The Future of Israel's Economy
Yohanan Plesner, President of the Israel Democracy Institute, opened the first session on establishing national, long-term strategies: "Rather than initiatives that curb the power of gatekeepers, legal advisors, and the Supreme Court, we must implement effective structural changes that tackle the problems embedded within our system of government.”
Naftali Bennet | Credit Yossi Zeliger
Minister of Education Naftali Bennett at IDI's Eli Hurvitz Conference on Economy and Society in Jerusalem said: "I believe that we the ministers, have the tools, and the capacity to advance the ultra-Orthodox community and integrate them in the labor force and the capacity to integrate and open up opportunities for the Bedouin population in the south. Let us look at the way mathematics and science are taught in schools in Israel as a case study. From 2006 to 2015, Israel had consistently declined in these subjects. A large divide was created between the strong and the weak. In Hatzor Haglilit and Rahat there were practically no students who completed 5 math units. Today I can announce that I have already surpassed the goal of doubling the number of students who complete 5 units of mathematics, and I hope that in the coming weeks we can safely say that we have met our goal. Last year we already saw 16,500 finalists. If we ministers are determined, and focus on doing the right thing, everything can be fixed.
Ayelet Shaked | Credit: Yossi Zeliger
Ayelet Shaked, Minister of Justice said today: " De-facto regulation in the financial sector is driving the market crazy, we have to see how we can fix it”. Shaked also commented on the proposed bill regarding the appointment of attorney generals: “We are not talking about political appointments, or appointing party members to the position. The attorney general’s job is to ensure that Ministers' policies are carried out in line with the law – and most of the AGs do exactly that.”
Shaked added, "When I started my tenure in the Ministry of Justice, I inherited the previous minister’s attorney general – and it was wonderful. Nevertheless, I think that when a new minister takes office they should be actively involved in appointing the next attorney general. I don’t think ministers being involved is necessarily a bad thing. When a minister helps to appoint their office’s attorney general, it does not directly follow that the minister controls them.
Dr. Karnit Flug | Credit: Yossi Zeliger
According to Dr. Karnit Flug Governor of the Bank of Israel, "There is an inherent tension between the government's agenda and the implementation of long-term policy, which is intensified when the government rests on a fragile coalition made up of multiple parties. One solutions, is strengthening the professional echelon of the government ministries, which deal with long-term policy.
Transportation infrastructure is another example of the challenges of implementing a strategic plan. The poor quality of public transportation infrastructure in Israel is an outcome of the fact that the programs in place to improve it face many obstacles when it comes to the implementation stage, and significantly deviate from their timetables. Therefore, long-term investments are small - and the plans are simply being executed inefficiently."
Flug noted other examples of issues that were not promoted in the government's strategic plan: "The Financial Stability Committee serves as another example of an issue that has not made progress. Raising of the retirement age for women was halted by the Finance Committee, and the handling of the the National Insurance Institute's deficit has not been dealt with yet. What these issues have in common - is that taking care of them will not bear fruit immediately, not when it involves public ownership. No politician wants to be accountable for a crisis that has not yet happened.”
“If we want to invest in infrastructure, we have to choose between raising taxes – which the public opposes, and increasing the national debt- which the government opposes. To my understanding raising taxes is the better choice”, said David Brodet, Chairman of the Board, Bank Leumi, at the Eli Hurvitz Conference on Economy and Society today in Jerusalem.
David Brodet said: “The past decade has seen low productivity and a threat to growth. Net social inequality has deepened. If we continue to ignore the excluded sectors of our society such as the ultra-Orthodox and Arab citizens, Israel will not foster economic growth. We have major problems in developing national infrastructure. If we want to invest in infrastructure, we must choose between raising taxes – which the public opposes, and increasing the national debt – which the government opposes. To my understanding raising taxes is the better choice, but this has to be discussed further.”
Prof. Eugene Kandel, Hebrew University; CEO, Start Up Nation Central; Conference Chair of the Eli Hurvitz Conference on Economy and Society said: “The political leadership does not feel pressured to prepare long-term strategic policy. If the public does not demand it, it simply won’t happen. When we embarked on this initiative, one of the most important things we launched was an assessment of the economic situation in Israel which was presented to the government each year. Three positive outcomes of our work were: 1. solving problems such as the shortage of skilled personnel in high-tech; 2. The strategic plan to address the housing crisis; and 3. the establishment of a “digital Israel” (government initiative). These processes have propelled the government forward, but there is still much more to be done.
"The very fact that those in power can be replaced every two years is unhealthy, regardless of who is in government. This is one of the challenges facing long-term investments in Israel's economy." said Mr. Shai Babad, Director General, Ministry of Finance at the Eli Hurvitz Economic and Social Conference in Jerusalem.
"If we want to continue encouraging growth, we must increase productivity. The Ministry of Finance has to fuel growth while simultaneously closing the socio-economic gaps that exist within our society.
Former Minister Gideon Sa'ar emphasized the need to diminish the bureaucratic burden in Israel that is an obstacle to foreign investment, economic growth and reducing the cost of living. He also spoke of the importance of setting measurable goals when tackling social issues. Sa’ar also suggested that a different approach to general reform in Israel's education system could only be achieved if we improve the way teachers are treated.
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