1. The Israeli Economy and Society between Wars, Hi- Tech and Globalization Dr. Roby Nathanson Tel - Aviv, 20.6.08 Presentation to FFSI Group

2. Growth rates in Israel (1951-2005) Source: “Statistical Abstract of Israel No. 56.” (2006). Central Bureau of Statistics and “Preliminary National Accounts Estimates for the Third Quarter 2006.” (2006). Central Bureau of Statistics.

3. GDP of economic sectors in Israel (Quarters 2000-2006) (Quarters 2000-2006) Source: Central Bureau of Statistics, (2006), Time series – National Accounts.

4. Israeli Manufacturing production by Technological Intensity (1999-2005) Israeli Manufacturing production by Technological Intensity (1999-2005) Source: “Statistical Abstract of Israel No. 56.” (2006). Central Bureau of Statistics.

5. R&D Expenditure as a Percent of GDP, 2003 (or the latest year available) Source: Central Bureau of Statistics and OECD data.

6. Israeli Hi-Tech Employees by Age Israeli General Labour Market Employees by Age Source: Central Bureau of Statistics, ICT Sector estimates for 2006. Source of Data: Central Bureau of Statistics, ICT Sector estimate for 2006

7. The Distribution of Income (Gini Index) Source: World Development Report 2002

8. Source: The Central Bureau of Statistics Israel Total Employment Rate (Employed Persons Aged 15-64 as a Share of the Total Population of the Same Age Group, 2003)

9. How War Impacts the Economy War has a number of negative effects on the economy: 1.The loss of labour force and the destruction of infrastructures. 2.Disruption and often concomitant social disorder. 3.Diversion of public expenditure from output enhancing activities. 4.The destruction of capital stock. 5.Portfolio substitution of private agents.

10. The quarterly per capita growth rate preceding and following the Second Lebanon War Source: “Preliminary National Accounts Estimates for the first Quarter 2007.” (2007). Central Bureau of Statistics.

11. Survey: Public opinions on priority changes as result of the Second Lebanon War 1. Opinions on reducing welfare budgets in order to finance defense expenditures Jewish Sample Full Sample 9%10% Very Justified 13%14%Justified 18%17%Unjustified 60%58% Very unjustified ---1% Did not answer 100%100%Total

12. Survey: Public opinions on priority changes as result of the Second Lebanon War 1. Opinions on reducing different budgets in order to finance defense expenditures Total Did not answer Very unjustified UnjustifiedJustified Very Justified Full Sample 100%2%70%16%6%6%Education 100%1%76%13%6%4%Health 100%1%74%14%7%4% Children and the elderly Jewish Sample 100%1%70%18%6%5%Education 100%---76%15%5%4%Health 100%1%74%14%7%4% Children and the elderly

13. Poverty Incidence and GDP (1997-2005) Source: Foreign Trade Administration, (2005). Ministry of Industry, Trade and Labour,

14. Prediction of Poverty Incidence Source: Foreign Trade Administration, (2005). Ministry of Industry, Trade and Labour,

15. Thank you!