Eli Hurvitz Conference Day 2 Summary

“The issue I want to talk about is extremists versus moderates. Those who want to destroy and tear apart, versus those who want to build. And that’s what these elections are about. This is the struggle we have to win.” Alternate Prime Minister and Foreign Minister Yair Lapid

Minister Yair Lapid

(Jerusalem, June 22, 2022) Alternate Prime Minister and Foreign Minister Yair Lapid opened the second day of the Eli Hurvitz Conference on Economy and Society, organized by the Israel Democracy Institute, and spoke about the upcoming elections: “The issue I want to talk about is extremists versus moderates. Those who want to destroy and tear apart, versus those who want to build. And that’s what these elections are about. This is the struggle we have to win.”

“We’re in a struggle between extremists and moderates. People who want to destroy and those who want to build. Our flag does not represent violence and racism, but rather those who believe in a Jewish and democratic state."

“Most Israelis want to live together in peace. They do not want a government based on violence and hatred here. They know it's not a way to live. They know that not only does their democracy protect them, they also need to protect their democracy.”


MK Benny Gantz

Deputy Prime Minister and Minister of Defense MK Benny Gantz spoke about the upcoming election campaign:

“We have a clear message: Governments that do not act in the interests of the future cannot breathe in the present. And the future, honored guests, means strengthening the Negev and the Galilee. I hope that in four months’ time, a stable, central, broad unity government will be formed that will protect Israeli democracy and will be able to develop the state and Israeli society, both internally and vis-à-vis the regional and global environment. For this to happen, all the political leaders with the country’s interests at heart will need to make decisions that in the end will make the whole greater than the sum of its parts.”

In the rest of his speech, the Defense Minister spoke about six main challenges facing the State of Israel:

“I want to rise above the day-to-day problems and talk to you about six strategic challenges for Israel, which we are trying to look at with a view to the coming decades.

“The first of these, which I’ll talk about less, is the Iranian challenge. There is no doubt that we are in a strategic race with Iran, in all areas: economic, technological, operational, military, nuclear, terror, and regional cooperation. I would repeat that Iran is a global problem, a regional problem, and also a threat to the State of Israel. I don’t think it should be presented as an Israeli problem; it’s a broader problem. Of course, we need to reserve freedom of action for ourselves on this issue, and Iran under the current regime will continue to present a challenge to the world, to the region, and to Israel, and one we will have to address.

As for the Palestinian issue: “Our second challenge is the need to put in order our relations vis-à-vis the Palestinians while maintaining both our security and our Jewish democracy. In the end, I believe in an arrangement in which there are two entities, and in which the State of Israel is responsible for security, because otherwise it will fall apart, if each is busy managing its own affairs. Integrated economies, but [political] separation from the Palestinians. We sought to establish a Jewish and democratic state, a just and flourishing general state, and what we don’t want in the coming years is either a stronger Hamas or a single [binational] state. Neither that nor that. I am trying to create a better and more meaningful state of affairs, from which we will be able to create permanent arrangements.”

In addition, “maintaining our strategic relations with the United States and the international legitimacy that Israel needs to have—these are issues that are related to our ability to secure that legitimacy and to strengthen our ties with Diaspora Jewry and US Jewry. I meet regularly with Jewish organizations; I want to see as many young faces there as possible, this is a really important struggle.

“The fourth issue is economic resilience, and it comprises the things you are talking about—the labor market, increasing productivity, innovation, and education, and all this with a really important emphasis on accelerated development of the Negev and the Galilee, and investment in broad infrastructure throughout the Negev and the Galilee. We are a small country, and we should enjoy the benefits of our relatively small size. We need to invest in infrastructures in communications, in transport, in education, employability, and development.”

“The fifth challenge is strengthening governance, the rule of law, and democracy. Recently, there have been twin trends in Arab society of rising violence and femicide alongside rule by criminal families—an immensely serious issue. The phenomena of public disturbances and terror activity are things we did not witness in previous security crises. We need to devote significant attention to this.

“The sixth challenge is the sense of cohesion in Israeli society—right and left, Jews and Arabs, secular and religious. We cannot maintain our society without making sure we get to know one another and talk with one another. This is not a question of compromise, because compromise is a negative concept; it is a question of consensus, how we learn to agree with one another and what we can agree on.

