If you want to plan for the future, awareness of the need for strategy is the first step, Prime Minister Benjamin Netanyahu told TheMarker's 2021 Conference in his keynote address yesterday.
"Good strategy with mediocre execution is better than mediocre strategy excellently performed," the prime minister said. "Our goal is therefore to present an excellent strategy for Israel."
He is following up his words with actions, mandating Haim Shani, the director-general at the Finance Ministry, and Eugene Kandel, head of the National Economic Council, to formulate a plan for Israel's future development. His declared aim is for Israel to rank 15th in the world in terms of GDP per capita.
Israel has been falling behind in the global race, the prime minister said, and the answers lie in three crucial things: vision, political strength, and political will. During the last decade, several reforms were passed and executed despite broad opposition. But at the start of the 2000s, Israel was in crisis.
"There are two situations in which strategic change can be made: either amidst crisis, or by consensus. We took advantage of the 2003 crisis to make changes that boosted economic growth."
Israel has made great strategic and economic strides in the last 20 years, the prime minister said: In the late 1980s it opened the markets to competition. "That forced us to be competitive," Netanyahu said.
At the end of that decade came the wave of immigration from the former Soviet states, people with great capacities who helped raise Israel's output and GDP per capita.
Netanyahu lauded the 2021 Conference, saying it is needed to advance the conversation at a time when no innovation-spurring crisis is looming.
But other nations are also formulating plans to advance. New competition constantly arises, the prime minister said. "We cannot rest on our laurels," he said. "We are entering a more competitive era."
Growth is crucial, he warned: "The needs of health care, education and defense need to be financed. Defense expenditure will grow in any case, during times of peace as well, because technology advances and because of our location."
Netanyahu told the conference that only a strong country can achieve peace.
"Peace is not made with the weak. Part of our strength is to generate the economic growth to which peace can contribute, but cannot assure.
"We had a wonderful state of peace, including exports, imports and economic relations with Iran. It evaporated overnight," he said. "We had wonderful relations with Turkey, with 400,000 Israelis traveling there each year. I hope we can restore these good relations. What I say is that achieving peace does not promise it will remain. What promises it is our ability to protect the peace and develop relationships of profitability with the populations and nations around us."
The upshot, Netanyahu said, is that Israel needs a strong economy.
On Israel's future, the prime minister said he had marked five areas, in some of which there are problems. "Not every setback is a barrier: it is opportunity." Netanyahu listed the five areas as increasing participation in the workforce, developing the Galilee and Negev, promoting high tech and connecting infrastructure, in order to take advantage of our geographic advantage.
And the fifth, Netanyahu said, is "education, education, education. It isn't enough to say we're putting money into it."
But the greatest success of economic strategy is to have successive governments adopt it, Netanyahu said.
On the controversial issue of the gas royalties, Netanyahu expressed support for the Sheshinski panel's recommendations and quipped, "Take Herzl. He had a vision. Did he know there was gas? I wouldn't advise basing our vision on a windfall from the heavens or gas in the waters."
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