The share of Israeli exports in the US market has grown in the past decade
thanks mainly to an abundance of human capital and advanced technologies, the
Bank of Israel said in an excerpt from its annual report Wednesday.
An
examination of US import data shows that the composition of Israel’s exports is
similar to that of countries with far higher GDP per capita, an index created by
the central bank found. The index characterized various industries by the level
of development of the exporting countries. It found that in terms of
technological intensity of its exports, Israel ranks fifth among all countries
exporting to the United States.
This was because Israel specializes in
pharmaceuticals, medical and scientific equipment, and military equipment, all
of which are particularly human capital and technology- intensive, the central
bank said.
Israel ranked ahead of highly developed countries including
Germany, Sweden and Japan, which are characterized by hi-tech-intensive exports
but also export goods from industries that are typical of developing countries,
it said.
“We choose to interpret Israel’s high ranking on this index
mainly as a sign of the robustness of its exporting industries,” the report
said. “This is because the weight of exports in Israel’s GDP is high by
international comparison, and Israel has a surplus on its current account, while
countries that are experiencing difficulties in competing in world markets are
characterized in the main by a relatively small export sector and a
current-account deficit.”
Looking to the future, the bank predicted the
euro zone’s current economic crisis would lead to a reduction in the
manufacturing costs of European exports, which also specialize in technology-
and human-capital-intensive exports, and to a depreciation of the
euro.
It said these these two factors would enhance those exporters’
ability to compete with Israeli exporters for a share of the US
market.
The full version of the Bank of Israel’s annual report will be
released at the end of the month.
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