Naftali Bennett Has Transformed Israel's Trade Ministry, Both in Name and in Agenda

The former Ministry of Industry, Trade and Labor says it will act to boost competition, bring Haredim into Israel's work force and aid small businesses.

Ora Coren
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Ora Coren

The Economy Ministry is expected to reposition itself, under its new head, Naftali Bennett, shifting from a virtual lobby for industrialists to an agent for increasing competition, reducing consumer prices and integrating more members of Israel's ultra-Orthodox community into the labor force. By definition the agency, formerly known as the Industry, Trade and Labor Ministry, is responsible for these areas as well as employment and consumer protection.

Bennett has explained to Israeli manufacturers that he is not their enemy, and sees his main role as removing regulatory barriers that hold them back. But he also stresses that they will not receive anti-competitive supports from his ministry.

In contrast to his predecessors Bennett is expected to be a hands-on minister who will impose order on his ministry's support programs, including its Investment Center and Office of the Chief Scientist. He managed to keep the majority of industry supports in the draft state budget for 2013-2014: In addition to NIS 1.3 billion total for the Chief Scientist's Office in these years the Economy Ministry will allocated NIS 200 million a year for job training for Haredim. The Investment Center is to receive NIS 450 million in 2013 and NIS 500 million in 2014.

The ministry has put increasing the number of Haredim who work near the top of its agenda, and is preparing for the potential absorption into the labor force of more than 15,000 married yeshiva students annually. The immediate employment options for Haredi men are considered fairly unattractive.

The Investment Center is examining various options for employing Haredim. One possibility consists of a one-year preparation program for Israel's bagrut, the college matriculation exam, at the level of 3 points in English and in mathematics, followed by a year of technological studies after which suitable candidates could be expect to be hired.

Ministry officials are currently leaning toward a program that combines paid work with vocational training. The ministry might fund 50%-70% of this training, as an incentive to employers, on top of state supports for the ultra-Orthodox

The competition track
In keeping with Bennett's vision of ushering in a new era of economic competition, the Investment Center is evaluating ways to grant benefits to enterprises operating in highly concentrated industries, for the purpose of increasing competition. The center's food committee considered aiding an Internet-only supermarket with the goal of competing with the online stores of the Mega and Supersol chains in order to improve service and reduce prices, but abandoned the idea.

Bennett is committed to reenergizing Israel's technology education, and has promised that allocations to technical colleges will not be cut in the new budget. His ministry is would not be cut. In addition, a new Economy Ministry website, scheduled to go live in June, will provide information about 150 or so high-demand professions, including occupational outlooks and salary data. The information, which at a later stage will specify occupations by geographical region, is expected to be particularly helpful to recently discharged soldiers who are considering the study options.

In the area of foreign trade Bennett is expected to place an emphasis on the Far East, especially India and China. Since budgetary restraints prohibit the opening of additional foreign trade offices the ministry might shut a number of representations in Western states so that it can expand its presence in the Far East.

Bennett says promoting small businesses is high on his agenda. "I believe in strengthening small businesses by providing credit," he said, adding, "There's a NIS 4.5 billion fund for government loan guarantees, NIS 1.5 billion of which has been used. I'm calling on small businesses: Borrow from the government loan fund."

According to Bennett, loan applications from small businesses are processed within three weeks and half of them are approved. While Bennett says the loan conditions are excellent, some business people say the banks, which actually issue the loans after the ministry gives its approval, make unreasonable guarantee demands.

Economy Minister Naftali Bennett, right, with Finance Minister Yair Lapid.Credit: Emil Salman

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