- High taxes
- Socio-economic divide
- Centralization and cartels
- None of the above
Results from Ma'ariv
I'm going to have to go with
none of the above. I mean, yeah, those are indeed problems, but they asked what's the
biggest problem. Let's look at each one of them, and then I'll reveal the big secret: what I think is the real economic factor in Israel that has been slowing or speeding economic development for the past 56+ years.
Disclaimer and little small print: yes, I know that I'm not Israeli so don't start yelling at me for saying things about the Israeli economy without living there, but I've seen it and I know my economics and my history and I know a few things here and there. These are also the ramblings of someone who cares deeply about what's going on over there. So just bear with me for a moment. :)
High taxes (Ma'ariv readers think: 64%)
High taxes are a problem, I guess. Who likes paying high taxes? Taxes in Israel are in fact extremely high,
reaching upwards of 50% for incomes of something around 18,000 NIS and up (
that's a little less than $4000 as of today). Wow! That's nuts. Considering that I'm not far from making that much money even this summer... hmm, that's pretty high. I'm not in the mood to pay 50% anytime soon.
Do high taxes stop people from making money? No, they just give a higher proportion to the government. Does it give people less to spend? Yes, it does. Is it something that the Israeli economy can do alright with? Yes. I mean, they could do better with lower taxes, but come on - is it the
biggest problem? No. There are bigger issues to deal with first before you can approach the most materialistic issue, the amount that's taken out of your pocket yearly.
Socio-economic divide (Ma'ariv readers think: 7%)
The Museum on the Seam is a great place to learn all about this. It's one of Israel's biggest problems - something which will cause Israel to have a major demographics problem within twenty years. Most people will agree that it is indeed an issue when you have Me'ah She'arim, the most famous ultra-orthodox neighborhood in Jerusalem, where they will do all sorts of crazy things.
(By the way, just to get it out of the way, I'm not such a big fan of the Ultra-Orthodox. They're great people, my kibbutz dad, grew up there, but really I can't stand ultra-whatevers. If you're ultra-whatever, you're also ultra-nuts.)
It's something that has to be dealt with, but it's not an economic problem. The chilonim aren't boycotting haredim businesses and vice-versa. It's simply a social problem, and economic growth will help it.
Centralization and Cartels (Ma'ariv readers think: 25%)
This is a real economic issue, as opposed to the socio-economic divide. Companies like
Bezeq and
El Al were goverment-controlled monopolies, and right now they are currently being broken up. By "broken up", I mean rather that they are being sold off to the public. This is a Good Thing™, I suppose. Though El Al might not offer such cheap flights for
olim chadashim...
However, Israel is such a small country with such a small population, with more companies competing against each other, will each have such a small customer-base that nobody will have economies of scale, and so it will be more expensive? I don't know right now, but five years from now it should be apparent.
I think the real cartel that is an economic problem is none other than
the histadrut (the national labor union). Think: If your workforce is going on strike twice a year, it'll cause economic problems, right? The histadrut itself isn't a problem, the workers have a right to represent themselves in labor unions. I'm a big fan of the unions usually, except when they can bring the economy to a halt whenever they want, and so have complete control over it if they want. I remember last year when I went to Rome, and my friends had visa problems because the histadrut was on strike, and they couldn't get their visas renewed.
When people are trying to import or export and can't get through customs because the histadrut is on strike, well, it's a problem. When people can't get visas, it's a problem. This is a major problem for the economy. Who would want to do business with Israel if they can't get in and out of the country?
None of the Above (Ma'ariv readers think: 5%)
Well this one is very broad. I can't really say how this
isn't an economic problem because it just doesn't explain itself so well.
I tend to agree that Israel's biggest economic problem is indeed
none of the above. I think that it happens to be one thing: the lack of peace in the region. I'm not even talking about the whole Israeli-Palestinian thing, though that's certainly a part of it, rather it's simple economics.
Business flourishes best in peaceful and uneventful times. When people can be assured that tomorrow, war isn't going to break out, when they aren't going to have to leave their job for a month every year until they're fifty for
miluim (reserve duty), when people are assured that their state has a future no matter what, people will be more apt to invest in Israeli ventures and to start out on their own rather than just take the job at the office park. That's what really drives economies - people who aren't happy with their desk job and start their own businesses, and grow them. But a desk job is more reliable, easier, and in times when the future isn't certain they're probably going to keep the steady job rather than set out and blaze a new path into the sunset.
Now I'm not going to suggest
how to get peace in the region.
That's been gone over just a few too many times. I just think that it happens to be the biggest economic problem. In times when Israel's future seemed bright - like after the Six-Day War - business boomed. Other times it didn't seem so good, it got worse. It's the major economic factor for Israel.
Israel just wants to be
left alone so that Israelis can live their lives and have a grand old time. Unfortunately, I'm afraid that there are
certain neighbors who wouldn't put up with that.
