Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

Two new set of stats were released last week about the Israeli economy

  1. A report from the OECD noted that while there are a lot of “good looking” elements to the economy and many feel satisfied,  poverty is on the up.
  2. Prices are barely rising.

Well, surely this is all very tolerable? After all, no economy gets its finances right all the time. Look again!

It is true that prices have been kept down recently. However, due to increase of world food prices and raw materials, sooner rather than later, these changes are going to end up being felt in the bank accounts of the average Israeli. Now factor in the global truth that the poor spend more on food (and health services) than the richer sectors of society, and you will soon find that the OECD report will have even more painful meaning.

One comparative fact just made my blood boil. Over the past decade, the consumer price index in Israel has risen by 19%. Impressive. However, the index for fruit and vegetables – basic staples of a person’s diet – has leapt up 44%, more than double all other standard items together.

As the analysts observed, Israel has the highest relative rate of poverty in the OECD. And that is why I keep writing and warning about the absurdities and tragedy of Israel’s dual economy.

For years, food prices in Israel have been kept high by vested interests, often close to the corridors of power. For example, there have been suggestions and even attempts to open the market up to imports. For example, why Israelis are only allowed to eat strawberries 3 months a year is beyond me. A combination of religious groups and the agricultural lobby have managed to put this off for yet another year.

And then there is the farce of the creation of a national vegetable distribution centre. A government unit was set up back in 2012 to establish what is supposed to save consumers an estimated 2.5 billion shekels annually – say US$0.6 billion. After numerous surveys and a dozen different reports, nothing – I repeat, nothing – has been decided nor achieved.

And in the meantime, I guess the OECD can start to prepare its next disappointing report on poverty in Israel, because the people at the top, even if they do care, are incapable of acting.

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