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Do Israelis Want an American-style Finance Minister?

Hagai Amit
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Nir Barkat at the Likud event on the first Election Night of the year in April 2019.
Nir Barkat at the Likud event on the first Election Night of the year in April 2019.Credit: Tomer Appelbaum
Hagai Amit

Election polls publicized Monday continued to show an inconsistent picture. One poll indicated that Prime Minister Benjamin Netanyahu’s Likud party was slightly closing its gap with rival Kahol Lavan, which is currently the largest party in the Knesset.

Another survey predicted that Kahol Lavan was increasing its lead over Likud. It’s likely that some Likud officials were disappointed by these results. Over the past few weeks, Likud MK Nir Barkat has been presenting Netanyahu with polls indicating that should Likud present an up-to-date economic plan, and declare Barkat as its candidate for Israel’s next finance minister, the party would receive another six Knesset seats, three at Kahol Lavan’s expense.

Haaretz Weekly Ep. 63

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To Barkat’s credit, Likud presented Israelis with its first economic plan whatsoever in a decade. Barkat also achieved his goal of being named the candidate for one of Israel’s three most important ministries.

Barkat has infinite ambition and deep pockets; he is currently Israel’s wealthiest politician. He paved his way to the peak of Israeli politics the American way. He has a big campaign office that is unlikely to be rivaled by any other Knesset members, and his team includes political strategist Eyal Arad, campaign manager Avi Lerner, and strategy bureau head Moti Sharf, alongside other advisers. He presented his economic plan at a festive event at the Tel Aviv Stock Exchange this week. It is based on thorough economic work that was prepared a year ago by internationally renowned economist Harvard University Prof. Michael Porter.

About a million dollars was invested in the research, the polls and preparation of the plan. Barkat says he raised that money from two main donors after ending his term as Jerusalem’s mayor, and before entering national politics. However, the State Comptroller’s system for reporting political donations contains reports of only 300,000 shekels in donations, provided by Barkat himself at the beginning of 2019.

Barkat works closely with the Kohelet Policy Forum, the end recipient of the $1 million in funds. Kohelet is a think tank with a right-wing, conservative economic worldview. It was responsible for paying Porter and top-ranking U.S. pollsters – with whom Netanyahu has also worked – to figure out what issues concern Israeli voters. Barkat himself flew to the United States in April while the Knesset was voting to disband itself in order to help draft the survey wording and the plan.

The massive sum sunk into Porter’s plan and Kohelet cannot be dismissed. The plan itself spans 145 pages and is titled “Let’s Grow Israel.” Porter developed the Five Forces model designed to chart the operations of a commercial business in a competitive environment.

Accordingly, Porter addresses Israel in the business terms of a firm that needs to improve its placement in a competitive world. The plan recommends investing some 1.5 billion shekels in outlying parts of the country over five years, contains a thorough analysis of the Israeli economy’s strengths and weaknesses, and breaks the country down into geographic regions with a discussion of what each one’s strengths, branding, and business direction should be.

And yet, when you read all 145 pages, it turns out that they don’t address many issues that Barkat would have to deal with if he ever serves as finance minister. It has no mention of Barkat’s stance on labor relations, or mandatory arbitration before crucial industries are given permission to go on strike. It says nothing about raising or cutting corporate taxes, income tax or VAT. It also says nothing about how welfare funds should be divided.

These issues are not addressed, even though they relate to every aspect of Porter’s plan. For example, the plan warns of a crisis brought on by a population boom in 2048, at which point Israel is forecast to have 17 million residents. As a solution, it proposes better distributing Israel’s population so that the greater Tel Aviv region isn’t the only main metropolis. It doesn’t address whether Israel should stop encouraging its citizens to have children via the current policy of government stipends, or address high population density as an approach gaining popularity in the world due to the need to preserve open spaces.

Nothing like Kahlon

When Netanyahu and Barkat held a press conference on Thursday, Netanyahu noted that he was the one who asked that Barkat draft an economic plan, stating, “The people of Israel need to choose between an entrepreneurial economy and a wheeler-dealer economy.” Barkat himself said that the people need to choose between “a prime minister with me at his side as finance minister, or [Kahol Lavan’s] Benny Gantz and [former Histadrut labor federation leader Avi] Nissenkorn, who comes from the world of Histadrut clerks.” He said that food in Israel is 30% more expensive than OECD prices and that he would work to lower tariffs and import quotas. He declared that he would break down monopolies and address economic concentration, which reduces competition. He promised to disband the Israel Lands Authority, start a system of differential funding for local authorities, and subsidize farmers’ inputs while lowering the quotas protecting them.

It’s very questionable whether Barkat will manage to do all this. Netanyahu’s pre-election promises are worth very little. Yet, if Barkat is the next finance minister, he’ll be the exact opposite of his predecessor, Finance Minister Moshe Kahlon. Kahlon took up the job to be a socially- minded finance minster who protects weaker population groups; Barkat is a billionaire who believes in a right-wing, economically liberal, American-style agenda.

Netanyahu and Barkat’s speech included a declaration that the self-employed would be granted the social benefits currently available only to salaried employees. For advocates of the self-employed, this was funny – granting them the sick days, unemployment benefits and work injury payments that salaried workers receive would cost billions every year. The move seemed similar to Netanyahu’s declaration a week earlier that Sofia Nahon, an activist for the self-employed, would be his personal advisor on small businesses.

Nahon was instructed not to speak to the media, but TheMarker was told that while she was presented as his special advisor, in practice she was just head of Likud’s faction for the self-employed.

It’s not just a matter of semantics. The personal advisor declaration is designed to make it look like Netanyahu is putting the self-employed at the top of his agenda when in fact a faction head is really just an integral part of an election campaign. Likud has faction heads focused on getting votes from the LGBT community and from women too. This is just another reminder that we can’t treat declarations made two weeks before elections as anything more than election spin.

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