Despite the attempts of the cleverest government spin doctors, the Israeli economy is drifting. Worse, nobody seems to be doing too much about it. Last week brought new evidence to that effect.

On the positive side, external investment continues to arrive into selected sectors. Since the so-called BDS – boycott Israel campaign commenced in 2005, FDI has actually tripled. Orbimed, the world’s largest medical VC, has just raised over US$300 million to invest in the Holy Land. Resources are even making their way in to the Arab sector.

As if to prove the point, a competition was held last week featuring former soldiers in the elite 8200 unit. They have initiated start ups like Intensix – handling big data for medical institutions during emergencies – and Sensory Treat, which helps children with special needs. The winners received some healthy handouts. The fact is that on the back of these successes, the average wage in Israel continues to climb steadily.

But, and here is a ‘big but’, “two thirds of Israel’s population employed in the workforce receive below the average national wage”. As I have described before, Israel is a country of two economies.

It is five years since the ‘cottage cheese revolution’, where hundreds of thousands of people protested against the high and rising prices of basic goods, such as cottage cheese and vegetables. The government promised action. Committees were set up. Talk was everywhere. And today?

However since 2011, the cost of a 3.5 room flat in Tel Aviv has climbed from 2.4 million shekels (US$ 0.65 million) to about 3 million shekels. It is estimated that whereas previously it took 130  monthly payments to put down a deposit on a flat, that stat has gone moved onwards to 150 payments. Younger couples, the core of the new middle class, are being squeezed out of the housing market. Meanwhile, vested interests continue to block reforms in the banking and vegetables sectors, also a major negative impact on the middle classes.

Where to now? The Israeli government has yet to make a move. There again, we have been waiting for something serious economic policy to emerge for at least two years. And patience is not a commodity known to be available in quantity in the Middle East.