It will be good, but ... why will Israel remain an island of economic stability?

After a weekend of sharp declines in the world capital markets, one may wonder what of all this will affect the Israeli economy as well, or rather: how is it that the impact on us is limited in the meantime?

Somehow, the answer manages to be both encouraging and frightening

Nir Kipnis

12/06/2022

Sunday, 12 June 2022, 08:15 Updated: 08:51

• Share on Facebook

• Share on WhatsApp

• Share on Twitter

• Share on Email

• Share on general

• Comments

  Comments

Inflation data in the United States once again dragged Wall Street stock indices down.

While the sharp declines are not a landslide, certainly not a collapse, it is certainly an ongoing crisis - and will have implications for the global economy as well, and the shock waves it produces will also reach the shores of the eastern Mediterranean basin.

The causes of the crisis are too many to name, but if one common denominator is sought, it stems from the fact that in the United States, as in Israel, a significant proportion of those who inherited

power are politicians with an opposition agenda.

Biden under pressure from his party's left wing, mainly on environmental issues (for the avoidance of doubt: an issue of existential significance, but also one that can not be conducted on an agenda against me) and foreign policy, and the left wing of the "change government" here in Israel, especially as expressed (For example) in the functioning of the Ministers of Labor and Meretz, in the offices where they have meanwhile done more harm than good,

More on Walla!

Knowledge is power: Get to know the loan at a fixed interest rate

In collaboration with ICC

US President Joe Biden closes eyes on the dangers of adopting a counter-environmental strategy (Photo: Reuters, REUTERS / Al Drago)

Why me politics now?

To sum up in a sentence: Apparently there are agendas designed to correspond with the mainstream and shape it from the outside, rather than leading a new agenda, exciting as it may sound in theory.

While politics needs inspiration from big ideas, in the end it is first and foremost a matter of action.

In the midst of the global economic crisis, Israel has emerged as an island of stability.

Although inflation in Israel is already present, it is low compared to our countries of reference.

Growth will be hurt, but in a comparative test (against the same control group) it will remain good and encouraging.

State tax revenues may not continue to be as fantastic as they are today, but the little fat accumulated in the public coffers will allow for economic survival even under dietary conditions, without becoming modest.

Politicians, of course, are busy trying and taking credit for the success: Netanyahu and Katz are trying to attribute to themselves the flourishing that began in their time, despite dealing with a once-in-a-century global health crisis.

Opposite them is Bennett and Lieberman who claim "all mine".

Each side hastened to appropriate the economic boom, but its origins are far from the political field (Photo: Flash 90, Jonathan Zindler, Mark Israel Salem)

Israel as a cure for the pains of humanity

Only the reality is a little different: the Israeli economy is successful because in Israel there is not a bad accumulation at all, to say the least, of solutions to some of humanity's most painful needs.

Many of the areas sheltered under the broad definition of "high-tech" offer a cure for the world's greatest pains: Fear of cyber-attacks?

Who else as Israel can offer solutions.

Food shortages?

Agro-Tech and Food-Tech in Israel have some good ideas.

The arms race reopens - including rich countries like Sweden, Finland, Germany and more?

Rafael, the military and aerospace industries, Elbit and more - will be happy to offer solutions, and these responses can also be extended to the fields of fintech, medicine and more.

In other words: the Israeli economy may not be able to completely escape the consequences of what appears to be a global recession, for example in areas such as rising commodity and energy prices (when oil prices rise, we will also pay more), but the new world order has created quite a few opportunities.

Udi Kagan in an excerpt from the 19th season of "A Wonderful Land" (Keshet 12)

Unexpected existential threats

Even our unique security situation, along with threats like Hamas and Hezbollah (and a little further away like the Iranian nuclear program), also creates some opportunities.

The biggest of which is of course a growing relationship with the Gulf states - who would have believed?

If the interests not only bring the United Arab Emirates and Bahrain (with all due respect) closer to Israel, but also slightly normalize the position of the Saudi monarchy, for example, there is another chance that the Iranian plots will be seen as a blessing in disguise.

But as with any business analysis at its most basic level, after the opportunities, the dangers must also be mentioned:

alongside the above options, there are still two serious threats that could harm - albeit in the longer term - Israel's social and economic resilience, and they are no less dangerous than the threat. Security, maybe even more (yet, with the security threat we are dealing with this success in the 75th year and some would say even more).

The first is the future of education.

