PESTLE Analysis of the State of Israel

2002 (4 pages)
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Political Factors

So, coming to Politics, Israeli is a parliamentary democracy, based on a number of Basic Laws. It has no formal constitution. Religious political parties have in the past blocked all efforts to create a constitution. They hold the opinion that the Jewish state’s constitution must be based upon the Torah (The five books of Moses) and the Jewish Law (halakhah) that arises from it. The basic laws lay down the framework & powers of the executive, legislative & judicial branches of government, and concern special areas of Israel’s polity such as the economy, civil military relations & the status of Jerusalem.

Over the past decade, Israeli society has been shifting slowly but inexorably to right. Since the last elections, in March 2015, this slow-moving trend has accelerated dramatically, particularly in the ruling coalition. Most of the key positions in Israeli ministries, including justice, culture, education and defence, are filled by far-right or extreme nationalist politicians. Israeli society in general has become less tolerant of minorities, less democratic, less respectful of civil rights and less open to debate; the peace camp has withered. Organisations such as Breaking the Silence, which was established to collect testimonies from soldiers about the horrors of their military service in the occupied West bank, Gaza Strip East Jerusalem, have been intimidated into silence. Breaking the Silence has been delegitimised by the government and is prohibited from speaking at schools or national institutions such as the IDF. This is considered ‘muzzling’ of opinion by some segments of society. However, the majority of the public is moved by anger, frustration and fear and horrified by the events, such as the Arab uprisings and Islamic State violence, unfolding on its doorstep. Politicians are readjusting to the new status quo and even centrist parties are following the governments lead, not wanting to appear “unpatriotic” in the current climate.

Economic Factors

The army has always received the lion’s share of Israel’s annual budget. In 2016, the Knesset (parliament) approved a defence budget for 2017 and 2018 of 36.4$ billion, or 5.8% of the budget. According to the World Bank, Israel’s military expenditure as a percentage of Gross Domestic Product (GDP) was 5.3 in 2015. This was slightly lower than the estimated 6.2% of GDP spent on defence in 2012.

According to the Israeli Ministry of Finance, in 2012 the Israeli defence budget was 50.6 billion NIS or 14 billion USD, on a total national budget of 365.9 billion NIS (101.8 billion USD). According to the Stockholm International Peace Research Institute, in 2012 the Israeli military expenditure amounted to an estimated 56.5 billion NIS or 6.2% of its Gross Domestic Product (GDP) (for comparison: Jordon spent 4.6% of its GDP on military expenditure, Egypt 1.7%). According to the World Bank, military expenditure amounted to 14.6% of central government expenditure in 2015, a decrease when compared to 2010, when 16.2% of government expenditure was spent on the military. The research on the macro-economic impact of defence spending says that military expenditure reduces economic growth, except for some exceptional circumstances and countries. And, Israel is relatively unique in the sense that it has emerged as a rapidly growing and relatively developed economy over the last six decades yet continues to have one of the highest military burden (military expenditure as share of GDP) in the world. At the same time it has received very high amounts of economic and military aid from the United States which in turn contribute to both a higher defence spending (through an effective subsidy via military aid) but also to its economic growth (via the multipliers that foreign assistance may provide). So, if there is any one country in the world where military spending would potentially increase economic growth, it should be Israel.

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Social Factors

Israeli society is a melting point of cultures from all over the world, a society of contrast and vehement political debate, a land of freedom of expression alongside stringent military censorship, of religious orthodoxy that impregnates law and restricts civil liberties. It is also a society in which the military is inescapably present in everyday life, and one characterized by a poignant dividing line between the various communities. To this day, Israel has compulsory conscription. Men are called up for three years, and women for eighteen months to serve in the Israeli Defence Forces (IDF). Exempted from this conscription are all Palestinians living within Israel except for the Druze Community. A small minority of Bedouins volunteer for the IDF, often as trackers. Jewish Orthodox men who are students at a Yeshiva (religious school) and also Orthodox women are exempted from military service. The presence of the military in Israel’s daily life is often overwhelming for the first time visitor. Everywhere one can see soldiers with their weapons, walking on the streets, at bus stations, in shopping malls and even in discos. When making new acquaintances, for example, young people often use military service as one of their central points of reference. Where did somebody serve (in what unit or battalion), with whom, and what rank did he or she have? This information helps Israeli youths to categorize a new acquaintance, just as information about family, occupation, and place of residence can serve as reference points.

The military service of Jewish Israelis is still perceived as a natural part of life. One ‘gives’ to the nation and receives services and protection in return. Lately there have been some cracks in the support for the military, but it is still central to Israeli life. Military service and rank during one’s conscription, but especially for professional military personnel, have a great influence on occupational possibilities in civilian life. Men benefit almost exclusively from this. Women are excluded from important positions within the military and this marginality is carried over into civil society, where work possibilities are linked to a person’s military career. Palestinian citizens in Israel are excluded from some state services because they do not serve in the military.

