Articles by : Bodnarchuk Tetyana Leonidivna№ 2/2022
International economicsBODNARCHUK Tetyana Leonidivna1
1State Institution "Institute for Economics and Forecasting, NAS of Ukraine", Kamianets-Podilskyi Ivan Ohiienko National University
POLICY OF THE TRANSITION FROM AGRICULTURAL TO HIGH-TECH EXPORT IN CONDITIONS OF PERMANENT MILITARY THREAT: ISRAELI EXPERIENCE FOR UKRAINE
ABSTRACT ▼
The Russian-Ukrainian war causes the loss of a significant part of Ukraine's production and raw and food export potential, which creates the risk of economic insecurity in the long run. At the same time, the new challenges create favourable conditions and opportunities for restructuring the national economy in the direction of developing high-tech areas and increasing the science-intensiveness of traditional industries. Today, the question is to choose the most effective institutional and economic mechanism for such a transformation, as exemplified by the State of Israel.
The article is devoted to the research of the Israeli practice of transition to high-tech production and the formation of an innovative export-oriented economy. The author aims to clarify the conditions, factors, mechanisms, and tools for the successful economic transformation of Israel in terms of the possibility of implementing the acquired historical experience in Ukrainian realities.
The methodology is based on a systematic approach, which considers the economic transformation of Israel as a set of processes and systems of closely interrelated elements (historical conditions, institutional factors, public policy, available resources, economic potential, etc.). It is necessary to apply the historical-evolutionary approach to identify the features and trends of the country's transition from traditional spheres of production and export to high-tech. In this context, comparative-historical analyse is used.
The precondition for the transition of the State of Israel to high-tech production and exports was the development of powerful science-intensive complexes of its own agricultural and defence production through targeted public and private investment, subsidies and loans to producers, stimulating education and research, a unique system of public-private partnership (so-called "gold triangle"). It is determined that the use of defence technologies in production of the double-purpose products (in space, aviation, cybersecurity spheres), the flow of intellectual capital, and the formed research base became the basis for the development of pharmaceuticals, electronics, microelectronics, computer hardware, and software, etc.
The key role in the Israeli transition to high-tech production and exports was played by state support policy implemented by grant funding instruments for education and R&D, venture capital incentive programs, tax and credit benefits for small and medium businesses, an extensive system of institutional assistance, and effective legal regulation of the business environment for the protection of intellectual property rights, granting special privileges, simplifying the procedure of repatriation of profits, ensuring high-quality products, etc. The policy of "arms diplomacy", trade liberalization, tax, credit, and institutional support of exporters, the conclusion of a system of agreements on international trade, and economic and scientific-technical cooperation contributed to the formation of the competitive advantages of Israel in the markets of high-tech products.
The publication is prepared within the research "Evolution of the paradigm and doctrines of economic interaction between the state and the market" (State registration №0119U10362)
Keywords:The State of Israel, agricultural production, defense-industrial complex, high-tech production and export, policy of state support, trade and economic liberalization
JEL: F13, N7, N75
Article in Ukrainian (pp. 93 - 122) | Download | Downloads :143 |
REFERENCES ▼
1. Nebrat, V. (Ed.). (2021). Historical determinants of Ukraine's inclusion in the system of international economic relations. Institute for Economics and Forecasting, NAS of Ukraine. Kyiv. Retrieved from
ief.org.ua/wp-content/uploads/2022/06/Istorychni-determinanty.pdf [in Ukrainian]
2. Zeira, J. (2021). The Israeli economy: A story of success and costs. Princeton University Press.
doi.org/10.1515/9780691229706
3. Rivlin, P. (2019). The Israeli economy. London: Routledge.
doi.org/10.4324/9780429312045
4. Shalev, M. (1992). Labour and the political economy in Israel. Oxford.
doi.org/10.1093/acprof:oso/9780198285137.001.0001
5. Nitzan, J., & Bichler, Sh. (2002). The global political economy of Israel. London: Pluto Press.
6. Sharkansky, I. (2017). The political economy of Israel. London: Routledge.
doi.org/10.4324/9781315133867
7. Neuberger, B. (1997). Power and policy in the State of Israel. Historical roots and constitutional structure: Religion, state and policy. Tel Aviv: Open University Press [in Russian].
