How much is the State of Israel worth?
The Tel Aviv Stock Exchange set out to find out, using a model developed by the World Bank, and it revealed the figure Tuesday as Finance Minister Moshe Kahlon formally opened the trading day.
In fact, share prices fell for their fifth straight day Tuesday but that had no impact on the assessment of Israel’s value calculated using World Bank criteria include natural capital, produced capital, net foreign assets and, most important for Israel, human capital.
According to these conventional data criteria, the wealth of Israel is estimated at 16 trillion shekels ($4.3 trillion). However, if you take into account the assessment of the Israeli public, the figure rises slightly, to 17.6 trillion shekels.
Kahlon took some of the credit for this, noting Israel’s long record of interrupted economic growth and its falling level of debt to gross domestic product. He likewise warned that no economy’s future is secure and pointed to the rapidly deteriorating situation in Turkey.
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“The economy is cyclical, there is no insurance policy for anyone,” Kahlon said. “We’ve seen what’s happened in Turkey: One step by Trump created a roller coaster. At the moment, our situation is good, but economic crises have been and will be. ... My responsibility as finance minister is to prepare the country for the crisis too, because I will not be there three or four years from now.”
The World Bank report “Changing Wealth of Nations,” released last January, tracked the wealth of 141 countries between 1995 and 2014, though Israel was not among them, which led the TASE to do the work itself.
The components that go into national wealth are natural capital, which value all its natural resources, such as oil and (in Israel’s case) natural gas; produced capital, which includes man-made assets such as buildings and machinery; net foreign assets, which are assets held overseas; and finally human capital, which values a country’s labor force by its future earnings ability.
The Israeli public, whose opinions were solicited through surveys of tens of thousands of people, shows high levels of optimism about the future regarding key metrics, which were used to revalue national wealth to the higher figures.
The poll found Israelis were most confident about the country’s high-tech future (77.9% expressing optimism), followed by security (62.8%) and standard of living (47.2%). Fewer, however, were confident about health (39.2%) and education (35.3%).