Flourishing amidst the bombs

‘tis a puzzlement. How could
"A bloody and costly war, the constant threat of terror attacks, a string of political scandals and a land almost devoid of natural resources."
"the backdrop for the most impressive economic success story of the modern Middle East."?
According to this report, Israel managed to do the almost impossible thanks mostly to
"Binyamin Netanyahu, who as Finance Minister in 2003 cut a deal with the Prime Minister, Ariel Sharon, that gave him free rein to push through market reforms. Mr Netanyahu sold off state assets, liberalised Israel's monolithic banks and slashed its corporation taxes."
As a result
"Despite the war with Lebanon, 2006 was a golden year for the economy of the region's only liberal democracy. GDP grew by 5.1 per cent, competitiveness improved sharply and the stock market surged.

"Israel came fifteenth in the World Economic Forum's global competitive index, topping the list of Middle East states and up from 23rd place the previous year. Its nearest regional rival, the United Arab Emirates, came 32nd.

"In recent years, this small state has turned itself into a "world technology powerhouse", according to Augusto López Claros, the WEF's chief economist."
While there is much more than this (Israel's thousands year old history, religion and culture is obviously integral to their success), free markets and a free people can do wonders.  Hopefully this can serve as a shining example for the rest of the world, including the United States. Freedom can accomplish more than state-run institutions.