Israel has a new Minister of Finance in Yair Lapid. His father was a political journalist, who ended up in politics and entered government. Lapid himself was also a senior journalist. He created a pressure group, converted into a political party and is now the second largest group in the Knesset (Israel Parliament). Does this mean he will be able to look after the country’s accounts?

Lapid has no government experience. In an interview a decade ago, he admitted his ignorance on economic affairs. He is wealthy, although he advocates a platform for a more equal distribution of the burdens of society. Contradictions abound.

The job of the new boy is not helped by Israel’s economic structural problems. The previous government worked up a black hole of around 15 million shekels – say US$4 billion. Yet, as the calendar ticks over towards the end of March, no budget has been prepared for 2013.

In addition:

• The government urgently needs to find a replacement for the internationally respected Governor of the Bank of Israel, Professor Stanley Fischer, who is leaving the position in the summer. A poor choice here will expose the shekel to market fluctuations.
• There is still genuine concern that the price of housing in Israel is creating an economic bubble. It is generally agreed that young couples are being priced out of the market and that many banks have too great an exposure to potential bad debts.
• Too many vital sectors of the economy are protected by vested interests. For example, the port of Ashdod is considered one of the most inefficient and expensive in the world. And yet it is an open secret that vast proportions of the workforce are related to each other. in a separate sphere, the Ministry of Agriculture ensures that tariffs make imports of fruits and vegetables near impossible, keeping prices high to the consumer.

These are just some of the challenges facing Lapid. As often is tha case, the list is near endless. Depending on your political allegiances, many argue that the ultra orthodox and  / or those living in the West Bank are receive resources beyond their numbers and contribution to society. Small businesses have been squeezed int he past few years and need help.

Lapid will be forced to look at all these issues, sooner rather than later. Yes, he has an agenda. And here’s the catch. If he tries to alter too much and too quickly, he is likely to fail. Economies are complex. In the era of globalisation, there are many unforseen external anomalies, which computer models cannot predict and an a background in economics cannot prevent.

Where Lapid can make a difference is to set himself gradual targets. The most effective changes are not necessarily immediate, but take place over time and with as much prior general agreement as possible. If Lapid was able to learn that from his father, then he has the opportunity to make a great impact as an untested Minister of Finance.