Business
Israeli exports: How do you prepare for the day after the corona?
Israeli exports overcame the corona crisis and even intensified, but the damage to world trade requires preparations that will ensure the projected growth for 2021. What must the State of Israel do so as not to damage the lifeblood of the economy?
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Export Institute
foreign trade
Corona
Export
export
Adiv Baruch, Chairman of the Export Institute
Wednesday, 10 March 2021, 08:46 Updated: 09:01
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At the end of a year from the outbreak of the corona plague, the cumulative damage can already be estimated.
One of the areas most affected by others is world trade, which is estimated to have fallen by more than 9%.
Shutdown of production systems, closure of airports, damage to the supply chain, rising transportation prices and declining demand due to closures - all of these have led to this dramatic decline.
Against the background of these data, it is possible to draw encouragement from the fact that Israel's export data were better.
A summary of the 2020 data shows that total Israeli exports decreased by only 3%.
Two factors have contributed to this: the first is the increase in exports of high-tech services, especially software and R&D services, which contributed to offsetting the 4% decline in merchandise exports; the second is the ability of foreign trade and exporters to adapt quickly to the new situation. Marketing and trade.
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Chairman of the Export Institute, Adiv Baruch (Photo: Ronen Ackerman)
Target: $ 115 billion
Shortly after the outbreak of the crisis, the token among the various factors responsible for promoting exports fell, that the physical meetings - conferences, exhibitions, presentations, B2B meetings, which are at the heart of the export marketing and promotion process - should be converted into a comprehensive set of virtual meetings.
The rapid deployment on the digital and human infrastructure side has meant that a significant part of the planned events took place by virtual means and created important business continuity.
Furthermore, unplanned meetings and events were added.
As a result, most of the establishments whose products are intended for export continued to work and export, although in varying degrees according to the industry.
Both the government on its affiliates and the exporters have demonstrated a heroic effort to minimize the harm to exports.
But it is worth remembering that the effort is not over.
The state of the world economy is still riddled with much uncertainty.
The predictions that a rapid economic jump will be experienced in 2021 seem too early today, in light of the spread of the various mutations.
However, the recovery is already significant and according to the Export Institute's forecast, in the current year, 2021, exports are expected to grow by about 7% in dollar terms and reach a volume of about $ 115 billion.
Israel's economic anchor
One good reason for optimism is the recent normalization and peace agreements with a number of Arab countries, and especially the peace agreement with the United Arab Emirates.
Apart from the clear political benefits of this agreement, it is also expected to have significant effects on the Israeli economy and its foreign trade.
Another reason is the change in the export mix, where the weight of the export services sector is almost equal to the commodities sector due to an accelerated increase in software exports.
However, along with the relatively good picture, one must also remember the challenges facing Israeli exports.
For example, the need to integrate more and more small and medium-sized enterprises into the export system, with an emphasis on Arab society.
The dollar exchange rate is also still depressing.
We will also mention that world demand has not yet returned to pre-crisis levels.
All of these require treatment in order to improve the conditions under which Israeli exporters operate.
The corona has once again illustrated to us that exports are the main anchor on which the Israeli economy rests.
Israeli exports also strengthened in the crisis year and became more resilient and immune to crises.
In the coming year we will have to continue to assist Israeli exporters and lead Israeli industry to reach international markets to expand its activities, but knowing that despite advanced technological means, there is still no substitute for business meetings, personal acquaintance and basic human connection.
The author is the chairman of the Israeli Export Institute, which was established with the aim of helping Israeli industry reach international markets.
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