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Bank of Israel Governor Stanley Fischer yesterday criticized the decline of the country's education standards, and warned that without top-quality education, Israel would lose all its advantages.

"No issue is more critical for our future than education. In the long term, it is as important as national security," Fischer said in an address at the Open University's graduation ceremony.

Fischer said education was necessary for quick-paced, sustained economic growth, and that Israel's main natural asset was human capital.

Fischer said that the increase in expenditures per pupil from 1995 to 2005 in Israel was lower than the Organization for Economic Co-operation and Development average.

Higher education also requires rethinking, he said.

Fischer said that although the government's expenditure on education is relatively large, the pupils' achievements are relatively low. Some education facilities don't provide even basic mathematics, science and English, he said.

One of the most troubling trends is the brain drain. "It's enough to see the names of Israelis in the important universities in the United States and other countries. It's hard to put up with this," he said.