Keeping Israel’s election economy together
April 9th 2019. Election day in Israel. It is not so much of who will be the biggest party, but which block on the political map will win. For now, Netanyahu’s right wing grouping has a slender lead, just.
For most of Israel’s 71 years and in direct contrast to most democracies, the issues of defense and foreign policy are seen as more important than the economy and social affairs. That is probably still true today, but how people feel about the shekel in their pocket is obviously a pertinent factor in how they will cast their vote at the polling station.
Let me be clear. Israel’s economy has been one way track upwards since the beginning of the century, barely effected by the 2008 global crisis. And Netanyahu, as Prime Minister or in other positions, has played a key role in that success. Just over 8% of the working population is involved in high-tech and they are generally doing very well.
Yet there is a feeling that the clouds are gathering. And even if they are, can Netanyahu keep the picture bright enough to control his support for another three weeks?
There has been a worrying trickle of less positive economic information over the past month:
- Growing budget deficit
- Inflation slightly above expectations
- Welfare payments not doing their job
- The cost of housing looks set to rise again
And so the list goes on. Crisis time it is not, but something is not right.
The most indicative sign of this is the price of fruit and vegetables. Now Israel was set up as an agricultural economy. There are hundreds of farms – private, kibbutzim and so on.
The previous government promised that the cost of living would be a key part of their next programme. Would this mean a freer approach and the reduction of duties on the import of fresh produce? Prices stabilizing?
You must be joking! Over the same period since the early 2000s, prices have nearly doubled. Out of season fruit are just not available. The local farmers are still protected, even though they will argue that they are given a raw deal by the big chains of supermarkets. Competition is stifled. So much for the free economics, preached by Netanyahu.
Last weekend, I read the most bizarre analysis. In order to override the power of the chains, more and more farmers are setting up their own local shops. Great. However, the newspaper “The Marker” compared 14 types of products, sold in three private shops and also in four chains.
You would have expected that the farmers could offer the best deals as they do not have to bare the cost of middle men. Again, you must be joking! Of the nearly 100 prices in the table, almost without exception, the farmers were the most expensive.
And this is the economy that Netanyahu is trying to sell to the electorate as a picture of achievement.