IDI Hurvitz Conference 2026: BOI Governor; PMO Officials; MK Liberman; Business Leaders; IDI Experts Kick Off IDI's Eli Hurvitz Conference
Policymakers, government officials from across the political spectrum, tech executives, and academics joined IDI experts to take on challenges in Israel's wartime economy and advance research-driven policy debate in an election year.
The first day of the Israel Democracy Institute's annual Eli Hurvitz Conference on Economy and Society convened this year in the shadow of nearly three years of war and at the cusp of Israel's 2026 elections. Today's sessions featured lively debates and policy proposals on how Israel's leaders can tackle the difficult but critical state budget decisions that must be made, the steps that must be taken to invest in growth engines, and the challenges of inclusive growth that leaves no sector behind.
Selected Quotes:
IDI President Yohanan Plesner set the stakes for the day, noting that this election season, “Israel is at a turning point. The bitter dispute over democracy—and over the constitutional and legal arrangements meant to safeguard it—is tearing us apart from within. Instead of a public discourse that acknowledges the pain and fears of people with different views, we are seeing initiatives aimed at forcefully imposing changes that would alter Israel’s character as a Jewish and democratic state…
The purpose of our conference is to create a forum that enables us to think together, on the basis of information, research, and data; to formulate practical solutions for a shared future; and to hold a candid, open, and courageous discussion.”
Prof. Karnit Flug, the conference chair and IDI's William Davidson Senior Fellow for Economic Policy emphasized the economic impact of the war: "After over 2.5 years of war… the defense budget currently stands at close to 8 percent of GDP, compared with just over 4 percent of GDP in the period before the war. And the share of the defense budget within the total budget has risen to 25%, from 16 percent before the war, representing a dramatic change in the composition."
Bank of Israel Governor Prof. Amir Yaron discussed the interplay between military success and the value of the shekel: "Since the 'Beeper Operation,' and alongside the improvement in the geopolitical situation, there has been a sharp appreciation of the shekel. The appreciation was influenced by three vectors: the decline in Israel’s risk premium, gains in the U.S. stock market, and the third factor—the dollar has weakened globally, including against the euro. These factors are financial, but they are also related to Israel’s underlying sources of resilience and strength. We of course understand the impact on industry and exporters, and we certainly do not take it lightly."
In a conversation with IDI President Yohanan Plesner, Yisrael Beitenu Chair MK Avigdor Liberman remarked on his vision for what might come after the elections: "A coalition must be formed with responsible people who do not have sectoral interests. And by the way, that also applies to Arab parties, whose interests are indeed sectoral. What is needed here is a Zionist coalition with a broad statesmanlike outlook—one capable of rising above all other interests and acting according to one interest, and one interest only: the interest of the state; the national interest.”
Focusing on events that unfolded just this week, MK Avigdor Liberman said: “As of yesterday, we have entered a completely new security reality…a change in the rules of the game.” Referring to an exchange of threats between Israel and Iran around fighting in Lebanon, Liberman noted “there was an immediate intervention by the President of the United States. Netanyahu once said that the most important quality for an Israeli prime minister is the ability to say 'no' to the President of the United States—and he was right. Right now, we see that he does not meet those same criteria.”
Looking at US-Israel relations through a broader lens of military aid, Brig. Gen (Res.) Dr. Gil Pinchas, former Financial Advisor to the IDF Chief of Staff and the Head of Ministry of Defense Budget Department said: "It’s nice that we want to receive US aid, but whether you look at the Democratic side or the Republican side, it is not certain they will want to continue to give it. Therefore, we need to move to a different model, to a different agreement—one that speaks more about cooperation and joint matching projects… We will probably have no choice but to gradually reduce the $3.8 billion [in military aid]. Hopefully not to zero, but it will have to decline. At the same time, we will need to increase the share devoted to joint projects… This could once again create a win-win situation, benefiting both security and the economy."
Bringing it back to domestic economic policy, Prof. Avi Simhon, Chair of the National Economic Council in the Prime Minister's Office said the following regarding tax policy: "There are two problems here. The first is that the government is imposing taxes that are too high. The second is that the Bank of Israel is, effectively, imposing another tax by raising interest rates, enabling the banks to take money from the public and reshaping the distribution of income in a way that is problematic."
Dr. Tehilla Shwartz Altshuler, Head of the IDI's Democracy in the Digital Age program, made the case for AI governance, highlighting that the age of AI marks a dramatic "migration and transformation of cognitive capabilities from people to machines. What will the world of knowledge production look like? What will learning look like? Are we heading toward an era in which these capabilities atrophy? The regulation that is needed now is cyber regulation. There is a ticking time bomb here. The State of Israel is not protected, and this will only become more severe because of AI—that is where regulatory measures need to be intensified.”
In one view of how Israel can make the best use of AI, Erez Askal, Head of the National AI Directorate in Prime Minister’s Office laid it out as a metaphor: “AI is the new oil. Israel, which until now has been a small country without many natural resources—because this oil is man-made, it is not too big for the State of Israel. And we are capable of taking real leadership in it…What is Israel’s competitive advantage? The best solutions we have brought came because we had a very concrete operational problem, and through it we delivered breakthroughs that made most countries in the world drop their jaws. Our ability to solve real-life problems — that is Israel’s great advantage.”
Renana Ashkenazi, Managing Partner of Grove Ventures also looked at where Israel's advantages lie in the realm of AI: “Israel has not lost the AI race; it just didn’t play on a field that was irrelevant to it. The world of large models is not Israel’s field, and it never was. Israel and Israeli high-tech are strong in fast-moving, creative places—places where you need to kind of ‘move fast and break things.’ And today, in the age of AI, the question is how good we will be at identifying the new bottlenecks in the world changing before our eyes, and at seizing key opportunities there.”
Adina Eckstein, COO of Lemonade presented a vision for AI leadership on the government level: “I think Israel’s competitive advantage will happen when, in every law firm, school, library, and government office, AI is at the very heart of the organization’s activity. It truly is the government’s role to make this happen, both by setting a personal example, so that government itself is managed with the assistance of AI, and by creating an environment that enables industry to do the same.”
Michal Fink, Head of Strategy, Economy and Innovation at the Ministry of Economy and Industry emphasized the importance of leaving no sector behind: “We need to enable those populations and sectors with low productivity, whether small and medium-sized businesses, traditional industry, or the commerce and services sectors, to benefit from the AI revolution no less than high-tech is expected to benefit from it…The AI revolution must not skip over the traditional sectors. This is a major opportunity: our ability to integrate technologies, introduce advanced manufacturing, and bring technologies into the commerce and services sectors — and through these means, raise productivity.”
Prof. Manuel Trajtenberg, Professor (Emeritus) at Tel Aviv University likewise discussed the opportunities that Israel's diverse population groups present, from a different perspective: “One of the costs of the war is that the academic training of tens of thousands of young people has been harmed, and there is almost no way back from that…There is a great deal of untapped talent within the State of Israel: in the Haredi sector, in Arab society, and in the socioeconomic periphery. And it is possible to access this untapped potential, for example, in the IDF’s initiatives to recruit people from these populations into elite units and intelligence.”
The conference continues tomorrow with remarks by former Prime Ministers Naftali Bennett and Yair Lapid, State Comptroller Matanyahu Englman, political and business leaders from Israel's northern communities, the president of the Israeli Chambers of Commerce, and dozens of other speakers. The conference will be live streamed in Hebrew, and we will post live in English on our X account.