t was only due to the ability to finance this deficit (the annual difference between imports and exports) that the Israeli economy was able to meet all of the challenges cited above. How did it do this? Basically, it financed this annual deficit through tremendous financial assistance that the country succeeded in raising around the world. The annual trade deficit increased from $220 million in 1949 to about $12.9 billion in 1996 (all in nominal terms). Each year, Israel's Finance Minister would recruit resources to cover this annual deficit. A small portion of this money came in the form of investments by foreigners in businesses in Israel; an even smaller amount came from pensions and other income from abroad of individuals in Israel; a significant amount came from appeals organized by Jewish institutions, and a large part came in the form of loans from individuals (primarily in the framework of Israel Bonds), banks and governments. More than half of the required amount came from grants from friendly governments (first and foremost, the United States). Over the years, this imported capital - to cover the annual deficits in foreign currency - has totaled more than $120 billion (in nominal terms).Growth of the National ProductGrowth - producing more and more - is of great importance to any national economy, as, indeed, it is to every individual and family. This is because the more that is produced, the more resources the country as a whole and individuals have to use to satisfy their varied needs and wants. Since it is people that are behind production, the more people active in a private or national economy, the greater the product. However, more important than the number of people participating (the size of the economy's work force), is the equipment available to them for performing their work. The more sophisticated this equipment, the more can be produced. This equipment can take the form of work tools, fields, animals, machines, or...