It sounds like a blown concept, but it has far-reaching implications for Israel's socio-economic resilience, if not tomorrow morning then in a few years.

Education in Israel must be better and more equal.

In the current situation where mostly strong and wealthy communities can provide students with better tools for coping with the world of vision and employment of tomorrow, the social rift is only a matter of time.

If Udi Kagan, in the character of the rare bubble entrepreneur Hackerman ("Great Country") divided the world into winners and "users", then the problem will only get worse.

Haredim (illustration).

Independent education is legitimate, but if it wants to enjoy state support, it must undergo reform (Photo: ShutterStock)

Haredi for our future

Therefore, an urgent reform is needed that will bring education, with an emphasis on technology (though not only of course. Cultural richness also reflects on the scientific vision), to the geographical and social periphery of Israeli society.

This does not mean that ultra-Orthodox education, for example core education, should be forced, but it certainly means that the State of Israel - no matter which government runs it - should make it clear to the ultra-Orthodox that this behavior, which has become the opposite of the labor market, will charge them.

They are of course free to choose the appropriate education for their children, but if it is one that will not allow them to integrate into the future labor market, then only the ultra-Orthodox public - and not the State of Israel - is concerned about their well-being.

Will it happen?

A big doubt, certainly not in a political reality where the so-called "language of the scales" has become the main thing.

At least in this context, the current Minister of Finance, Avigdor Lieberman, should be complimented. Worth any praise.

To his detriment, the "high-tech vibe" was perceived as a Tel Aviv, "northern" and Ashkenazi experience, among a large part of the public (Photo: ShutterStock)

When Yogev met Sasha

The second area is even more painful and descends to the sources of the social rift that crosses Israeli society just as the Syrian-African rift crosses the piece of land on which it exists.

The blossoming of Israeli high-tech is not accidental.

It took place mainly as a result of a spectacular encounter between the Israeli-Sabra initiative, if you will - that of the Air Force and the General Staff Reconnaissance, with a population seeking academic and scientific achievements, most of which is part of the dowry brought by the former Soviet Union.

Perhaps this is why the image was born that high-tech (if not all the introduction!) Belongs on the one hand to the "good old" Land of Israel (with or without quotes) whose spearhead is the elite units of the IDF, and software engineers of Eastern European descent

. An exact definition (and some would even say wrong), but one thing is undisputed: it has become entrenched in Israeli thought and has painted the economic boom that the knowledge-intensive industry has brought with it in a very particular socio-social nuance.

We see the consequences in the comparative behavior of large groups in Israeli society and in their convergence into traditional frameworks, which are perceived by them as representing the core values ​​that differentiate them from the "northern high-tech".

Instead of treating this channel as a tremendous opportunity to reduce disparities (a start-up company that started in a warehouse in the parents' home can grow almost as much in an established locality or in the economic periphery), a conflict has arisen.

This confrontation is, unfortunately, fueled by those who have a political gain from deepening the socio-cultural-religious rift among Israelis, precisely in an era in which political disputes between right and left are almost non-existent.

The celebrations in the coalition with the transfer of the budget in November 2021. You will not believe it, but the political upheaval is actually the least important of those that Israel went through that year (Photo: Knesset Spokeswoman, Danny Shem Tov)

The economic upheaval we have hardly heard of

The State of Israel underwent a tremendous, truly dramatic revolution during 2021. I do not mean the change of government (which also had a positive effect on the economy, in the form of a state budget transfer. Significant and important, but not a game changer), but a revolution in Israeli exports. For the first time the toilets overtook the goods.

To simplify the last sentence, then the export of ideas (especially in the high-tech field) has become much more significant than the export of oranges.

This revolution expresses Israel's being a world research and development center and as long as we maintain this special status, we will continue to export to the world the most accurate and effective solutions to its needs.

But even those who move forward must occasionally look up at the mirror - and when we do, we will find that not only the Iranian nuclear engineer sits in the back seat, but also Israelis who translate, for whatever reason (religious, cultural and political), their political agenda to oppose For engineering studies.

This is a threat, but not one that a responsible political leadership can not deal with.

So we add another problem: the current leadership is too weak to promote any initiative, vital as it may be, while its political alternative draws some of its power from conservative forces that have marked practical education as foreign labor.

Or to be brief: The Wall Street bull, the symbol of the boom in the capital market, is not the golden calf.

• Of money

• Opinions

Tags

• Hi-Tech

• Benjamin Netanyahu

• Wall Street