Figure 1.--.

Mixed economies also energed in the Third World countries of Africa, Asia, Latin America, and Middle East. One common thread in many of these countries were devlopment strategies involving a major role for state institutions. Socialism as conceived by Marx was a stage of ineconomic development that followed industrialization. The Revolution occurred, however, in Russia a largely agrarian society. The apprent success of the Soviets in modernizing the Soviet Union caused many Third World countries after World War II when they became independent to turn to state controlled central planning. Also the colonial experience was such that many leaders in the developing countries rejected the preceived policies of the colonial powers. The results in many countries was discouraaging. Many countries achieved only minimal growth rates and quite a number experienced negative growth rates. The actual experiences varied greatly from county to country. Here the national experience with ecinomic development involkved more than economics, but a wide range of historical, political, and cultural factors.

Africa

Asia

Latin America

Middle East

Israel

An importatant part of the early Jewish experience in Palestine was the kibnutz, agrarian cooperatives. Most early immigrants were Europeans many with strong socialist political leanings. Israel at independence was still a largely undeveloped country with little industry, not unlike the Arab states which surround it. There was a string influx of Europeans seeking refuge from the World War II Holocaust. The population, however, should not be seen as only European. Large numbers of Middle Eastern Jews also found refuge in Israel. The country adopted many socialist policies. The economy, however, languished, although grew much faster than that of the Arab countries. Israel survived to alarge degree on a combintion of foreign aid and private donations from the United Sates and to a lesser extent Europe. An economic embargo created problems because the Isrealis could not do business in the region and shipping costs affected their ability to compete. The Arabs embargo also cause many large international business to stay out of Israel. Isreael's socialist government was replaced (1977). The new Likud government adopted many free enterprise reforms. These included the abolition of different dollar rates, economic controls, and high taxes on luxury goods. The initial result was horendous inflation under Minister of Finance Aridor. He was dismissed and draconian controls were imposed. Israel's economic problems were finaly solved by the hi-tech and software industries. These industries took advantage of one of Israel's few resource--hhuman resourrces. Software does not require a large industrial base. The shipping costs are minimal and thus Israel's location is not a disadvantage. Despite the disruption of a war with Lebanon in the north, 2006 was Israel's most successful year ever. Israel achieved its first favorable balance of trade ever. The Israeli currency which traditionally had been weak, appreciated by about 15 percent against the U.S. dollar.

Created: 1:10 AM 1/10/2007
Last updated: 1:10 AM 1/10/2007