PM Office Removes Reforms From the National Agenda

Program for the years 2008-2010 reveals new economic goals: Slash poverty, raise employment

The Prime Minister's Office today presented its "Socio-Economic Agenda for Israel, for the years 2008-2010". It is indeed one of the most ambitious economic programs presented in Israel for years, and can be boiled down to two goals: reducing poverty, and increasing employment.

To achieve those aims, the program sets two entirely new goals for government policy, alongside the usual ones of reducing the deficit, and keeping inflation within the range of price stability.

The first goal is to reduce the incidence of poverty to from 20.2% of Israel's households today, to 17.2% by 2010. Meeting the goal will require the government to reduce the incidence of poverty by 1% a year overt three years, lifting 60,000 families over the poverty line.

The second goal is to increase employment among adults, aged 25-64, from 68% today to 71% by 2010. Again, that will require increasing employment by 1% a year, adding 92,000 to the national workforce.

All Israel's economic policy tools will be aimed towards achieving those two goals.

But that means that they'll be diverted from other previously stated, goals, which drop from the top of the agenda to limbo. For instance, structural reforms.

Prof. Manuel Trachtenberg, head of the National Economy Council, admits that means that structural reforms - which had topped the agenda for the last 20 years - have lost importance. In fact, they may grind to a halt entirely.

"After 20 years of astonishing structural reforms that changed the face of Israel's economy, making it more efficient and stimulating growth, it's time to take a break from reforms, or we will lose the focus of the war to achieve the two main goals," Trachtenberg says.

The program lists the steps to achieve the two goals. The state, for instance, will encourage technological innovation in the traditional industries, via the Ministry of Industry and Trade.