The way to combat poverty is to encourage more people to set up their own businesses, argued Jacob Kuperberg, president of the Israel Business Consultants Association (IBCA).

"A considerable percentage of the budget in the war against poverty should be spent on encouraging more new businesses to open," Kuperberg told an IBCA forum yesterday. "Problems of unemployment will not be solved solely by giving professional training to workers, but also through giving financial and managerial assistance in starting small businesses and preventing their collapse."

Kuperberg was responding to acting Finance Minister Ehud Olmert's recent decision to focus more effort on reducing poverty, and his appointment this week of a treasury team to draft proposals by the end of the month.

"In every proposal to solve the problem, the most important solution has been missing - encouraging the jobless to find employment through opening their own business. Sometimes it's much easier for an unemployed person lacking an academic background to open a small enterprise, such as a market stall, than to find work as a salaried worker."

Kuperberg suggested more funds be directed in educating people about starting up on their own, and to boost state-backed loans available for small businesses.