On November 6, 2013, Prime Minister Benjamin Netanyahu presented his economic vision to the participants in the Eli Hurvitz Conference on Economy and Society via video. As can be seen below, his five-point plan emphasized developing technology, building infrastructure, cultivating new markets, exercising responsibility, and encouraging competition.
Prime Minister Netaynuahu addresses the 2013 Eli Hurvitz Conference (with English Audio Translation). To view this address in the original Hebrew, visit the VOD Center.
Prime Minister Benjamin Netanyahu opened his address by congratulating Conference Director Yarom Ariav on bringing together thinkers from the public sector, academia, and the business world for the benefit of the Israeli economy.
The Prime Minister asserted that Israel faces more challenges than any country in the world, especially in the realm of security. He then stated that the only way that Israel can fund its security expenditures, which are increasingly connected with technological expenditures, is by economic growth, not by increased taxation or by receiving increased funding from others. According to Netanyahu, a growing economy is vital for the collective security of the State of Israel. He stressed that a growth rate of 4–5% at a higher level of per capital income is necessary in order to keep Israeli tax rates low.
Prime Minister Netanyahu outlined five ways in which Israel should grow its economy in the coming years:
- Technology: Israel must leverage technological advantages in the market. The Internet economy is the fastest growing economy. This economy, however, is endangered by the cyber-threat. It is vital to protect transactions and information as much as possible by developing cyber-security, and Israel has unique capabilities in this field. Israel must become a world cyber leader, and steps are being taken in that direction. Be'er Sheva University is becoming a center for cyber development, and this is having significant ramifications for the development of the Negev. A network of fiber optics is also being laid from Kiryat Shmona in the North to Eilat in the South in order to increase Israel's technological abilities.
- Infrastructure: Physical infrastructure is essential for moving people and moving goods. Netanyahu's previous government invested 27 billion shekel to create a single transportation system that would unify Israel's roads and railroads. Such a system would connect the country from North to South and would leverage the high cost of land and housing in the Tel Aviv area in order to develop the periphery. It is also necessary to focus on strategic infrastructure and to create a land route as an alternative to the Suez Canal that will enable the secure transfer of goods from Asia to Europe. Although a railroad from Eilat to Ashdod has been accused of being uneconomical, the project should be explored because it will have geopolitical benefits and will facilitate the development of the Negev, the South, and Eilat.
- New markets: Prime Minister Netanyahu singled out China as a market that Israel must develop, and said that when he visited China, government to government work began in order to enable Israeli companies to enter the Chinese market. He advocated the use of political channels in order to enable Israeli experts to bring water, health, and milk to millions of people in China. Additional markets that should be explored include other countries in Asia and Latin America, where there is interesting and important growth. He stressed that all those countries are interested in Israel's technology and Israel is interested in marketing its technology to them.
- Responsibility: Prime Minister Netanyahu called on the government to exercise fiscal restraint and curtail government expenditures as much as possible. He stressed that like in any family, if you spend more than you earn, you will be in financial trouble. For this reason, the government must lower its expenditures and lower the national debt. Fiscal responsibility, he emphasized, is crucial. The government must not breach the fiscal framework and must resist the temptation to raise its participation in national production. In addition, the Prime Minister asserted taxes must not be raised. If Israel keeps its expenditures reasonable, he argued, it will also be able to maintain a reasonable level of taxation. Netanyahu stressed that he has never acceded to populist calls to impose higher taxes on high earners and does not see that as an option. He similarly warned that in an era of global competition, if corporate taxes are raised, companies will leave Israel. Taxation must be moderate so as to encourage growth.
- Competition: Prime Minister Netanyahu emphasized that competition is vital for innovation and growth. Centralization, according to Netanyahu, is what prevents competition, whether it is governmental monopolies, monopolies like the Histadrut workers union, or monopolies in the private sector. He expressed concern that cartels and monopolies are obstructing competition in the Israeli economy and undertook to take steps to combat them. Netanyahu stressed that his government is promoting an "economic concentration bill" as a means of increasing competition and breaking the monopoly of cartels and wealthy individuals. He also asserted that he supports privatization as a means of increasing competition, and reminded the audience that in his previous term as Prime Minister, prior to the social protest of 2011 and the establishment of the Trajtenberg committee on economic reform, he had appointed a committee to examine economic competitiveness.
In closing, the Prime Minister stressed that these five measures will help redress inequalities, and will bring the periphery in line with the center of the country. He cited education for excellence and the promotion of a free, dynamic market as additional ways of reducing inequality. A society that helps the elderly, tends to the needs of Holocaust survivors, and takes care of at-risk children, he said, will reap the fruit of growth. He closed by affirming his commitment to leading the State of Israel to growth along the lines of this plan, which he sees as both correct and doable.