The Rise of the Shekel

In the mid-1980s, the Israeli government, facing runaway inflation and a general economic crisis, implemented a series of fiscal reforms, which included the introduction of the New Israel Shekel. Not only has it proved far stabler than its predecessor, its recent increase in purchasing power has helped make Tel Aviv the world’s most expensive city. Matti Friedman writes:

It wasn’t too long ago that a dollar could easily buy four shekels—in fact, there was a time when a dollar could buy 1,630 shekels [old shekels, that is]—but as I write these lines the dollar is struggling, incredibly, to buy a measly three. The dollars in my bank account are worth a fifth less in shekels than they were last March, and the same trend affects my parents’ pensions and what I’ll get from Tablet for writing this column.

American currency has always played an important role in the emotional life of Israelis, who used to hoard dollars under floor tiles. Serious business was done in dollars, which were like that stable guy who’d always be there for you. Our own colorful shekel notes, by contrast, were like the high-strung friend you hung out with but wouldn’t trust with your car.

But important as the reforms of the 1980s were, governments do the most to help economic growth by staying out of the way:

Those watching Israel from the outside are condemned to mistake political news for the life of the country. Insiders understand that over the past two decades something deep has come together here in culture and economics, and that modern Israeli society is only tenuously connected to the government. That’s the answer to a perplexing question—namely, how on earth the economy managed to boom through the past two years of political deadlock and infighting, with no national budget.

“It’s a reflection of the fact that to some extent our economy isn’t dependent on the government,” [the Tel Aviv University economist] Paul Rivlin said. “The politicians can muck it up, and I wouldn’t put it past them, but even having four elections one after the other didn’t do it.” Just in the first half of this year the sum of foreign investments in Israel, mainly in tech, reached $37 billion—close to the sum for all of the previous year, and greater than the sum for the year before that.

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More about: Economic freedom, Israeli economy

Terror Returns to Israel

Nov. 28 2022

On Wednesday, a double bombing in Jerusalem left two dead, and many others injured—an attack the likes of which has not been seen since 2016. In a Jenin hospital, meanwhile, armed Palestinians removed an Israeli who had been injured in a car accident, reportedly murdering him in the process, and held his body hostage for two days. All this comes as a year that has seen numerous stabbings, shootings, and other terrorist attacks is drawing to a close. Yaakov Lappin comments:

Unlike the individual or small groups of terrorists who, acting on radical ideology and incitement to violence, picked up a gun, a knife, or embarked on a car-ramming attack, this time a better organized terrorist cell detonated two bombs—apparently by remote control—at bus stops in the capital. Police and the Shin Bet have exhausted their immediate physical searches, and the hunt for the perpetrators will now move to the intelligence front.

It is too soon to know who, or which organization, conducted the attack, but it is possible to note that in recent years, the Popular Front for the Liberation of Palestine (PFLP) has taken a lead in remote-control-bombing terrorism. Last week, a car bomb that likely contained explosives detonated by remote control was discovered by the Israel Defense Forces in Samaria, after it caught fire prematurely. In August 2019, a PFLP cell detonated a remote-control bomb in Dolev, seventeen miles northwest of Jerusalem, killing a seventeen-year-old Israeli girl and seriously wounding her father and brother. Members of that terror cell were later arrested.

With the Palestinian Authority (PA) losing its grip in parts of Samaria to armed terror gangs, and the image of the PA at an all-time low among Palestinians, in no small part due to corruption, nepotism, and its violation of human rights . . . the current situation does not look promising.

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More about: Israeli Security, Jerusalem, Palestinian terror