“I’m aware that I haven’t mentioned Hezbollah, Hamas, and other terror [groups]. I’m not ignoring the issue, but I see it as an operational problem, whereas I have tried to focus on strategic areas. If war comes, it will be tough, and we will win. Looking down the generations, we can overcome any defense challenge, from Iran to the Palestinians. We have all the means to maintain our special relationship with any US administration, I’ve met with those on both sides. Israel does not have another United States, and the United States does not have another Israel—they know this too. There is no other country with such a diverse population mix as the United States. We have every capability to maintain the relationship.

“These are the things I’m concerned about, and that I’m dealing with. I’m very worried, not just concerned, about our social and economic resilience, aspects of law and order and internal solidarity in Israeli society. I’m worried about the inner strength it built and which brought it to where it is now.

“Hovering above all these challenges there is a very dark cloud related to two important parts of the country—the Negev and the Galilee. I want to focus on them because I believe that that’s where the future will be decided, for better or for worse. If we don’t act—and I want to give a clear answer here: before it was established, Israel accepted the partition plan, and the War of Independence erased it de facto—if Israel does not undertake a national strategic effort, working actively and continuously over time to strengthen the Negev and the Galilee, then it is effectively adopting the partition plan again. This is something we cannot allow ourselves as a democratic state, and we owe this to the populations who live there. The north and the Negev suffer from being adjacent to our borders and from security dangers that we need to deal with. The Negev and the Galilee are far from the public eye, and they need long-term investment that is less rewarding for politicians in the short term. This is the root of the problem.”

Minister Orna Barbivai

Minister of Economy and Industry Orna Barbivai: “I very much hope for governmental stability, and I know that there are excellent people in the public sector who want to execute plans but cannot do so because of a lack of ability to actualize budgets. I very much hope that in any political scenario, stability will be possible, so that the state can function, in order to maintain the momentum of action.”


MK Nir Barkat

MK Nir Barkat, Likud: “I will support the teachers’ demands, but I want to set the bar higher for the education system in the State of Israel.”

MK Nir Barkat spoke this morning at a session on “Challenges in the Labor Market,” at the Eli Hurvitz Conference for Economy and Society held by the Israel Democracy Institute, and among other topics, he related to Israel’s education challenges: “In the State of Israel, we now have 350,000 hi-tech workers, with the potential to reach two million in 25 years’ time. The main obstacle preventing us reaching that target is the production capacity of the education system. We all understand that there is a shortage of teachers, and if this continues, it will mean that we our shooting ourselves in the foot. We must upgrade the profession of teaching. I will support the teachers’ demands, but I want to set the bar higher for the education system in the State of Israel.”

Regarding the country’s political instability, MK Barkat said: “We pay a heavy price. We need to create a mechanism for deciding [on a government] which is based on broad consensus… The entire paradigm needs to be changed, because even when you are elected you are paralyzed and can’t do anything, because of the layers of bureaucracy.”

In closing, Barkat spoke about the issue of investment in the periphery: “Today, the bureaucracy at the Finance Ministry, as part of a longstanding policy, aligns itself with the demand for the center of the country. We need to create demand for the periphery, via a basket of services, an employment model, infrastructure, and dealing with obstacles of internal security and health.”

Session chair Prof. Karnit Flug, Vice president of Research at the Israel Democracy Institute and former governor of the Bank of Israel: “The high correlation coefficient of income ranking between parents and children is connected to education. Israel has relatively low intergenerational mobility, and education explains most of the intergenerational linkage across the different population groups.”

“The long-term challenges are still with us. Large differences in productivity and wages, due among other factors to differences in skills and capabilities, and to a lack of workers with other skills, which hinders success in other sectors of the economy. The solutions lie in the education system, in professional training.”

“By contrast, the short-term challenges are changing rapidly. Over the last two years, with the coronavirus pandemic, we saw a very sharp rise in unemployment, and we wondered how long it would take for employment demand to return to its previously high levels. Various different population groups suffered from this blow to employment. Today, we are in a post-COVID labor market.”

