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Israel has a lack of arable land, which increases their cost. Israel must either import many products, or develop them at a higher cost domestically.

"Despite limited natural resources, intensive development of the agricultural and industrial sectors over the past decades has made Israel largely self-sufficient in food production, apart from grains and beef. Other major imports to Israel, totaling US$47.8 billion in 2006, include fossil fuels, raw materials, and military equipment. Leading exports include fruits, vegetables, pharmaceuticals, software, chemicals, military technology, and diamonds; in 2006, Israeli exports reached US$42.86 billion.

Although Israel is a largely self-sufficient food production, they lack in arable land use. This increases Israel's demand of outside assistance and causes any home produced goods to be more expensive. Increased expensive of goods diverts resources from more productive areas of the economy, which slows long-term growth rates."

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