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.

The wife of a top Israeli politician posted yesterday that the Prime Minister, Bibi Netanyahu, “could go through an economic holocaust as long as nobody is loved more than he is,”.

A poor use of words in my view, to say the least. However, it came just 24 hours after a leading newspaper, Ha’aretz – a perennial critic of the PM – surmised that Israel’s democracy is faltering as a result of an increasingly direct-rule-of-law approach from the top.

Israel’s corona numbers this week are now worse than those during the initial winter crisis. Bibi has always been seen as the on in charge of all corona issues, if only because the previous Minister of Health was out of his depth. (And it must be remembered that in the coalition negotiations during the Spring months, Bibi insisted on keeping the Health Portfolio for his party.)

So what is really driving Netanyahu, during this time when Israel’s top public health official resigns and its citizens are being asked to consider non-emergency hospitalisations?

I argued during the first phase of Covid-19 that the country’s economic response was pathetic. It featured populist measured, proposed by people who did not how to run businesses. Was I right? The Bank of Israel has just downgraded its growth forecast for 2020 from 4.5% in May to 6%. Of the 10 billion shekels (US$2.85 billion) promised 3 months ago in a country thirsty for liquidity, only 47% has been spent. 20% of loan applications for businesses have been rejected.

Has anything been learnt since?

This week, the Bank of Israel announced monetary measures that propped up the banks, which are already making a fortune out of other people’s debts. For example, tens of thousands of people have been allowed to delay mortgage payments for 3 months. You think that the banks lost money on that one? Think again.

Unemployment had peaked at just over 27%. It slid back down. It is now on the rise again, with meagre measures in place to incentivize employers retain staff. For example, I heard an interview with a CEO of a cosmetics factory south of Tel Aviv. They have burnt through their emergency fund of 4 million shekels, which allowed him to retain all of the 150 employees. He now has to release 40. Not a hint of support from the elected officials.

In contrast, the Hong Kong model for dealing with their economic problems is worth studying. The bottom line is that money has been handed out in grants to commerce and to residents. It may still be a tough economic climate there, but not like in Israel.

Over the past 72 hours, Bibi has led the Israeli government in taking new measures to fight the spread of the virus. This includes not using air conditioners on buses – in the Mediterranean summer. For the record, due to security measures, buses in the West Bank must drive with the windows closed. Again, do the law makers really know what thy are talking about?

But what brought me back to the fear addressed in the comment on the ‘economic holocaust’ was the policy regarding Yeshivot (religious seminaries for men). These are known to be one of the main epicentres for the spread of the virus. Bibi wanted to close them.

Before I continue, take a moment to recall the leader of Jewish communities in China, who in March reported no illness in his following, because people adhered to the strict health warnings. A similar story can be told of a young rabbi in London, who threw people out of a Yeshiva and locked the doors.

In Israel, in July 2020, a key member of Bibi’s coalition, Moshe Gafni threatened to abandon his partner if the Yeshivot were closed. Against his better judgement and the clear advice of the officials at the Ministry of Health, Bibi gave way.

If politics is the art of compromise, let us understand what Mr. Netanyahu’s sterling creativity achieved. If the government had fallen and thus if he had lost his job, he would find it more difficult to delay his trial of corruption on several counts.

How many Yeshiva students and their families will now be infected unnecessarily? How many people will have to delay hospital treatment? How much extra cost will be placed on the health and social services? How how many could……..? Holocaust it is not, but it is utterly repugnant.

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