Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

4 Nissan 5765 - April 13, 2005 | Mordecai Plaut, director Published Weekly









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Shema Yisrael Torah Network
Shema Yisrael Torah Network











Netanyahu: Israel will be Among the Richest 10 Countries Within 15 Years; Critics: The Poor Cannot Wait 15 Years

by M. Plaut and Yated Ne'eman Staff

At a press conference held to mark two years at his post, Minister of Finance Benjamin Netanyahu discussed his strategic goals. He claimed that if it follows his economic program, within fifteen years Israel can be one of the top ten countries in the world in terms of per capita income and standard of living. Critics, including Rabbi Avrohom Ravitz and Rabbi Moshe Gafni of Degel Hatorah, said that the poor cannot wait ten years.

Netanyahu said: "Two years ago when the Israeli economy was floundering, we came and presented a recovery plan and gave certain predictions. Some laughed, some ignored, but today we can all see the results."

He quoted predictions of The Economist that Israel will be the fastest growing economy in the West in the course of the next few years. "For years we haven't set any economic or social goals. I want to do so here. In fact, the past two years were the beginning of what we're doing," Netanyahu said. He mentioned Ireland, Cyprus and Singapore as examples of countries that Israel could learn from in a pursuit of growth.

Within 10 years, Israel's GDP per capita will surpass the Western European average, and within 15 years, Israel's standard of living will among the top 10, Netanyahu pledged, provided his reforms are allowed to run their course.

Netanyahu boasted that the first two years of his reform program have attained all the initial goals: growth has reached 4.3 percent yearly; the average wage rose 3.5 percent; unemployment dropped to 9.9 percent; the interest rate plummeted from 8.7 percent in April 2003 to 3.5 percent today; the mortgage rate is 1.7 percent, and some 100,000 Israelis have joined the workforce.

Ireland's economic transformation served as the major example for the kind of changes Netanyahu believes are possible here. Netanyahu noted that Ireland lowered its unemployment rate from 17.2 percent in 1990 to 4.7 percent in 2003, while its GDP per capita more than doubled, from $14,400 to $29,600. In the same period Israel's GDP per capita rose from $16,800 to only $19,800. Ireland was in worse shape than Israel 15 years ago, and is in significantly better shape now, Netanyahu said. Israel's per capita GDP has since fallen to under $18,000.

"What did they do?" Netanyahu asked. "They lowered taxes, cancelled monopolies, made incentives to work, cut bureaucracy, privatized companies, and increased competition. There is a word for it: they implemented free market economics. They persevered for at least a decade, and they passed us by."

Netanyahu also attacked policies which, he said, allowed the number of unemployed receiving state support to multiply sixfold since 1990, while the population grew only 43 percent. "An indiscriminate allowance policy brought about the lowest work participation level in the western world, . . . hurt the truly needy and brought the country to the edge of economic collapse," he charged.

Responding to criticism that his policies are a social disaster, Netanyahu insisted that apparently worsening conditions resulting from the reforms are only temporary. In the model countries as well, he said, there were initial rises in inequality indices, "yet immediately afterward they narrowed gaps, raised the standard of living of their citizens, and wiped out poverty almost entirely."

When a country reaches the top, Netanyahu said, "All poverty and unemployment problems fade away. Suddenly there are budgets, social needs are taken care of, everybody makes more money."

The reaction to Netanyahu's declarations was mixed. There were expressions of support, but there were serious reservations about the social consequences of his policies.

MK Rabbi Avrohom Ravitz (Degel HaTorah) told Yated Ne'eman that in his new post as Deputy Minister of Welfare he sees every day, "the desperation of families that cannot wait for ten years for Israel's economic recovery, even if the Finance Minister's forecasts are correct. Netanyahu forgot that the weakest tenth of the population cannot philosophize on questions of correct economics. It confronts poverty, hunger and tribulations on a daily basis. Thousands of high-risk youths are in a state of desperation and imperiled by the streets and there is nobody to care for them and to provide suitable solutions. Even if the economy is good from an academic standpoint it must be kept in mind we are dealing with human beings beneath the poverty line.

"The Finance Minister and the entire government must also take into account the large segment of the population that chooses to lead meaningful lives by dedicating all of their time to Torah study and knowingly chose to enter the category of `beneath the poverty line.' Even those under financial strain have a red line and the government crossed it long ago. Furthermore life with dignity is no longer feasible. This is a high-caliber segment of the public which chooses Jewish living over Irish or Swedish economics. The general public must realize that the bnei Torah sector has undertaken spiritual tasks in order to justify our existence as the Jewish people, and there is an obligation to support this public and not to allow it to collapse economically."

MK Rabbi Moshe Gafni said, "Indeed during these two years the rich have become richer but the middle class and lower classes have become poorer. While the number of unemployed has not decreased, while the wage rate in the state is below all other Western nations, while one-third of those employed earn less than NIS 2,000 ($450) per month, while the social policy has totally collapsed in the majority of Western nations, the Finance Minister boasts of economic growth unknown to most citizens in the State of Israel who are now in a more dire state of economic hardship after his two years in office.

"Be'ezras Hashem the number of terrorist attacks has decreased significantly. Tourism has recovered, the world market, especially markets in the US, grew substantially— facts that should have brought the market and Israeli society to economic prosperity. Only the Finance Minister's failed policy places the majority of citizens in Israel in the same position as those living in a third-world state. Without employment, without making a living with dignity and without a welfare policy. It comes as no surprise that Finance Minister Binyamin Netanyahu's friends are from the top tenth [income bracket] alone."


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