Minister of Economy and Industry Orna Barbivai also spoke at the same session on “Challenges in the Labor Market,” and among other things responded to MK Barkat’s words: “We could look at the low unemployment rate and boast about it. We have lower unemployment now than before the pandemic. Over the last year, we have acted properly and kept the economy open. But I prefer to ask ourselves difficult questions: Is an unemployment rate of 3.5% good enough? Have we made the most of our human potential and our opportunity as a state to enable the public to make a living? Have we done all we can to allow people to realize their potential, to use their abilities, to actualize themselves as individuals and citizens in the labor market? The answer is no. We are far from that goal, and that is the challenge.”

“Barkat spoke about two million people in hi-tech. Well, that’s important, it’s significant, it allows the engine to be more powerful, but the question is whether we only want to look at the engine. The question is what hi-tech means for the entire population.”

The Minister of Economy also related to the recent political developments: “I very much hope for governmental stability, and I know that there are excellent people in the public sector who want to execute plans but cannot do so because of a lack of ability to actualize budgets. I very much hope that in any political scenario, stability will be possible, so that the state can function, in order to maintain the momentum of action.”

“The government’s role is to understand what trade is, how you organize for it, for industry. Hi-tech is drip-feeding capabilities and skills into industry and into all areas of life. But industry itself is not the only thing. The war in Ukraine has taught us about independence in this respect. Who are the workers in local industry? What are we doing to promote advanced manufacturing? If we don’t link up productivity with automation and advanced processes, then we won’t get people into this. In these aspects, we can identify the trends.”

Minister Barbivai also spoke about the issue of exemptions from military service: “The issue of the exemption legislation, [setting] the age of 21 as the age of exemption for drafting ultra-Orthodox men, is critical. The law needs to be actualized as quickly as possible. We have inequality in the military. Will we continue to have inequality in the labor market as well? Let’s minimize it, and make decisions via legislation, such as on the exemption age or employing foreign workers. We need to create the entire picture, and that definitely requires collaboration. That’s why a conference like this, which talks about the connections between different sectors, is essential, because when we can look at long-term plans and create plans that identify needs, including the needs of workers: Who are the workers? What is a platform economy? What is remote working? These needs, I look at this through the eyes of the market, I see the needs of the state and the need to maximize human capital and the characteristics of workers.”

“We have had two difficult years of the pandemic, which changed people’s ideas about the labor market: Do we all look at it in the same way? If those of us who help shape the labor market don’t take this into account, we can’t see the whole picture. The third sector, nonprofits, and professional organizations in the field of employment. This cooperation is hugely important.”

“I was in the United Arab Emirates and I saw the buildings. I signed a very large trade agreement, and I also looked at aspects of the labor market. What do we want? A single society with all the possibilities and the knowledge? The gap between the rest of the population and the ultra-Orthodox is growing, the way in which they integrate into the labor market.”

“Being able to identify these gaps requires that we develop long-term plans for digital literacy, and most directly, it creates trust among a population that does not participate in areas it should participate in. We need to increase productivity, and ensure that it goes back to target populations who need it.”

“We need to ensure that the remarkable advantages of the start-up nation move us forward without leaving people behind. Do we want to be a divided society, with a section that has control of national resources and just takes care of itself? A society that is going backwards in terms of education and opportunity? Where is the greatest inequality?”

Director-General of the Israeli Employment Service Rami Garor: “The only constant in the labor market is the fact that it changes regularly. We are being forced to undergo a sweeping paradigmatic change—to move from the old approach of professions and training to thinking about skills, and reinforcing them and adapting them to the labor market. Beyond that, we must realize that this is a challenge for all sectors, for all levels of education, for those in work and certainly for those not working. Throughout the world, countries are shifting to a ‘lifelong learning’ employment model, and Israel is not there yet. The keys are strengthening the skills required for the new employment market; and more importantly, engendering habits of lifelong learning, between jobs but also while working. In 2021, we helped hundreds of thousands of people looking for work in this respect, and we are collaborating with ESCO, the European Union employment body, to translate occupations into a range of skills, in order to give every person the precise help they need.”

