Opinion

Israel Election 2019: Bibi's Got the Power, but Mr. Economy Has Become Mr. Legal Woes

It will take the kind of leadership Netanyahu hasn’t shown in years to deal with the economic challenges posed by the Haredim and Israeli Arabs

Sara Netanyahu, left, and Benjamin Netanyahu
Tomer Appelbaum

He is corrupt, he is vain and he is prepared to do almost anything to stay in power, but the fact is, Israeli voters decided to ignore all those things. Tuesday’s election brought not so much a victory for the religious-right, which didn’t do particularly well, as for Benjamin Netanyahu the man.

Naftali Bennett and Ayelet Shaked, not to mention Moshe Feiglin, flamed out (subject to the final count) and the successor Habayit Hayehudi sank from eight Knesset seats to five. Netanyahu’s Likud, on the other hand, captured five more seats than it had in 2015, despite robust opposition from Benny Gantz and Kahol Lavan, an impending indictment, and reports of new dubious Netanyahu business dealings.

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The result is that Netanyahu will be forming his fifth coalition with an unexpectedly strong hand. He won’t have Bennett and Shaked breathing down his neck from the right or have to deal with the maniacal Moshe Feiglin. Bibi can be Bibi more than he has in the past few years.

That fond hope could explain why the Tel Aviv Stock Exchange rose so strongly the day after the vote even though investors aren’t among the prime minister’s biggest fans.

What that will mean politically is difficult to say at this stage. No doubt there will be deals to ensure Netanyahu is saved from indictment. There could be deals with his coalition partners that could yield troubling outcomes, like annexation of some West Bank settlements.

But, now that the worst political pressure is off, there’s a good chance we’ll see less incitement and divisiveness than we’ve seen from him lately. Netanyahu is a man of the right, but a man of the pragmatic right who likes to deal with strategic issues. Name-calling and culture wars come out of his toolbox when the situation demands it, but they go back in when he no longer needs them.

How might Netanyahu use his enhanced power vis a vis the economy?

Over the last decade, he has ceded everything to his various finance ministers, letting them stumble (as with Yair Lapid’s zero-value-added tax for the housing market) and succeed (as with Moshe Kahlon’s banking reforms and aid to middle class families).

Through it all, Israel was thriving and Netanyahu was getting credit for it, so why should he interfere?  Australia, the lucky country, has enjoyed a 28-year run of non-stop growth, a fete that few economies can boast. But Israel is almost as lucky: The first quarter of 2019 marked our 16th consecutive year of economic growth.

But Israel has serious problems that haven’t been addressed and that could the opportunity for the “strategic” Netanyahu to come to the fore and put his petty politicking aside.

Being Bibi

The next government faces fiscal crisis. The budget deficit is growing quickly even before a host of big spending commitments kick in that will make the problem even bigger. Tackling it will require unpopular decisions like raising taxes and/or cutting spending that will take the kind of leadership that a finance minister alone doesn’t have. A Teflon prime minister like Netanyahu, on the other hand, could pull it off -- if he is prepared to do it.

Then there’s the Haredi draft law, which was left unlegislated when elections were called last December.

The debate over the draft law is usually framed in terms of fairness, i.e., why should young Haredi men not serve in the army when the rest of the country does? But the real issue is economic. The growing population of Haredim presents a dire, long-term challenge to the Israeli economy, which can’t afford such a large part of the population shunning work and relying on the government’s largesse.

However, Netanyahu has ignored the threat in favor of short-term politics by making deals with the Haredi parties in exchange for their acquiescence to stay within the coalition, not only to forestall their men from being drafted, but also to prevent the imposition of secular subjects relate to job skills, such as English and math, in ultra-Orthodox school curricula.

The result has been a dangerous decline in Haredi employment that has to be reversed.

Army service would be one way to do that. It is a segue from the world of the yeshiva and joblessness into the world where men acquire a secular education and job skills and would go a long way to solving the problem.

The other challenge is Israeli Arabs, who need to be fully integrated into the economy no less than the Haredim. They are an even larger share of Israel’s population, but are poorer, less educated and less likely to hold a job, which makes them a drag on the economy.

The strategic Netanyahu briefly surfaced in 2015 when the cabinet approved a 15-billion shekel ($4.2 billion) five-year plan for economic development in the Arab sector.

But far more often, Netanyahu has let his short-term political calculations get the better of him. He has allowed incitement against the Arab minority, and even participated in it.

The Haredim are almost certainly going to be in the next government, but a strategic Netanyahu could drive a harder bargain -- perhaps even recruit the Labor Party into the coalition to counterbalance them. Without almost any political cost at all, Bibi could draw red lines for his party and coalition partners on anti-Arab incitement. He could promote the integration of Israeli Arabs into the workforce and advance in society more effectively.

Bibi has a strong hand, but he may not play it. There are too many distressing signs that he has become stuck in the paranoia and petty politics characterizing his last years, especially as he fights off the threat of a criminal indictment. The idea of him becoming a real leader just may not be possible any longer, and we will all pay the price.