• Israel has a mixed economic system.

• According to the Index of Economic Freedom, Israel is 70% free and 30% command.

• Private businesses in technology, agriculture, and tourism, determine their own production of goods and services.

• Prices are based on supply and demand.

• While private enterprise plays a role in Israel’s economy, the government also has a hand in the country’s economic planning.

• The government controls the electric, natural gas, and aerospace industries, and most of the land is government-owned.

• It charges various taxes and controls prices on agricultural goods and banking services.

© Brain Wrinkles

• Israel has the most diversified economy in Southwest Asia.

• Its important industries include: mining, cutting and polishing diamonds, agriculture, & manufacturing tech equipment.

• Also, a high percentage of Israelis work in the service industry, as Israel is a popular tourist destination.

Israel’s Tourist

Destinations:

Jerusalem

Tel Aviv

1. What to Produce? Individuals and corporations; government has some regulations

2. How to Produce? Individuals and corporations; government has some regulations

3. For Whom to Produce? Individuals and corporations; government has some regulations

• Since its creation in 1948, Israel has been involved

in much conflict with its neighbors.

• Building up its national security and maintaining its

armed forces has put a strain on Israel’s economy.

• Another financial burden has been large volumes of

immigrants, even though they have brought

valuable skills to the country.

• In 1932, when Saudi Arabia became a nation, its economy was mostly traditional and consisted of trading camels, goats, & textiles.

• When oil was discovered, the Saudi royal family transformed the economy into mostly command and profited greatly from oil wealth.

• Today, the government still controls most of the oil industry, but it has begun to diversify the Saudi economy in other areas.

• The government has begun to encourage private enterprise in areas like power generation and natural gas exploration.

• With a large part of revenue now coming from private businesses, Saudi Arabia now has a mixed economythat rates as 64% free and 36% command.

• The government is trying to grow the private sector in order to diversify the economy.

• Private businesses are being asked to take on a greater role in education, healthcare, and tourism.

• The Saudi government has even started selling shares of the country’s petroleum company to the public.

Saudi Aramco is the state-run company that owns, operates, and

develops all of the oil and natural gas reserves in the country.

• Despite the recent changes, the Saudi government is still very involved in the country’s economy.

• It lets private companies make few decisions about production and prices.

1. What to Produce? Individuals and corporations; government has many restrictions on the oil industry

2. How to Produce? Individuals and corporations; government has many restrictions on the oil industry

3. For Whom to Produce? Individuals and corporations; government has many restrictions on the oil industry

• Income from oil accounts for 75% of the country’s

budget; however, oil supplies don’t last forever.

• Saudi Arabia’s unemployment rate is high.

• One-third of Saudi Arabia’s jobs are filled by

people from other countries because the country

has a shortage of skilled native labor.

• When Turkey became a country in 1923, its ruler Mustafa Kemal set up a command economy.

• Kemal believed the government should control & build the economy, so he invested in the country’s infrastructure: dams, electricity, ports, railroads, and roads.

• The government also developed important steel and weapon industries.

Mustafa Kemal Ataturk

• Reforms in Turkey since the 1980s have moved it to a mixed economy.

• Today, Turkey is by far the largest economy in the Middle East, and it rates as 65% free and 35% command.

• The Turkish government has aggressively privatized state-owned industries in recent years and private enterprise is growing in agriculture, electronics, textiles, automotive, and petrochemicals.

• Private companies are able to decide how much to produce and to set prices based on supply & demand.

• Much of Turkey’s land, businesses, and factories are privately owned.

Private enterprise is growing in the agricultural

industry.

• The state still has an active role in Turkey’s economy; it plays a major part in industry, communication, banking, and transportation.

• It charges taxes on businesses and some of its regulations are difficult to comply with, which has led to an increase in government corruption.

• The government sets price controls on electricity and some food items.

1. What to Produce? Individuals and corporations; government has some regulations on industry, banking, transportation, & communications

2. How to Produce? Individuals and corporations; government has some regulations on industry, banking, transportation, & communications

3. For Whom to Produce? Individuals and corporations; government has some regulations on industry, banking, transportation, & communications

• Turkey lies partly in Europe and partly in Asia.

• Because most of Turkey’s trade is with Western

Europe, so it has been trying for years to join the

European Union.

• Unfortunately, Turkey is considered a developing

nation and remains poor when compared to most

European countries.