Omer Moab, professor of economics at Reichman University and professor at Warwick University, was a guest today (Wednesday) on Israel Hayom's economic podcast "Added Value", and explained why in his opinion the legal reform is dangerous for the Israeli economy.
Interview with Prof. Omar Moab // Additional value
"The emphasis is mainly on the long term and not the immediate term, even though as soon as investors understand the long-term risk, then we also see it immediately in the exchange rates and the dollar against the shekel. The main issue that worries the economists who base the studies on is the issue of property rights. A ruler, if he has Unbridled power can interfere in the private market and damage property rights."
According to Moab, the possible damage to property rights could lead to a halt or a decrease in real investments in Israel: "The high-tech industry is the most mobile and easily moves from country to country. As soon as there are fewer investments, then there will be less demand for workers. Wages will be lower, employment will be of lower quality. The investments In the economy this is a critical thing.
Finance Minister Smotrich presenting the state budget (archive), photo: Oren Ben Hakon
"So, on the one hand, the foreign precipitation is precipitation less, they are now sitting on the fence - there are clear data on this and as a result there is a weakening of the shekel. And on the other hand, the Israeli investors are also frightened and say wait, maybe I should sell Israeli shares and buy shares abroad - also They convert shekels into dollars."
Moab faced claims by senior members of the government regarding the attempts of the opponents of the reform to create economic chaos in the country.
"It's classic Netanyahu's government and a full right-wing government - zero ability to deal with substantive claims. Instead they say we (the economists) are BDS and leftists, traitors, etc. - it's outrageous.
Demonstrations against the legal reform (archive), photo: Oren Ben Hakon
"After all, why do we go out to demonstrate and convey to the public the professional position of the economists? Because we want to harm Israel's economy? This claim is ridiculous, I claim that on the contrary, the one who wants to destroy the State of Israel is Levin and his friends. Why? They are willing to harm the economy very badly Because of their narrow interests. It's not in the general public's interest."
Regarding Finance Minister Bezalel Smotrich and the budget approved last week by the Moab government, he said: "For me, the finance minister is two people. One is the politician Smotrich who is in favor of the settlements and in favor of supporting the ultra-Orthodox, and in favor of legal reform for reasons that are not in the best interest of the economy - for that I criticize him, he is doing harm Great for the State of Israel. But as Minister of Finance, it is clear to me that he took the position very seriously, and I give him high marks for that. He is attentive to the professional level of the Ministry of Finance, he cares about the Israeli economy, and he wants the budget to be within the framework, and not have a large deficit."
Watch the full episode of Added Value - the economic podcast of "Israel Today"
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