with the largest number of chess grandmasters is Be'er Sheva, the capital of the Negev. But all these achievements will not be enough if we do not make our economy one of the foremost economies in the world. I am convinced that we are well on the way to achieving this, too. And we are determined to make this achievement overshadow every other. The Israel economy has been undergoing a structural transformation. In the past it was notoriously centralized, with massive government involvement at every turn. Today, the economy is open, advanced and liberal. It is an economy which has successfully integrated into the economies of the Western world. We are not only a chess superpower, we are a superpower in the sphere of knowledge industries, of high technology; the sphere of the future. In the past we were known for Jaffa oranges. Today we are famous for our high-tech start-ups. Except for the U.S., Israel boasts the highest number of start-ups in absolute terms. We have had 3000 start-ups here, more than the U.K., or Germany or Japan or China. And don't forget - our whole population is the size of Chicago's. This is a direct result of the kind of manpower we have in this country. We have more engineers, more technologists and more scientists per capita than virtually any other country. We are leaders in electronics, communications, biochemistry, agrochemistry, agriculture and computer sciences. This does not mean that we can relax and rest on our laurels. To cope with the fierce competition in today's world we must continue to liberalize, deregulate and privatize. We must make the attractiveness of investing in our country second to none. We know this. And we are determined to continue until our economy becomes a model of innovation, imagination and entrepreneurship. I believe we have what it takes. Israel is a democracy, the only democracy except Turkey in this part of the world. It is an open society. We have both a tradition of freedom and liberalism, and a tradition of social consciousness. Our economic policy combines free market principles with concern for the underprivileged. It is a policy which has reaped unlimited praise from the International Monetary Fund, and from investment consultants and experts everywhere. In the global economic storm we have remained an island of stability. We have felt a few tremors, but the soundness of our economy has proved itself. What made it so was our policy of full transparency, accountability and financial integrity. The budget deficit has been sharply cut by more than half - the most drastic cut anywhere in recent years. This year the deficit will be 2.4 percent of GDP, and we intend to keep on cutting. Inflation used to be the endemic disease of the Israeli economy. It is now at its lowest level in 30 years, and I am convinced that within the next 2 years we will bring it, permanently, to American and European levels. The pace of privatization is also setting a record. The revenue from recently privatized firms has reached $4 billion, about 4 percent of GDP. Even this conference was privatized and run by the business community. We have also deregulated the shekel. I don't know how the shekel did against Phoenician currency in the days of Solomon, or against Greek currency in the days of the Maccabees. But as far as I can tell this is the first time in 3000 years that the shekel is convertible. The liberalization of the currency, too, has brought us kudos from economic leaders in the West. The scope of foreign investments has reached record dimensions. In 1997 it constituted 4 percent of GDP. Israel has become the land of unequalled business opportunities. In the framework of this conference, leaders of the business sector and the economic ministries will describe to you the tremendous potential of collaboration between Israel and the international high-tech companies, both in the national and regional projects. Israel attaches great importance to the development of the whole region. The peace process, which began in Madrid in October 1991, seven years ago almost to the day, envisioned two parallel tracks: the political and the economic. We hoped then, as we hope now, that the economic track will help not only to raise the region's standard of living, but to overcome political obstacles and conflicts. It is with this in mind that we are going to the U.S. tomorrow for a meeting with the Palestinian leadership. In the 50 years since the establishment of Israel, the wars waged against the state have brought untold suffering not only to us but to the Palestinian people and to the Arab nations. An Arab willingness to compromise 50 years ago could have prevented all this suffering. This region could have become a model of cooperation and prosperity, the model envisioned by the founders of Zionism. Now we have another opportunity. And as I prepare to leave for Washington I would like to call on the Palestinians and the Arab states not to miss this opportunity. Violence and the threat of violence can only multiply the misery. Your misery and our misery. Compromise and cooperation can turn this part of the world into a true promised land. Let us work together so that our children and grandchildren will compete not on the battlefield but on computers. Let us work together so that this region, which gave the world its three great monotheistic religions, will also give it the hope of permanent peace, stability, prosperity and brotherhood. |
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