8. Levi-Faur, D., Sheffer, G. & Vogel D. (Eds). (2014). Israel: The dynamics of change and continuity. London: Routledge.
doi.org/10.4324/9781315039633
9. Senor, D. & Singer, S. (2019). Country of startups: History of Israel economic miracle. Kyiv: Yakaboo Publishing [in Ukrainian].
10. Abraham, D., Ngoga, T., Said, J., & Yachin, M. (2019). How Israel became a world leader in agriculture and water. Insights for today's developing countries. Institute for Global Change.
11. Aharoni, M. & Aharoni, S. (2006). Industry and economy in Israel. Miksam.
12. Shibalkina, Yu. (2016, February 15). Some lessons of Israel for Ukraine. The Project "Popular economy: Price of the State". Retrieved from
old.cost.ua/files/report-on-israel_revised-2016-02-14-this-one.pdf [in Ukrainian].
13. Pustoviit, R.F. (2018). Formation and development of defense-industrial complex of Israel as a leading factor in Israeli innovative economy. Zbirnyk naukovykh prats Cherkaskoho derzhavnoho tekhnolohichnoho universytetu. Seriia: Ekonomichni nauky – Collection of scientific works of Cherkasy State Technological University. Economic series, 48, 83-90.
doi.org/10.24025/2306-4420.0.48.2018.127350 [in Ukrainian].
14. Chmeruk, T. (2020). Experience of Israel as the development innovative country. Retrieved from
economy.24tv.ua/ru/opyt_izrailja_kak_razvitoj_innovacionnoj_jekonomiki_n1269370 [in Russian].
15. Ozturk, І. (2018). Innovations in the desert: How and why Israel has become the "cradle" of agricultural startups. Agravery: agricultural information agency. Retrieved from
agravery.com/uk/posts/show/innovacii-u-pusteli-ak-i-comu-izrail-stav-koliskou-agrostartapiv [in Ukrainian].
16. Khanin, V. (2015, July 15). How Israeli identity was formed. Zbruch. Retrieved from
zbruc.eu/node/39033 [in Ukrainian].
17. Danylyshyn, B. "Yozma" for Ukraine. Retreived from
lb.ua/blog/bogdan_danylysyn/294057_yozma_ukraini.html [in Ukrainian].
18. The Israeli Government (1994). General Agreement on Tariffs and Trade. Trade Policy Review Mechanism Israel.
19. Israel Export Institute (2021). Israeli Economy: Past, Present, Future.
20. Laws of Palestine. (1959). Encouragement of Capital Investments Law. Retrieved from
main.knesset.gov.il/EN/about/history/documents/ kns3_investments_eng.pdf
21. Shalen R. (2007). R&D Support in Israel – From Objectives to Policy. Retrieved from
www.tau.ac.il/~shalemro/content/israel.pdf
22. Law Insider. Israeli Restrictive Trade Practices Law definition. Retrieved from
www.lawinsider.com/dictionary/israeli-restrictive-trade-practices-law
23. Belousov, S. (2010). Israeli military-industrial complex: The role of weapon export. Mirovaya ekonomika i megdunarodnye otnosheniya – World economy and international relations, 2, 57-63.
doi.org/10.20542/0131-2227-2010-2-57-63 [in Russian].
24. Globes. (2000). How Israeli High-Tech Happened. Retrieved from
en.globes.co.il/en/article-258771
25. Amelin, A. (2022, March 28). Following the example of Israel. How Ukraine can rebuild its economy after the war. NV. Retrieved from
nv.ua/ukr/opinion/viyna-rosiji-proti-ukrajini-yak-ukrajini-vidnoviti-ekonomiku-pislya-viyni-izrajil-ostanni-novini-50229005.html [in Ukrainian].
26. Getz, D., & Tadmor, Z. (2015). Israel must prepare for tomorrow's scince-intensive industry. UNESCO science report: towards 2030, 412-413 [in Russina].
27. Bakertilly. Tax benefits for preferred technological plants. Retrieved from
www.bakertilly.co.il/en/tax-benefits-for-preferred-technological-plants/
28. Michaely, M. (2012, May). Trade liberalization in a small open economy: The case of Israel. The Oxford Handbook of International Commercial Policy. Edited by Mordechai E. Kreinin and Michael G. Plummer, 336-355.
doi.org/10.1093/oxfordhb/9780195378047.013.0014