“Carrying out broad reform requires a national effort that involves all the relevant government bodies together with the business sector, by means of a national five-year plan. We must remember that current strength is not guaranteed to last, and the unemployment rate can rise dramatically. The changes will happen by themselves in any case, but if we are smart enough to plan for them and to guide them, then instead of the Israeli economy taking a blow, we can have impressive growth. It’s up to us, and the sooner we act, the better.”

Dalit Stauber, director general of the Ministry of Education: “The Ministry is currently busy with multiple plans. We are certainly familiar with the technological changes, the developments in employment, the forms of employment, the different character of the new generation, and global processes that affect economic success. We are well aware of the skills required: More complex cognitive tasks, critical thinking, and creativity. All the social skills of ‘cruising,’ decision-making, without which you can’t succeed at teamwork and at work in advanced industries … We are focusing on attaining the right balance between knowledge, skills, approaches, and values, so that the end result is developing capabilities to face complex challenges and changing realities. The education system has to adapt itself very rapidly so that we don’t end up without the appropriate skills.”

“I had the privilege of being Director General to an Education Minister who has a strong educational philosophy and managerial courage, and who leads huge changes. Generally, when a minister implements a reform it usually takes up their entire term of office. In this case, the minister was able to address the entire continuum: From early childhood, transferring the daycare centers to the Ministry of Education, which will also have an impact, to establishing a university in the Galilee. She has something to say, and the courage to get things done.”

“We attach great importance to the ‘hi-tech matriculation’ in order to meet targets and close the necessary gaps, so as to increase productivity and employment. Education about climate change has already been introduced, from kindergarten through the end of 12th grade. At the end of the day, we want our graduates to still have a world to work in.”

Stauber was speaking at a session on “The Roles of the Education System from the Perspective of the Labor Market” at the Israel Democracy Institute’s Eli Hurvitz Conference on Economy and Society, led by the Executive Director of the Trump Family Foundation Eli Hurvitz. “It doesn’t matter how much the state already invests in education; we will add more. The education budget is the largest of all government ministries.”

“We are in a transition period, between an economic summer and winter. Our children are growing up in an unstable world—global, competitive, digital, computational. They will compete for work not only with the other kids in their class, but with children in Sweden and Singapore … It comes down to the Ministry of Education, not only to broaden the circle of children who are prepared for life in this world, but to provide opportunity to students regardless of where they come from.”

“On the very day when the education system is closed due to strikes, we are fighting for the children. Sometimes [this fight] comes at their expense.”

Prof. Karnit Flug

Prof. Karnit Flug, Vice President of research at the Israel Democracy Institute and former governor of the Bank of Israel: “The differences we see in the labor market are a reflection of the differences in education. According to the data, the income is there but not the working hours. Women work 17% fewer hours. I wouldn’t attach too much significance to the wage gap; what stands out are the differences in income according to education level. The ranking there is clear.”

“For Muslim Arabs with the same level of education, parental income, and geographical location, there is a significant gap of 10% in income percentiles, and there is also a significant gap for Haredim. This might be due to discrimination, the quality of education, or other variables. Even for those with the same level of education, there are large differences in income between population groups. There is also great variation in the level of education between population groups, as well between men and women, it’s a well-known picture, minority groups that are clustered around lower levels of education.”

“There is a ‘fine’ paid for belonging to a minority group, or for being a woman.”

Dr. Yuval Mor of the Research Division at the Bank of Israel: “The education system needs to be based on teachers who have strong knowledge in the subjects they teach. The current situation is that there is a large proportion of teachers (in the tens of percent) who have not been trained in the subject they teach. This needs fixing, so as to prevent harm to more and more year groups.”

Eli Morgenstern, Education Coordinator at the Ministry of Finance Budget Department: “Contrary to what has been said about the lack of teachers, according to the data we have there is no shortage of teachers. There may be a sense that there is a lack, and there are people who are leaving the system, and indeed there is a general trend of leaving work throughout the market. But over the last decade, the number of teachers entering the system has outstripped the number of students. The problem is matching skills to the places that need them. We need to make it possible for teachers to improve their teaching capabilities, so as to match the needs to the labor market, to make the necessary adaptations.”

