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.

Israel is to hold its third general election within 12 months in March 2020. Does this political impasse have an significant impact on the economy?

Remember: Israel has always had a coalition government. Yet somehow, parties have found a way to come together. This time, there is a secondary elephant in the room – the investigations into corruption surrounding the Prime Minister and now his indictment on three separate accounts. Benjamin Netanyahu has made no secret that his best line of defense lies in clinging to power.

Thus, the political impasse did not start on the day of the first general election this Spring. It began in the run up to that vote, commencing in the Autumn of 2018. And it is likely to continue through to the early summer of 2020, as the vested parties will seek to outmaneuver each other in the expected coalition talks.

In other words, we are talking of an almost two year period, when the economy (and other policy issues) have received no central direction!

Does this really matter? After all, the economy is holding up.

Against all that cheer, there is a very worrying undercurrent. As one journalist calculated:

The price tag for the next election is NIS 3.8 billion and the cumulative cost for all three national ballots is an estimated NIS 10 billion – enough to raise old-age stipends for one million pensioners in need.

Meaningless assumptions? One leading national charity has stated that:

Government policy tools directed at the issue are generally limited and insufficient to diminish the problem substantially, to which has been added stagnation in government and political instability because of the two elections a short time apart in 2019, leading to the loss of an entire year in the ability to deal with prevention and reduction of poverty and rescue from it.

It is known that:

  1. The national deficit is growing, as the government has no mandate to lower spending nor to raise taxes.
  2. New opportunities to attract overseas investors are going begging, as they require government approval.
  3. I was told by one pensioner that his drugs and tablets are in short supply, and he has heard of other cases.
  4. Specific stipends, such as for soldiers without parents, have run out of money.
  5. Start ups, relying on government funding, have been laying off workers, as there has been ‘no legal process’ to grant the transfer of funds.
  6. And………….

In other words, at the micro level, the immaturity of Israel’s politicians is beginning to hurt. But who cares?

The political uncertainty only impacts on the electorate but not those who consider themselves wise enough to make the laws.

 

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