Israel’s economy: Who knows what’s happening if the government doesn’t?
June 2020 was another stunning month for Israeli startups, raising US$700m despite covid-19. So what could be wrong with Israel’s economy?
Last week, one of the main TV news stations showed an item, detailing how the middle class in the Holy Land is finally cracking. Many of the frills like extra curricula activities are being eliminated. Housing and flats are being put up for sale.
The response from senior Likud minister, Tzachi Hangbi, a confidant of the Prime Minister?
This nonsense that people have nothing to eat is bullshit. Bullshit. There are a million people who, most of them, until now, have received unemployment payments… There are businesses that were hurt and they’re in serious distress. [But] saying ‘there’s nothing to eat’ is populism.
While the PM has acknowledged that this comment is unfortunate, it does force us to recall his own remarks in mid June that nearly 90% of the Israeli economy is up and running again!
In the words of a senior editor of “Globes“, an independent financial daily:
The intentions of Israel Aerospace Industries, Amdocs, and The Phoenix Holdings to lay off hundreds of employees each has torn away the mask: the economic crisis is not temporary, leave without pay is not a bridging measure. The State of Israel is not rumbling towards the most severe economic crisis in its history; it is already at the height of it. And no-one is taking responsibility. All that surrounds us is chaos and emptiness……The only significant economic decision since the crisis started – to put the country on furlough – was made by the director general of the National Insurance Institute, and not by the policy makers, and even that turned out to be a disaster.
To go to the punchline of that article, it is time for the decision makers to wake up, right now!
Around 20% of the workforce remains unemployed. For example, El Al has furloughed about 7,000 of its workers. This has impacted on thousands of others in ancillary industries. I wonder how these people would calculate “90%”!
The Prime Minister, Mr Binyamin Netanyahu, has promised his country a “6 month program of economic renewal”. This is a man, who for much of the past 25 years has thrived and succeeded on slogans. After all, his original fortune was made as a marketing executive where catchy slogans are a core part of your ammunition. But as for the details….?
As Israel seemingly emerged ‘quite well’ from the first corona wave, Netanyahu concentrated his efforts on his beloved ‘annexation plan’. Whatever may eventually emerge from that, it will not be what he initially declared with pomp and ceremony. Further, it has detracted his attention to something even more core – ensuring his voters can put bread and butter on the table every day.
Israel does not need slogans nor action items hastily thrown together over a couple of weeks.
Israel demands carefully thought out long term radical policies that meet the cruel demands of a totally new financial and economic scenario. As I wrote frequently at the beginning of the corona crisis, most of the current crop of decision makers – politicians and senior civil servants – are totally out of their depth.
This is not a task suited for sales reps.