Economically, Netanyahu Messed Up Pretty Bad Too

The prime minister could have improved chances of Arabs and Haredi Jews, pushed through health reform and broken up the natural gas monopoly, but his leadership skills are lacking.

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Netanyahu starring in a YouTube video ahead of Independence Day.
Netanyahu starring in a YouTube video ahead of Independence Day.Credit: YouTube

Let’s start with the Jewish National Fund. The cabinet approved the Finance Ministry’s proposal to use around 1 billion shekels ($250 million) of surplus JNF funds to boost construction and infrastructure projects. But in the Knesset the idea hit stiff opposition, led by Likud's Zeev Elkin and Yariv Levin, with obvious support from Avigdor Lieberman's Yisrael Beiteinu.

High-profile MKs from the governing coalition, God forbid the opposition, were the ones to scuttle the proposal, which would have bolstered the national budget and helped reduce housing prices.

The JNF is only one example. The recommendations of the committee to strengthen the health care system, led by and named after Health Minister Yael German, ran into a Knesset brick wall put up by Yisrael Beiteinu. Meanwhile, the bill for zero value-added tax for certain home buyers — which the cabinet approved after much hesitation — seems to have zero support in the Knesset, save for Yair Lapid's Yesh Atid.

If this is how the coalition treats its own bills, not to mention legislation vital to its survival like the budget bill, who needs an opposition?

There’s no doubt that Israel’s 33rd government has been a particularly shaky one. Every key player has vetoed others’ ideas instead of cooperating with them. To a large extent, the third Netanyahu government has brought us back to the shaky governments of the 1980s. These teams have done better destroying themselves than building anything.

From this perspective, it’s hard to regret that the third Netanyahu government will end its days after less than two years. The government has shown no ability to push things forward.

Economic successes, but no revolutions

The failure of the 33rd government is the failure of Prime Minister Benjamin Netanyahu more than anyone. Again, this is his third government. He has been prime minister for a total of nine years and is Israel’s second-longest-serving prime minister after David Ben-Gurion.

But comparing Netanyahu to Ben-Gurion is a bit bold. Let’s compare him to Yitzhak Shamir, the third-longest-serving prime minister with seven years at the helm.

Like Shamir, Netanyahu is a contender for the title Long-Serving Prime Minister Who Did the Least. This refers partly to the political stalemate — Israel has been wavering over whether to annex the West Bank and form one state or opt for two states for two peoples. Hasn’t the time come for us to decide?

But there has also been economic stagnation. At the end of six straight years as prime minister, Netanyahu can’t boast any major economic turnabouts.

His previous government, nearly the longest-serving one in Israel’s history, operated under the threat of the social-justice protests. It must be said: It did a lot fighting economic concentration and the high cost of living.

The list isn't too skimpy: the law for increasing competition in the food sector, the law for reducing economic concentration, free school from the age of 3 and the Sheshinski Committee’s recommendations on oil and natural-gas policy.

While all this is important, it’s nothing revolutionary. To change Israel’s future, Netanyahu should have acted forcefully on three issues: the ultra-Orthodox, the Israeli Arabs and government productivity and work relations.

But Netanyahu proved disappointing in each of the three. In everything concerning the ultra-Orthodox, Bibi was more a hindrance than a help. The law to get more ultra-Orthodox Jews, the Haredim, into the military passed despite him. And the passage of the bill requiring that the core curriculum be taught in ultra-Orthodox schools has been delayed largely because of him.

Netanyahu has also done damage in everything linked to the Israeli Arab community, and his pathetic act of aping Lieberman — his call to Israel’s Arabs to leave the country — set a new low point.

Netanyahu also didn't do enough to improve government productivity and work relations. Under Ehud Olmert and even more under Netanyahu, the Prime Minister’s Office has taken the lead in moves to improve the government’s work methods. Work plans were drawn up for the ministries, a strategic headquarters was set up, pilot offices were established to decentralize the crafting of the budget, and indexes were instituted to streamline regulation.

While all this is important, it doesn’t address the government’s thorniest problem — declining productivity as a result of ossified labor agreements and a lack of trust between workers and employers.

The reform of the Civil Service Commission was supposed to confront the government’s worst weaknesses, including employment relations. But Netanyahu fobbed off that reform, leaving Civil Service Commissioner Moshe Dayan to handle it on his own. The result was a missed historic opportunity, so the government is still wallowing in mediocrity.

This mediocre government reflects Netanyahu’s own mediocrity over his past two terms. Netanyahu doesn’t lead, whether economically or politically. Even more disturbing, there doesn’t seem to be anyone with the leadership skills to replace him.

This makes the approaching election a complete waste of time — it seems we can expect no significant change in the Knesset’s makeup, which means the paralysis that gripped the 33rd government could definitely repeat in the 34th.

The whole process will cost us three wasted months of an election campaign, a direct loss of roughly 1.5 billion shekels. Then there are the many more billions stemming from paralysis because no 2015 budget is in place.

When it’s all over, we’ll continue with our current gridlock. There’s no doubt Israel is suffering a terrible leadership crisis, and the longer it lasts, the harder it will be to get out of.

A few ministers who shone

It’s pretty hard to mourn the untimely demise of a government that spent more time in conflict than in action, and we definitely won’t miss Lapid, one of our worst finance ministers ever. We won’t miss Energy and Water Resources Minister Silvan Shalom either; he did everything but the work of his ministry — and completely neglected the vital task of breaking up the natural-gas monopoly.

Still, we’ll miss a few ministers; one is German, who led the long and complex process to improve the public health care system. There’s no doubt the structural change proposed by the committee is needed. There’s also no doubt that the finance and health ministries are committed to it.

But there is a doubt about whether the next health minister will push forward a reform named after his predecessor. From this perspective, German’s untimely departure from the ministry is a missed opportunity.

An even worse missed opportunity is that of Education Minister Shay Piron, a man completely devoted to ethics and education. You can criticize his management skills; he did little to streamline the Education Ministry. But you can’t criticize the purity of his motives or his efforts, which could have been interpreted as political suicide.

Two such acts are diverting budgets from strong students to weak ones (in short, taking from Jews and giving to Arabs) and integrating the core curriculum into the ultra-Orthodox school system. Piron made the decision on the differential budgets, but got stuck on the core-curriculum issue. If the next governing coalition includes the ultra-Orthdodox, we’ve missed another chance to improve the Haredi education system.

It’s not certain whether Piron and German will be ministers in the next government, and that’s a shame. Gilad Erdan is expected to remain a minister, and that’s a good thing. Erdan deserves credit for dismantling the ministry he headed (Home Front Defense) after concluding that it couldn’t fulfill its purpose.

He deserves credit for the reform of the postal service, the reform of the Israel Broadcasting Authority, the reform of the landline telephone market and the attempt to break up Channel 2’s monopoly. Even though Moshe Kahlon got all the credit as the previous communications minister, Erdan outdid him.

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