Eli Hurvitz Conference on Society and Economy 2024: Israel at War

Photo by: Oded Karni

This Israel Democracy Institute's annual Eli Hurvitz Conference on Society in Economy 2024 convened top leaders in the midst of one of the most severe and significant wars in the country's history, ongoing since the attack of October 7, 2023. Accordingly, this year's conference focused on responsible, long-term economic and social planning to meet the needs of the country during and after the war, including through sound fiscal policy, equality in the burden of military service, reforms in the civil service sector and the labor market, revival of the countries most impacted by the war, and international cooperation on the most pressing global issues in the years to come.

The conference kicked off with remarks the President of the State of Israel Mr. Isaac Herzog, who set the stage for the whole conference. “I want to discuss the effects [of the war] on the economy, because it’s about time we dealt with that too," he proclaimed. "Rehabilitating the communities in the North and in the South, the absence of reserves soldiers from the workforce, the skyrocketing and necessary security expenses in the present and in the future, the threats looming over investments in Israel and the changes in international commerce as a result of the war... these present significant challenges before the  country, the government, and of course before the economy, the business sector, policymakers and every household in Israel.”

The morning sessions focused on new budgetary frameworks and priorities in years to come, as well as opportunities for the capital market to finance rehabilitation and growth. As IDI Vice President for Research and William Davidson Senior Fellow for Economic Policy noted, “We are at a point in which the potential damage from a lack of an economic policy response [to the war] is enormous. The absence of decision-making, or the making of inappropriate decisions while putting off problems to the future, raises doubts as to the economy's ability to recover. To meet the challenges, what is required is a profound change in the priorities in the budget.” The overwhelming consensus of these sessions was that more must be done to plan for the country's economic future and to capitalize on the opportunities before us.

IDI President Yohanan Plesner then held a discussion with U.S. Ambassador to Israel Mr. Jack Lew, looking at the most pressing challenges and opportunities in the longstanding alliance and friendship of the United States and Israel. Ambassador Lew noted that “US support for Israel is fundamentally rooted in a relationship of 75 years that remains ironclad. Beyond this, there are other reasons for us to feel strongly it is important for Israel to defeat Hamas. One of the reasons is to prove the way that Iran is attempting to project power in the region - with militant groups like Hamas, Hezbollah, the Houthis - is not acceptable in the region or anywhere in the world. The defeat of Hamas is very important. How you get there, how you declare you’ve achieved it, there can be different points of view on this, but there’s no doubt that it must be achieved.”

The conference moved on to the critical issue of the burden of military service, and the matter of ultra-Orthodox (Haredi) service in the IDF. In the words of Shlomi Heizler, Director General, Ministry of Finance, “The events of October left no room for doubt that the state of Israel needs a strong military. This means we need more combat soldiers to protect the country and its citizens. It goes without saying that if there is not an increase in the number of IDF soldiers, the economic burden on the State of Israel, and on reserve soldiers, in particular, will be huge. In our complex reality, there is no doubt that it is an economic necessity for the entire population--all sectors of society-- to bear this burden.”

On the matter of civil service reform, leaders called for both a new structure that meets the needs of the moment and a clear partnership between the political and professional class of the government. Former Finance Minister Avigdor Liberman, Chair of the Yisrael Beiteinu Party spoke of his time as a minister and his relationship with the ministry officials " I made clear to the public servants that I work with you, I don’t work for you. But it’s very important that the professional class is always able to present an alternative, that they can debate with the ministers and aren’t afraid to present an opinion, even if it’s not accepted by the Ministers."

Day two of the conference opened with remarks by the State Comptroller Mr. Matanyahu Engleman, who called for long-term strategic planning that capitalize on Israel's strengths and global opportunities: "To maintain Israel's technological and scientific edge in the field of artificial intelligence, which has been designated as a national priority, a long-term national strategy is required. This should include a funded operational master plan that includes goals, milestones, timelines, and performance metrics. The government's lack of action and long-term vision are causing damage to Israel's economy, which will only worsen over time. ‘The day after’ [the war] is already here."

