II.

Economy

Jerusalem is connected to Tel Aviv by rail and road links, and is also served by Israeli ports on the Mediterranean Sea. As municipal authorities do not encourage heavy industry developments within city boundaries, Jerusalem’s economy remains primarily service-based. Government and public service as well as tourism (including religious pilgrimages) and other service industries account for about two thirds of total employment in the city. The production of chemicals and pharmaceuticals, as well as electronics and the manufacture of electrical equipment, count among the most profitable industries; there is also printing and publishing, textile, shoe, and clothing manufacture, food processing, and some metal processing and machinery production. Traditionally, Jerusalem has also been known for diamond cutting and polishing, for local artefacts, and for gold and silver jewellery. Recently, new technologies have been playing an increasingly important role in the city’s economy, with the number of firms in that sector rising from 30 in 1990 to 200 in 1997.