Israel’s Current Government Aims to Imitate Benjamin Netanyahu’s Great Economic Transformation

The Knesset is considering an ambitious budget bill that promises sweeping reform. As Haviv Rettig Gur explains:

This bill . . . upends the old ways of thinking about the Israeli state’s responsibility for its Arab citizens; takes a sledgehammer to structural obstructions that have long plagued the Israeli economy, from protectionist import policies to state price-setting on basic staples; reimagines Israel’s public-transportation network and environmental commitments; . . . opens the banking system to more competition, especially online and via mobile apps; dramatically increases spending on health and defense while cutting expenditures on most other things; and promises a major overhaul and streamlining of governmental red tape.

To Gur, there are only two precedents in Israeli history for such radical change, each of which followed a major economic crisis, perhaps parallel to that caused by the coronavirus: the first was in 1985, when a unity government similar to the current one ended crippling inflation by wresting the country away from the socialism of its founders. The second was in 2003, when then-finance minister Benjamin Netanyahu enacted a further program of economic liberalization, paving the way for Israel’s high-tech revolution. At that time, the crisis was of a different kind:

[T]he Palestinian economy before 2000 was deeply integrated into, and dependent on, the Israeli economy—and was flourishing because of it. Israelis could safely travel in Palestinian cities in those days and had developed a habit of buying cheaper Palestinian goods and services, from car parts to dentistry, valued at hundreds of millions of dollars annually. Together with overseas tourists, they dropped half a billion dollars annually, equal to over 10 percent of the Palestinian GDP, at Jericho’s casino.

But Israel’s economy needed the Palestinians, too, at least in those days. As they grew wealthier from trade with Israel, Palestinians became eager consumers of Israeli products, with some $1.7 billion in Israeli exports to the PA annually, or 7 percent of total Israeli exports excluding diamonds. Palestinian labor drove the Israeli agriculture and construction industries.

The onset of the second intifada reversed those trends, hurting both sides deeply and in interconnected ways.

Read more at Times of Israel

More about: Benjamin Netanyahu, Israeli economy, Israeli politics, Second Intifada

It’s Time for Haredi Jews to Become Part of Israel’s Story

Unless the Supreme Court grants an extension from a recent ruling, on Monday the Israeli government will be required to withhold state funds from all yeshivas whose students don’t enlist in the IDF. The issue of draft exemptions for Haredim was already becoming more contentious than ever last year; it grew even more urgent after the beginning of the war, as the army for the first time in decades found itself suffering from a manpower crunch. Yehoshua Pfeffer, a haredi rabbi and writer, argues that haredi opposition to army service has become entirely disconnected from its original rationale:

The old imperative of “those outside of full-time Torah study must go to the army” was all but forgotten. . . . The fact that we do not enlist, all of us, regardless of how deeply we might be immersed in the sea of Torah, brings the wrath of Israeli society upon us, gives a bad name to all of haredi society, and desecrates the Name of Heaven. It might still bring harsh decrees upon the yeshiva world. It is time for us to engage in damage limitation.

In Pfeffer’s analysis, today’s haredi leaders, by declaring that they will fight the draft tooth and nail, are violating the explicit teachings of the very rabbis who created and supported the exemptions. He finds the current attempts by haredi publications to justify the status quo not only unconvincing but insincere. At the heart of the matter, according to Pfeffer, is a lack of haredi identification with Israel as a whole, a lack of feeling that the Israeli story is also the haredi story:

Today, it is high time we changed our tune. The new response to the demand for enlistment needs to state, first and foremost to ourselves, that this is our story. On the one hand, it is crucial to maintain and even strengthen our isolation from secular values and culture. . . . On the other hand, this cultural isolationism must not create alienation from our shared story with our fellow brethren living in the Holy Land. Participation in the army is one crucial element of this belonging.

Read more at Tzarich Iyun

More about: Haredim, IDF, Israeli society