For the first time in seven years, S&P Global—a firm known for its credit ratings—upgraded Israel’s rating to a higher-than-ever AA-. Moody’s also recently gave Israel a similarly positive upgrade. Predictably, opponents of the Netanyahu government pointed to the Israeli economy’s problems, such as inequality, the high cost of living, and so forth. Zev Chafets comments:
[The critics are] right about the extremely high cost of living, the scarcity of affordable housing, and the rate of poverty, which exceed those of most [advanced] countries. The Economist just named Tel Aviv the world’s ninth most expensive city. Currency appreciation has played a role in this. It also reflects the transformation that has made Tel Aviv an economic engine for the economy. Still, soaring housing prices . . . are a real issue for many Israelis. . . .
A credit rating is a judgment on a limited set of issues; Israel’s challenges are more complex than just the factors that impact its ability to borrow on international markets. Still, it shows that the terror problems that caused its credit rating to drop at the start of the century are no longer an overriding concern from that perspective. . . .
Israel is a world leader in everything from medical cannabis research to unmanned aircraft, from integrated circuits to water desalinization. It exports agricultural technology to poor countries, cut diamonds to the rich ones, pharmaceuticals, and, lately, entertainment to American networks. Israel has also managed to become a destination for both gay tourists and Christian pilgrims. . . .
Israel could be complacent, but it isn’t. Last week, Professor Isaac Ben-Israel unveiled a new national project. As an IDF general, he was the father of Israel’s widely admired anti-missile program. As a civilian, in 2010, he conceived and developed a cybersecurity ecosystem. Now, with government support and private investment, he intends to do the same for artificial intelligence. Ben-Israel’s plan, which has Netanyahu’s support, includes making AI and data science mandatory in high schools and universities, leveraging government investment to foster startups, cooperating with Intel and other foreign high-tech companies that already have Israeli research-and-development centers, and concentrating on areas in which Israel has a competitive advantage, including financial technology, healthcare, robotics, and the [so-called] “Internet of Things.”