Netanyahu Economic Revolution Far Greater than Reported

From Globes:

Foreign investment in Israel totaled $7.31 billion in January-August 2005, more than the $7.22 billion invested in 2004 as a whole....Foreign direct investment was $4.2 billion in January-August, 2.5 times the $1.66 billion invested in 2004 as a whole.

These numbers are part of the success story of the Netanyahu reforms. They illustrate that even minor improvements in economic freedom can lead to extraordinary improvements.

Direct foreign investment is up at an annualized rate of 380% this year. I believe this is the key indicator for future economic performance given Israel's size and isolation. It is investment in tangible assets such as factories and machines, as opposed to financial instruments such as stocks which demonstrate much less commitment and which do not directly lead to productivity gains. Productivity is the economic magic bullet because it drives real income increases for individuals and economic power for nations.

It is difficult to comprehend the enormity of the concept of exponential growth, but perhaps this example will help. If this rate of increase were to continue, it would take less than nine years for all of the current direct foreign investment in the world to be invested in Israel. At eleven years, it would consume all of the economic output of every nation on the planet.