Israel's most striking economic achievement is the rate at which
it has developed while simultaneously dealing with the following
enormously expensive challenges: • Maintaining national
security: Israel now spends around 8 percent (as against over
25% in the 1970s and 23% in 1980) of its GDP on defense. Even in
eras of relative calm, Israel must retain a strong deterrent
capability. • Absorbing large numbers of immigrants: The
"ingathering of the exiles" is practically the raison d'etre of
the Jewish state. Since its inception, Israel has absorbed more
than 3 million immigrants, more than five times the number of
Jews living in the country when it attained independence in
1948. In its first four years alone, Israel's population more
than doubled as 700,000 immigrants, mostly refugees from postwar
Europe and Arab states, poured into the country. Since 1990
another wave of 1.2 million immigrants (940,000 from the former
Soviet Union alone), required enormous outlays for their
physical and social absorption. How