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.

 

After barely two years, Israelis will be going back to the polling booths on March 17th. Historically, general elections in the Holy Land are determined by which party is perceived as the most capable in defense and foreign affairs.

On this level, incumbent Prime Minister, Bibi Netanyahu, has consistently performed well in the polls over the years. Certainly, there is a feeling that last summer’s military operation against Hamas in Gaza was planned and executed with competence.

However, if you listen to the chatter of the candidates, government and opposition, it is all about the economy; what is and what is not in people’s pockets. It is a matter of ‘perception and feeling about spending power’. However, Bibi looks to be playing on a very sticky wicket.

Economic Growth: While the Israeli economy may be set for a reasonable 2015 and yes “2014 was an excellent year for Israeli high tech“, the spark seems to have disappeared. For the first time since Israel joined the OECD in 2007, growth per person (0.7%) was lower than the whole OCED average (1.3%).

It is interesting that this week also saw the release of stats that show how for the first time in a decade, people are buying less food. The 1.63% drop was specifically felt amongst the large supermarket chains.

Price Rises:  January 1st has revealed significant price reductions in the cost of petrol and in the water rates. Great. However, as the government has no ability to tackle the electricity monopoly, the prices here just do not budge. Further, it is accepted that municipal taxes are set to be hiked after the election,a nd who knows what else is in the pipeline. While most workers in the public sector will enjoy a 1% pay increase this month, the top boys will receive 2.5%. Fair?

New Economic Wealth Belongs To…?  There is a hidden rule of thumb that those people who ‘make it’ in high-tech deserve to keep their riches. Their talent and chutzpah got them there. Somehow, when it comes to the offshore gas rigs, the public thinks otherwise. It is true that the government coffers will benefit from this new wealth, but has the Treasury, under Bibi’s directives, surrendered too much tax money to the private sector?

What is worse, now that a public debate has erupted on the matter, Bibi has demanded a rethink. OK, but this has landed him trouble with powerful American investors. They have called in their friends in Washington, who wrapped Israel over the knuckles. What a mess!

Social Issues: As things stand at the moment, Bibi’s Likud party will field only two women on its election list in realistic positions. This has caused a rumpus in the press and amongst pressure groups. As if that is not bad enough, a leading social commentator, Tami Arad, has posted a strong article condemning the government’s position towards pensioners.

Housing: There has been talk for years on how to prevent the perennial surge in the price of housing. Those who are specifically feeling the heat of the bubble market are young couples, call them first-time buyers if you wish. Despite expectations and hopes, the outgoing government has yet to deliver a solution.

Netanyahu’s explanation for the woes are simple and precise. In a special television interview last night, he handed out his blame list for the ills. Although he has been in power for much of the past decade, he included several opponents, but not himself.

We also saw on the news how the Israeli Prime Minister delivered a speech to the party faithful. When he mentioned defense and geopolitical issues, his comments drew strong applause and cheers. When he touched on the economy, the activists in the hall were ominously and erringly quiet. What kind of dawn will the 18th March bring to Israel?

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