Technological Factors

After 50 years of establishment, Israel has become an economic and technological powerhouse. It has the 21st highest per-capita GDP in the world; a recently-published United Nations report ranked it 23rd worldwide in its standard of living, based on per capita income, life expectancy and educational standards. Much of the progress is due to innovative abilities in the applied sciences and technology. As a country almost bereft of natural resources, special emphasis was placed, from the beginning, on the need for advanced education and scientific research. In fact, the combination of the educational and scientific infrastructure with the country’s most pressing problem unexpectedly made for a creative synthesis which set development into motion. An example of this synthesis is Israeli Military Infrastructure which is critical to the nation’s survival. Faced with well-equipped Arab armies and difficulty in obtaining weaponry from abroad, the Israeli leadership determined to do what it could to provide its own weapons.

Israel’s military industries occupy a special place in this division. Over the decades arms manufacturers such as Rafael, IAI and Ta’as have hugely expanded in scale and levels of sophisticated armoury, upgrading from producing basic fire arms to complicated weapon systems with a high technological content. Israel’s military industries – benefiting from huge public investments underpinned by decades of formidable financial transfers from the United States – were crucial in delivering vital so-called “spill-overs” to the advanced modern industries of today, both in highly skilled professional manpower and in technological expertise. High-tech exports accounted for 14 percent of manufactured exports in 2011, with a value of 8.8 billion USD. Export of ICT goods accounted for 10.7 percent of total goods exports (World Bank). Arms and security services account for roughly a quarter of Israel’s industrial exports and about 20 percent of industrial employment. In the last decades Israel’s arms exports have reportedly increased more than twentyfold, making the country the fifth largest arms exporter in the world.

What are the legal aspects and legal barriers that regulate the defence industry and can there be any change in the legislations for the industry? Changing security conditions demand a revaluation of the strategic and economic roles of the Israeli defence industry. In its earlier years, the Israeli government sought to achieve self-sufficiency and reduced reliance on defence imports. Today, however, the Israeli defence industry is largely focused on arms exports to the global market, with insufficient attention paid to the IDF’s military technology and equipment needs. It is time for a new balance between boosting private enterprise (arms sales abroad) and ensuring Israel’s military edge (supply of the IDF).

According to Gal Luft, Palestinian militants utilize a tactic of blending among civilian populations which exacerbates civilian casualties in Israeli attacks. He also says that the absence of independent “Western Media” in the Palestinian territories prevents accurate and reliable reporting on conflicts. Biased media coverage of Operation Defensive Shield, for example, encouraged militants to use civilians and refugees as “human shields” because they were not held accountable for their actions. The Israeli military claims it does not target civilians and that critics do not take into account the “realities” of war faced by IDF.

Barriers in Israel Defence Industry

  • The revenues depend on a continued level of government business.
  • The current worldwide economic and financial situation as well as reductions in U.S. and European defence expenditures may have a material adverse effect on our results.
  • The contracts may be terminated for convenience of the customer.
  • Industry depends on governmental approval of exports.
  • As a government contractor, it is subject to a number of procurement rules and regulations.
  • It depends on international operations.

Environmental Factors

Many countrywide projects were made for a safe removal of bottles campaign, the institution of eco-labelling on ecologically aware products, and various onslaught and recycling campaigns took place. Many laws have in recent times been passed to decrease pollution and other environmental dilemma.

Environmental Problems in Israel

  1. Air Pollution – In Haifa where for years the population suffer from the fumes emission of the local oil plant and the Israel Electric Company plant also it was suffer sulphur dioxide levels more than four time advanced than the regular permissible.
  2. Nature Protection and Wildlife Management – None of the neighbouring Arab states except Jordan, have been helpful to nature safety service and many home grown animals such as gazelles, ibex, hyenas and others are now very atypical in those countries.
  3. Pesticides – Although both the ministry of strength and agriculture are fantasy to monitor food quality, both stubbornly reject to discharge their answer to the public, maintain that “this would confound people.”
  4. Sewage – On the whole of systems used in Israel for acquit of sewage effluents and the sedimentation and exposure to air ponds and the sewage treatment plants are scarce to the demands placed on them today.

Proposal Taken By Israel Government for Healthy Environment Reforestation

  • David Ben-Gurion declared, “I do not know if there is a more productive endeavour whose results are useful as the planting of trees.” Israel is a worldwide leader of reforestation and life conservation.
  • Israel is one of the few countries that started the 21st century with added trees than it had at the start of the 20th century. Also the emphatic organisation has planted added than 240 million trees in Israel including 12,500 acres of forest every year.

Substitute Energy

  • In 2007, Israel was chosen as US’s partner in option energy investigates, temporary a law to give millions of dollars to finance joint investigate projects to help together country.
  • Israeli company Innowattech has urbanized a new substitute energy system that harvests mechanical energy imparted to roadways, railways and runways as of passing vehicles, trains and walker traffic and converts it into green electricity.

Water Conservation

  • From 1959, Israel has been a leader in water conservation with a popular slogan “Don’t Waste a Drop”.
  • Israel treats 92% of its wastewater and reuses 75% in agriculture which is the highest pace in the world.

Agricultural Development

  • Israeli company uses Bio-Bee Biological Systems like bumblebees and crop fly to support cross-pollination and control pests in an eco-friendly way.
  • Also an Israeli scientist urbanized a mixture of tilapia seek that thrive in burning, salty waters, which resulted ten times more fish to Israeli fish farmers.
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