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The Shekel Before the Storm GA Magazine / Crisis, what crisis? By Aluf Benn Tags: GA, jewish world  Israel has yet to feel the wrath of the global economic crisis. Despite fearsome warnings in the business pages, the actual implications of the world's financial meltdown on the Israeli economy have so far been marginal. No Israeli bank or major company has collapsed, sparing the government from the need for economic first aid. By and large, Israelis are anxious about the coming crisis, which follows an unprecedented boom, and are waiting for a much-expected decline in real-estate prices. In the absence of a true emergency, the economy is playing only a secondary role in Israeli politics. The political system shrugged off the red alerts of a coming depression, and favored calling a general election in February rather than uniting around Tzipi Livni in a government aimed at creating stability. Until the election, economic leadership remains in the hands of the outgoing prime minister, Ehud Olmert; the governor of the Bank of Israel, renowned macroeconomist Stanley Fischer; and Finance Minister Roni Bar-On. At this stage of the national campaign, economic issues are barely being discussed, because of both tradition and circumstance. Historically, Israeli electoral contests have revolved around matters of war and peace, religious affiliation or the candidates' personalities. Even during the worst economic calamity in our history, in 1984 - when hyperinflation hit 400 percent, and the major banks went under and were duly nationalized - the campaign was about the Arab-Israeli conflict, and the voters did not punish Likud for the economic crisis that came about under its leadership (although it did have to share power with Labor in a national unity government after the election.) Advertisement Unlike in 1984, the current crisis is clearly not the fault of Israel's government. It's coming from abroad, so there is no reason for a political blame game. The only possible debate could be about the future: who will deal better with the recession and prevent a severe downturn. Likud leader Benjamin Netanyahu is trying to leverage his achievements as finance minister, a post he filled between 2003 and 2005, and arguing that he "saved the economy" from the ruins of the Palestinian intifada. Indeed, Netanyahu has been the only Israeli leader with a business management degree (from the Massachusetts Institute of Technology) and the only one with strong ideological convictions about economic matters. Having experienced his political coming of age in Reagan-era America, Netanyahu is deeply committed to competitive free markets. As prime minister a decade ago, he cut American economic aid, liberalized the shekel and promoted privatization. As finance minister, he cut welfare allowances and fought the unions, the banks and utility monopolies to encourage competition and drive people to the job market. He credits himself with the marked reduction of unemployment, from more than 11 percent to around 6 percent. Netanyahu's pro-business policy has endeared him to constituencies that previously disliked him for his hard line on peace and security. Even today, Netanyahu appears to be the last Reaganite in Israel. Launching his election campaign in a Knesset speech, Netanyahu argued for further tax cuts and a slashing of governmental red tape as the best means for economic recovery, rejecting the bon ton of fiscal expansion. Netanyahu put the economy first in his speech for good reason: Whether or not he is being unduly boastful, he enjoys a clear advantage in this field over his rival, Livni. The Kadima leader has little experience, education or even publicly known interest in economic matters. When asked about her economic policy during the Kadima primary in September, she said, "I am different from Netanyahu," but was vague on specifics. If elected, she will have to rely on advisers to form an economic policy. Livni is trying to avoid the issue, running on a platform of personality and leadership change rather than on a detailed agenda. Livni wants people to trust her for what she is, not for what she says. The main influence of the economic crisis on Israel's politics appears to be indirect, through the American election. The economy took precedence over foreign policy during the presidential campaign and will clearly dominate the agenda during the next administration. As U.S. president, Barack Obama will have little time to spare for Israeli-Arab peacemaking, and even Iran's nuclear program appears less important than saving the planet from a deep depression. This means that the next Israeli prime minister will have to fight for presidential quality time and pledge to assist America in its struggle for renewed popularity and influence in the world. Israel will be asked to work for regional stability and avoid crises, which may overburden Washington's decision-making organs. After all, Israel's economic impact in the world is marginal; its importance stems from its volatile position at the heart of a crisis-prone region. And that's another reason why peace and war overshadow the economy in our politics. Bookmark to del.icio.us   The King is dead Archeologists find new evidence for King Herod's tomb site. Al-Hasbara Israel launches Arabic YouTube channel to bypass Arab media.

Read & React Israel to boycott 'Durban II' anti-racism conference Responses: 91 Latest poll gives Likud big edge over Kadima Responses: 49 Peres: Evacuation of settlements may lead to civil war Responses: 30 IAEA: Syria site bombed by Israel bore features of nuclear reactor Responses: 52 Defense Min. turns blind eye as Israelis sell arms to enemies Responses: 18 More Headlines 11:56 Violent clashes erupt at Hebron house slated for evacuation 03:31 Latest poll gives Likud big edge over Kadima 10:10 ANALYSIS / Obama embrace of Arab peace plan could benefit Livni 09:25 Defense Min. turns blind eye as Israelis sell arms to enemies 11:38 Peres: Evacuation of settlers may lead to civil war 11:58 In Gaza coffee shops, men and women break strict taboos 12:00 Letter to the Editor / Museum of Tolerance is a beacon of light, not a wall 06:09 PA to publish first-ever ads in Hebrew explaining Arab peace plan 08:16 IAEA: Syria site bombed by Israel bore features of nuclear reactor 08:39 Abdullah II warns Olmert, Barak: Gaza action could snowball into Jordanian instability 22:05 Israel to boycott 'Durban II' anti-racism conference 08:00 Top media executives protest Israel's ban on journalists' entry to Gaza 12:24 Palestinian witnesses: Hamas man killed in Gaza explosion 02:07 Warsaw completes restoration project marking Jewish Ghetto boundaries 07:14 Finance minister reveals NIS 25 billion stimulus plan Previous Editions Select Day 19 nov 18 nov 17 nov 16 nov 14 nov 13 nov 12 nov 11 nov 10 nov 09 nov 07 nov 06 nov

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