Slowdown Nation

Instead of charging ahead on the back of transient success stories and lucky undersea finds, it's time Israel sat down for a deep and difficult public debate.

What story would you like to hear this morning? About projections that Israeli waters may have six more fields of gas as big as Leviathan? About Israel's brisk fourth-quarter growth? Another startup sold for millions to an American giant? Or would you like a story about corruption, monopolies trampling the consumer, a tale about the circus of lobbyists parading into the Knesset?

There are any number of stories about the deals of yesteryear and the discoveries expected on the morrow. What most have in common is a short shelf life and an insignificance to either society or the economy over the long term.

The huge fuss made over nonevents, often shallow and colored by politics, hides certain long-term trends, some of which are good but most of which are bad.

The good news is that Israel has much potential still to realize. The bad news is that the way things are going, Israeli society and the economy face terrible dangers which could materialize in five, 10 or 20 years.

We need to look in the mirror, but what we see won't be pretty. It's so much nicer to bask in stories about startups being sold, how well the Israeli economy weathered the global economic crisis and other tales of success. They are important. They are inspiring.

The story of the wrong path taken

But there is another story, one about Israel traveling an unsustainable path in many social, demographic and economic arenas.

The country's public sector is not effective. The business sector's competitive edge is dulling. In a number of years our story isn't going to be the beautiful one we like to tell ourselves.

Sure, there are stories worse than ours. Italy is more corrupt, the social gaps in the United States are wider, Mexico's education system is worse.

But that's cold comfort, as no other country in the world faces threats like Israel. Israel's economy and society need to stay at the forefront. We have no other choice.

At this point of the debate, one usually starts casting blame, be it at politicians, paper-pushers, prime ministers or parliamentarians.

That's all good and well. But we also need to ask why they behave the way they do. What are the environmental conditions, the ecosystem - the cultural conditions in which they operate? Why do they fixate on the short term, on survival, on pubic relations, on spin, instead of on the job at hand? Why do they not study issues in depth and set long-term goals? Why doesn't the public sector attract the best and brightest?

What is our role, as readers, citizens, taxpayers? At least those of us with free time and the desire to think these things over - what influence could we have?

Do we judge and reward the decision-makers based on long-term plans - or by frothy, empty statements and meaningless short-term achievements? Do we applaud the makers of ambitious long-term plans, who progress toward the goal slowly but steadily?

Planning instead of forecasting

Are we even prepared to be part of an economic debate critical to Israel's future? Or would we rather stay with the present level of debate, dealing with our own affairs and leaving the "important" things to our leaders - who in the same breath we accuse of doing nothing?

The solutions to most of Israel's fundamental problems, economic and social, are long and difficult. It isn't "what should be done" - the changes needed in many areas are pretty clear. The difficulty lies in "how." It requires commitment, consensus, planning, patience, daring and courage.

Plans abound, initiatives and investments teem. The challenge is focusing on processes and structures, on effectiveness, on building a coalition for change to measure progress.

Long-term planning isn't the same thing as "predicting." Forecasts aren't necessary, and they're impossible to get right, anyway. Long-term planning means making changes in how state systems are designed, to make them more effective. For more on that, see page B2.

For change to happen, we may need a new sort of public debate. The entire public needs to be a partner to change. The politicians and officials need to feel that the public is taking their measure according to their achievement in instituting real change over the long-term, not spikes of achievement or fiery rhetoric.

Naturally, debate about long-term changes is abstract and difficult. It's so much easier to settle for catchy slogans such as "invest in infrastructure, education and high-tech" and so on. But Israel needs long-term planning. It needs long-term processes and for these to happen, it needs a new public debate that delves into the depths.

The first step is to look within, critically: at the press, at the leaders, at all the players in the public arena, and at the public debate. Is our behavior creating environmental conditions that support change, or that sustain the status-quo?

Of course, some like the status quo. It serves them well. Yet none of us should accept it, because Israel is traveling a dangerous road.

And when the crisis arrives, be it in five, 10 or 20 years, the richest won't escape unscathed either.

Two years ago, an international team of people from government, business and the public published a report on the 13 countries that achieved the fastest economic growth over very long periods of time.

Each country on that list had unique characteristics, but they had a common denominator: It was deliberate.

The great economic success stories in the last 50 years happened in countries that adopted courageous, committed, long-term macroeconomic policies, not countries that happened across fields of gas or other natural resources. China, Hong Kong, Singapore, Thailand, Malta, South Korea, Japan, Indonesia, Ireland, India, Brazil - nowhere was their surge happenstance. It originated in long-term planning by pragmatic, patient politicians.

Israel has been celebrating its strength in the face of global crisis, which has exacted such a heavy price from the United States and a bunch of European countries. We tell ourselves about our might, cleverness and flexibility of the Israeli economy.

It's a lovely story. Some of it is accurate enough. But its just part of the story.

Israel has maintained conservative fiscal management in the last five years, partly as a response to our own macroeconomic crisis in 2001-2003, when the intifada hit just as the dot com bubble imploded. We were in better condition when the global economic crisis hit. Our banks weren't up to their necks in subprime debt. Our real estate sector wasn't overly leveraged.

But while our profit and loss statement looks good from a global comparative perspective, our inequality at home is a gaping maw (see page B3 ). Our infrastructure is backward, our public sector is fossilized and its management is poor, the business sector - which developed dramatically from 1995 to 2005 - has screeched to a halt and the capital market suffers from grave structural defects.

Leviathan won't teach our children

The large field of gas found off Israel's shore, called Leviathan, and others that may be found will not cure Israel's fundamental ills. They will not cause structural reforms. They will not make the public sector more efficient. They will not improve our children's education. They will not allocate resources more efficiently. They will not boost our competitiveness.

Leviathan and its maritime ilk may even cause the opposite. Cheap money poured into giant inefficient systems won't create sustained prosperity and equality.

Many argue that another type of politician will arise, some superstar who will change governance in Israel, make the public sector more efficient and plan for the long term.

We could continue to wait and hope that when he or they come, it won't be too late.

Or we could take another approach. We could stop casting our eyes to the skies and call for a "leader" to come along and rescue us. We could use our minds to untangle our environment, our ecosystem, and use public debate, for which we all bear responsibility, each and every one of us, to quit rewarding the wrong figures for the wrong things.

Can we take responsibility, personal and shared, or - 62 years after the establishment of the State of Israel - are we still some startup struggling to survive and waking up each morning in expectation of collapse, or sale to an American company?

There are people who are worried about the social and economic paths Israel is traveling. They want to make change. But to achieve that, they need a supportive environment. We at TheMarker want to be part of that. We believe that if all the media - Yedioth Ahronoth, Maariv, Israel Hayom, Calcalist, Globes, Channel 2, Channel 1, the Israel Broadcasting Authority, and every other media outlet wants to, they too could create a new public debate.

Our platform, at the 2021 Conference, is open to one and all. The path is unmarked and the challenges are legion. But we believe, and the hundreds of people with whom we have consulted in recent years believe, that a new public debate is the right direction.