A Growing and Thriving partnership: Israel and India

ISRAEL
Israel has a technologically advanced market economy with substantial government participation. It depends on imports of crude oil, grains, raw materials, and some military equipment. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel is largely self-sufficient in food production except for grains. Cuts diamonds, high-technology equipment, and agricultural products (fruits and vegetables) are the leading exports. Israel usually posts sizable current account deficits, which are covered by large transfer payments from abroad and by foreign loans. Roughly half of the government's external debt is owed to the US, which is its major source of economic and military aid. The influx of Jewish immigrants from the former USSR topped 750,000 during the period 1989-99, bringing the population of Israel from the former Soviet Union to 1 million, one-sixth of the total population, and adding scientific and professional expertise of substantial value for the economy's future. The influx, coupled with the opening of new markets at the end of the Cold War, energized Israel's economy, which grew rapidly in the early 1990s. But growth began moderating in 1996 when the government imposed tighter fiscal and monetary policies and the immigration bonus petered out. Growth was a strong 5.9% in 2000. But the outbreak of Palestinian unrest in late September and the collapse of the Barak Government - coupled with a cooling off in the high-technology and tourist sectors - undercut the boom and foreshadows a slowdown to 2%-3% in 2001.


Area (land): 20,330 sq km
Capital: Jerusalem
Government: Democracy
Population: 6.6 Million (growth rate ~1.5%)
Languages: Hebrew, English, Arabic
Religion: Jewish (80%), Christian (2%), Muslim (15%), Others (3%)
GDP (PPP): $119 Billion (2001 est.)
GDP Per Capita (PPP): $20,000 (2001 est.)
GDP real growth rate: -0.6% (2001 est.)
Telephone Lines: 2.8 Million, 47% penetration (2002 est.)
Mobile phones: 4.8 Million, 76% penetration (2002 est.)
Internet penetration: 42% (2002 est.)
PC penetration: 54% (2002 est.)

INDIA
Way back in 1951, India adopted the Soviet model of planning by setting targets in each sector for a five year period. During successive five-year plans, in force since 1951 the economy grew in real terms at an annual average rate of 4.9% during the period from 1965 to 1980 and 7% during the period from 1980 to 1992. Situations created by poor balance of payment, rupee devaluation, rising oil pool deficit, inflation, sluggish capital markets, general industrial slowdown and the Asian and Global recession have provided impetus to economic reforms initiated in 1991. The reforms covered economic liberalization, reducing government controls on production, trade, and investment. The result was reduction in the inflation rate and growth in export earnings. The process of economic liberalization unleashed by the Indian government has transformed the Indian economy from an inward looking and highly regulated economy to a transparent and market oriented one with emphasis on private sector participation.


Area (land): 2,973,590 sq km
Capital: New Delhi
Government: Federal Republic
Population: 1.05 Billion, growth rate ~1.5% (2002 est.)
Languages: Hindi, English, Urdu and 14 other official languages
Religion: Hindu (81%), Muslim (12%), Christian (2%), Sikh (2%), Others (3%)
GDP (PPP): $2.5 Trillion (2001 est.)
GDP Per Capita (PPP): $2,500
GDP real growth rate: 5% (2001 est.)
Telephone Lines: 39 Million, 4% penetration (2002 est.)
Mobile phones: 9.7 Million, 109% CAGR (10/2002 data)
Internet penetration: 11% (2002 est.)
PCs: Approximately 2,000,000