Important as the emergency aid is, it is only a Band-Aid over the gaping wound at the heart of Israel’s economy.
This is not to belittle the emergency aid announced by Netanyahu and Finance Minister Israel Katz. Given the desperate straits facing the unemployed and self-employed due to the effects of coronavirus, increasing the economic safety net for salaried employees and businesses and expanding eligibility for unemployment benefits will provide much-needed breathing space for those people hit hard by the pandemic.
Despite frequent promises, around half of the NIS 80 billion previously promised to economic victims of coronavirus has not reached its intended recipients, due to inefficient government bureaucracy. The protesters were right to question whether it will be any different this time around, given this government’s poor track record.
Important as the emergency aid is, it is only a Band-Aid over the gaping wound at the heart of Israel’s economy. Where is the government’s strategy for kick-starting the Israeli economy, once coronavirus is again kept under control? What programs are being put in place to retrain the hundreds and thousands of unemployed and furloughed Israelis, many of whom will find that their old jobs no longer exist when coronavirus restrictions are lifted?
Netanyahu met with former Bank of Israel governor Stanley Fischer last week to discuss the economic crisis, who reportedly encouraged him to increase the national debt to fund government spending, given the low cost of borrowing on international markets. In such an environment, where are the government plans for vastly increased spending on the country’s much-needed economic infrastructure?
As the Organization for Economic Cooperation and Development noted in its report “The Long View: Scenarios for the World Economy to 2060,” public investment in infrastructure in Israel is less than 2% of GDP, which compares with 6% in the five leading countries in the OECD in this respect (Hungary, Norway, Luxembourg, Slovenia and New Zealand, in case you’re interested).
In a separate survey, the OECD furthermore stressed that Israel has a “large infrastructure deficit,” in particular singling out public transport, which causes “considerable road congestion and poor air quality and impedes access to the labor market.”
Above all, said the OECD economists, reforms and more public investment in education would improve the skills of haredim and Arab-Israelis, especially women, “allowing them to find well-paid jobs in high value-added sectors.”
If there was ever a time to prepare such a program of increased public investment, it is now. While the primary attention of the economists at the Finance Ministry and Bank of Israel will have been directed at the immediate financial implications of coronavirus, the prime minister should have made it his priority to insist on the preparation of post-pandemic plans, ready to roll the minute conditions allow.
Instead, our prime minister has spent the crisis forming the most extravagant government in Israel’s history – an untenable 36 ministers and 16 deputy ministers – and, most egregiously, devoting his energy into demanding a personal tax break worth an estimated NIS 1 million.
At a time when one in five Israelis are without work, the Knesset Finance Committee spent precious hours debating the income tax Netanyahu owes relating to upgrades to his government-provided car, renovations at his private home in Caesarea, and other expenses dating back to 2009.
Seemingly deaf to the economic woes of the citizens of the country he leads, Netanyahu is particularly sensitive to any hit to his own pocket. When Attorney-General Avichai Mandelblit recently ruled against Netanyahu’s request to receive some NIS 10m. in outside funding for his legal defense in his corruption trial, correctly saying the donation was tantamount to an illicit gift (one of the exact crimes for which Netanyahu is standing trial), the prime minister’s fury was unbridled.
In the space of two hours, the prime minister’s official Twitter account tweeted and retweeted nine posts excoriating the attorney-general, accusing Mandelblit of being part of a deep-state conspiracy to topple Netanyahu. Such unprecedented attacks, even for the multimillionaire Netanyahu, who, if push came to shove, could afford to pay for his own legal defense, show just how detached the prime minister has become from the real issues facing Israel’s citizens.
As public discontent grows concerning Netanyahu’s handling of the pandemic – gone are the days when he would daily boast on television that the world’s leaders were phoning him for advice as to how to combat coronavirus – his failures as a leader are becoming clear to all.
Coronavirus might yet claim another victim.
The writer is a former editor-in-chief of The Jerusalem Post.