Don’t Cry for These Bankers, Argentina

How is it that three contenders for Bank of Israel governorship hail from Cordoba?

Three of the dozen or so contenders for the top job at the Bank of Israel — past and present included — happen to have been born in Argentina.

And if that doesn’t seem to defy the law of probability - Argentinians, after all, don’t make up a quarter of the Israeli population - then consider this: All three also happen to come from Cordoba, the country’s second largest city, about 700 kilometers north of Buenos Aires, the capital and main center of Jewish life.

Mario Blejer, the current front-runner, served briefly as the Argentinian central bank governor and has held senior positions at the World Bank and International Monetary Fund. Pretty much an unknown in Israel until recent weeks, he entered the race after the previous nominee, fellow Argentinian Leo Leiderman, somewhat mysteriously withdrew his candidacy saying he preferred to continue working as the chief economist of Bank Hapoalim and professor at Tel Aviv University. (Leiderman was chosen after the previous nominee, Jacob Frenkel, pulled out following disclosures of an investigation into his involvement in an alleged shoplifting affair in Hong Kong.)

Leiderman had previously headed the emerging markets research department at Deutsche Bank, a position he assumed after spending 10 years on the senior executive board of the Bank of Israel. Like Blejer, he received his doctorate in economics from the University of Chicago after studying at the Hebrew University of Jerusalem. But unlike Blejer, he maintains his home base in Israel.

Manuel Trajtenberg (notice the similar use of the Spanish “j” in his and Blejer’s names) was a candidate earlier on for the governorship of the central bank but has since stepped aside. Among the senior economic positions in Israel this Cordoba native has held were chair of the National Economic Council and head of the government-appointed committee set up to recommend policy changes following the mass social protests of summer 2011. Like his fellow Argentinian contenders, Trajtenberg headed off to the United States, in this case Harvard, to complete his doctorate after studying economics in Jerusalem.

It’s no secret that Spanish is the mother tongue of some of the big stars of Israel’s small but elite community of economists. Argentinian-born Oscar Volij heads the economics department at Ben-Gurion University of the Negev. Sitting on the faculty of the economics department of Tel Aviv University, besides Leiderman, are two other representatives of the land of tango, assado and Maradona: Analia Schlosser and Zvi Hercowitz. The Argentinian contingent at the economics department of the Hebrew University includes, among its ranks, Saul Lach and recently-retired Morris Teubal.

Joining the list are some well-known names from other parts of South America — including Chilean-born Rafi Melnick, a former senior economist at the Bank of Israel who serves today as provost of the Interdisciplinary Center Herzliya, and Uruguayan-born Roby Nathanson, former chief economist of the Histadrut and economic adviser to several prime ministers. Today, he runs the Macro Center for Political Economics, a think tank and research center. (Although it doesn’t count, the husband of Karnit Flug, the senior central bank economist whose candidacy for the governorship was rejected by Prime Minister Benjamin Netanyahu, is also South American.)

A mere coincidence?

Nathanson thinks not.

“It’s important to understand that these are people who grew up in a place where there was lots of public discourse about economic and social change,” he says. “It’s part of the culture, and it becomes part of your DNA. I remember talking about these issues at home as a child.”

Unlike the situation in the United States, where many Jews have made names for themselves in the field of economics and stayed put, notes Nathanson, in South America, political instability and persecution drove many great Jewish minds away, and quite a few ended up in Israel.

Moshe Justman, a professor of economics at Ben-Gurion University and president of the Israel Economic Association, is not convinced that South Americans are over-represented among Israel’s top economists, noting that to date, none have been appointed governor of the Bank of Israel or even deputy governor.

Still, he says, there’s a reason many South Americans have gravitated toward the discipline of economics. “It’s probably true that the generation that came here in the 1970s were more socially committed, a reflection of their Argentinian experience, and perhaps more interested in macro issues for the same reasons,” he notes.

According to Argentinian-born Leon Amiras, a Jerusalem-based lawyer and chairman of the Latin American Immigrants’ Association, somewhere between 100,000 and 120,000 Jews from Spanish-speaking countries have settled in Israel since the state was founded, about 60,000 of them from Argentina.

South Americans, he says, are well represented — and even over-represented — not only among Israel’s top economists, but also among its top doctors and psychologists. They are also quite dominant in the other number-crunching professions, like accountants and tax advisers.

“I’d say the reason South Americans have had such success in these professions,” he says, “is that they bring with them a combination of South American temperament, very similar to the Israeli temperament, and North American standards of education.”

Volij, of Ben-Gurion University, calls it pure coincidence that several of the nominees for the top position at the central bank were Argentinian. “I don't know about economists in general, but concerning academics, there is no preponderance whatsoever of Argentinian or South American people,” he says, adding somewhat jokingly, “On the other hand, we do have a pope.”

Hercowitz, of Tel Aviv University, notes that all three Argentinian contenders for the central bank governorship studied at the Hebrew University in the early 1970s, when many South Americans came to Israel. “It seems to have been a one-time phenomenon,” he notes. “I don’t see more than a few South American economists here before or after that generation. But to say that it’s a coincidence is not very satisfactory because everything should have some explanation.”

There’s certainly no denying the fact, says Nathanson, that at big events held by the Bank of Israel or the Israel Economic Association, “it is very common to hear people standing around speaking among themselves in Spanish.”

And in many cases, a very specific type of Spanish. “If you’re Argentinian, you can easily pick out those who come from Cordoba,” says Amiras. “If you ever hear Blejer, Leiderman and Trajtenberg break into Spanish, you’ll notice that they still use the sing-song intonation that Cordoba is known for.”

Bloomberg
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