As the conference zoomed in on the Israeli labor market, Avi Ben Assayag—CEO of Osem-Nestle Group and Chair of the Economy Committee of the Manufacturers Association of Israel—put a fine point on the impact of the war on workers in the South: "The Israeli food industry has withstood many crises, the last one being Covid19, which it withstood well. The same cannot be said for the Swords of Iron War… At factories in the Gaza Envelope, workers from the Arab society - which make up 20 percent of our workforce - were afraid to arrive, foreign workers disappeared, and dozens of workers were injured along with their families. For the first time in history, food factories were closed and did not reopen, creating a severe shortage.” He further noted, "We must allow the import of essential personnel for the industry without bureaucratic hurdles. This is not the case today. Professional workers must be trained with full funding from the government, including stipends during their studies. We must plan the allocation of resources, and plan ahead - these things will not happen by themselves."

Arnon Bar David, Chair of the Histadrut (General Federation of Labour in Israel) addressed the public's desire to use the labor market to pressure the government during a time of war: “Recently, I’ve been hearing people who want me to declare a general strike. This concerns me. Suppose I declare a general strike tomorrow morning, for two, three days, or if I shut down the ports for a week, the airports, and the hostages aren’t returned and elections aren’t announced – nothing happens. I won’t push the ‘Histadrut’ to the brink over something abstract. I am no one’s strike broker and I have been trying to navigate the Histadrut through rough seas for over a year.”

MK Yair Lapid, Leader of the Opposition and former Prime Minister set the stage for the afternoon sessions on regional cooperation: "The State of Israel today has six major strategic challenges: Gaza, the hostages, the North, the ICC and ICJ, Iran and relations with the world," he said. "If the State of Israel were to announce tomorrow that it is ready for a normalization agreement with Saudi Arabia, its situation would improve across all six of these strategic challenges. No one will issue an arrest warrant for an Israeli prime minister who is in historic negotiations for regional peace. In Gaza, this builds the international coalition that will enter there instead of Hamas ‘the day after.’ In terms of the hostages, the Saudis can help put pressure and pull levers that we don't have today with Qatar and Turkey, and bring about a deal that will bring them home. The northern front will calm down If Gaza calms down; the residents of the north will be able to return home."

In discussing the joint climate-project between IDI, Startup Nation Central, and EcoPeace Israel, Gidon Bromberg, Director of EcoPeace Israel made clear that “regional cooperation to address climate change is not a gift, it's not a favor, it's an issue of absolute necessity for the countries in the region.” Yariv Becher, VP of Strategic Alliances at Startup Nation Central added, “I remember we started this project about a year ago, we had a totally different reality. Understanding that we were talking about the importance of collaboration and a better future. Realities have now changed, but the premise of this project has only strengthened and become much more important. The recommendations will really show that.” Hearing from a global partner directly, Andrea Pontiroli, Deputy Head of Mission, Delegation of the European Union to Israel said: “We in the EU aim to reach climate neutrality by 2050, meaning no greenhouse gas by 2050. We understand that this cannot be achieved by Europe, which is responsible for only 9% of emissions, working alone… that is why we require strong regional partners.”

The annual Eli Hurvitz Conference on Economy and Society—formerly the Caesarea Economic Policy Planning Forum—is widely recognized as Israel's most influential economic conference. Inaugurated in 1993 as Israel’s first major policy forum, the conference was originally conceived by Finance Minister Avraham "Beiga" Shochat and IDI founder Dr. Arye Carmon as a forum for policymakers, business leaders and academic experts to debate national policy priorities ahead of the passage of Israel’s annual budget. Each year, the Conference examines Israel's macro-economic policy and focuses on other key issues, which have included environmental policy, inequality, the war on terror, globalization, education, transparency, and local government.