“The Ministry of Education is encouraging the development of more sophisticated testing, to assess whether the students undergo [significant educational] processes. We can take the matriculation tests as an example: They attract a great deal of criticism, but there is no other way to know whether or not the school has attained its goals.”

MK Moshe Gafni (United Torah Judaism) closed the session on “The Roles of the Education System from the Perspective of the Labor Market” at the Israel Democracy Institute’s Eli Hurvitz Conference on Economy and Society, and spoke about recent political events and the strike in the education system.

Gafni began by saying that Haredim will not send their children to an education system that does not fit their beliefs, even if it means giving up on state funding. “If there was no pedagogical independence, we would give up the funding and not send our children to education that is not in accordance with our beliefs. We will educate our children as we see fit.”

“Let there be no mistake about values. State (public) Haredi education is an oxymoron, because Haredi education means pedagogical independence, whereas the education system means taking instructions from the Ministry of Education, which permits not studying Talmud and Torah.”

On the same issue, he said: “I propose that choice begins with the secular public, allowing them to choose several things—whether there should be a matriculation exam on Bible studies, that they can learn Talmud if they want, like 20 years ago. Don’t impose your views on parents in state education. There is no reality of state Haredi education, and there won’t be. If it starts, it will stop. We’ll do everything to stop it.”

On the rising cost of living, Gafni stated: “The cost of living is an unacceptable state of affairs, with an accumulation of things that we didn’t have in the past. Housing prices are sky high, at a level that exists nowhere else in the world, municipal taxes are going up, gas, the price of goods, I can’t even do the sums. When I was chair of the Knesset Finance Committee, if we’d had even a quarter of this in the Israeli economy—, I would have convened the Finance Committee so that the people at the Finance Ministry would take control of the economic system. Today, it is the young officials in the Ministry’s Budget Department who make the decisions. The Finance Committee has become an operational arm of the Ministry of Finance.”

“The truth is that we have a finance minister who has failed completely. I can’t remember a finance minister like this, and I’ve seen a lot of finance ministers in 33 years in the Knesset. Today, it’s like an economic dictatorship. I was a friend of Yvette Lieberman. I’ve visited the Hasidic rabbis with him. We went into politics together. He has changed his mind recently. He’s no longer right-wing, he was never left-wing. We can’t bomb the Aswan Dam, we can’t kill Haniyeh, so he’s only got one thing left—to speak out against the Haredim. I can understand him.”

“But I didn’t come here to discuss the Haredi education system. I’m in favor of improving what is currently on the agenda. I’m in favor of improving the general education system … Do we give enough funding to education? Do talented teachers at a high level have a good enough reason to teach, or would they be better off elsewhere? And I can tell you that people don’t want to enter teaching. What Yaffa Ben David is saying is correct. We’re facing an educational catastrophe. The question of what we do or don’t teach will soon become irrelevant.”

On the recent political developments, MK Gafni commented: “Unlike some others, I’m working right now to try to avoid another election. The polls don’t indicate [United Torah Judaism] gaining or losing any seats, if anything then perhaps adding one seat. This means that I can approach people and they don’t suspect that I am afraid of elections. Elections cost a great deal of money, and mean halting the economic system. After four elections, which is a terrible thing, there is a chance that after all the slandering, we will end up back where we are now.”

In closing, Gafni added: “Therefore, my position is that we need to reach an agreement. I say this to my friends in the opposition and also to my friends in the coalition, we need to sit together and reach agreements.”


The Eli Hurvitz Conference on Economy and Society—formerly the Caesarea Economic Policy Planning Forum—is widely recognized as Israel's most influential economic conference. For 29 years, the Conference has served as a crossroads where public discourse and professional knowledge in economics and society meet, with the aim of improving the decision-making processes in the administration and improving the quality of Israel's social and economic policy for the benefit of the entire public. This year, the conference will address strengthening innovation in Israel both as a source for reducing disparities and as a catalyst for climate entrepreneurship; the challenges of the Israeli labor market; the goals of the education system and the effectiveness in which it implements them, as well as in the future of science in Israel.

A series of team-led research and policy recommendations on issues closely related to the conference sessions will be presented during the conference on June 21-22, at the Orient Hotel in Jerusalem and online on IDI's website.