While Americans suffer from rising prices, and analysts are warning of an imminent recession, the Jewish state is managing to maintain growing prosperity. This despite the fact that it is heading toward the fifth election in four years and facing a surge of terrorism—not to mention the graver threats from a near-nuclear Iran. Matthew Winkler writes:

Israel’s perennial headlines obscure a greater reality, which is that the Mideast nation of nine million is an economic juggernaut. It has the fastest growth and one of the lowest rates of inflation and joblessness. On top of that, the shekel is the world’s best-performing currency among the 31 that trade actively and the only one that strengthened against the dollar the past decade.

Unlike any of the 34 developed economies, Israel is poised to achieve 5.2-percent gross domestic-product growth in 2022, 3.5-percent in 2023, and 3.5-percent in 2024, according to more than a dozen forecasts compiled by Bloomberg. With unemployment at 3.5 percent and inflation at 4.3 percent (around half the annualized rate for the U.S. and European Union) Israel is proving to be the benchmark not only for stability, but for innovation as well.

From auto parts to medical-equipment solutions to food, water, and climate change, technology made in Israel is transforming the world’s biggest industries. This hub of innovation includes Mobileye Global Inc., the creator of vision-based driver assistance systems for 50 car makers, or 70 percent of the global market. Mobileye recently filed with the U.S. Securities and Exchange Commission for an initial public offering valuing the Intel Inc. unit at as much as $30 billion. Also, there’s Nanox Imaging Ltd., serving governments, hospitals, and clinics with cloud-based image analysis, online diagnosis, and billing services while developing a 3D medical-imaging device; [and] Innoviz Technologies Ltd., the maker of light-detection ranging (Lidar) sensors and perception software for autonomous driving.

On Tuesday, a Hizballah drone attack injured three people in northern Israel. The next day, another attack, targeting an IDF base, injured eighteen people, six of them seriously, in Arab al-Amshe, also in the north. This second attack involved the simultaneous use of drones carrying explosives and guided antitank missiles. In both cases, the defensive systems that performed so successfully last weekend failed to stop the drones and missiles. Ron Ben-Yishai has a straightforward explanation as to why: the Lebanon-backed terrorist group is getting better at evading Israel defenses. He explains the three basis systems used to pilot these unmanned aircraft, and their practical effects:

These systems allow drones to act similarly to fighter jets, using “dead zones”—areas not visible to radar or other optical detection—to approach targets. They fly low initially, then ascend just before crashing and detonating on the target. The terrain of southern Lebanon is particularly conducive to such attacks.

But this requires skills that the terror group has honed over months of fighting against Israel. The latest attacks involved a large drone capable of carrying over 50 kg (110 lbs.) of explosives. The terrorists have likely analyzed Israel’s alert and interception systems, recognizing that shooting down their drones requires early detection to allow sufficient time for launching interceptors.

The IDF tries to detect any incoming drones on its radar, as it had done prior to the war. Despite Hizballah’s learning curve, the IDF’s technological edge offers an advantage. However, the military must recognize that any measure it takes is quickly observed and analyzed, and even the most effective defenses can be incomplete. The terrain near the Lebanon-Israel border continues to pose a challenge, necessitating technological solutions and significant financial investment.