Lili Itamari, 63, and Ram Itamari from Kibbutz Kfar Aza were killed in a deadly Israeli infiltration by Hamas militants from the Gaza Strip in Kibbutz Ruhama in southern Israel on October 29. Mourners lay flowers at the funeral of Mr. (56 years old). , 2023.
Ronen Zvrun | Reuters
As the war with Hamas approaches its fourth week, hundreds of influential Israeli economists have warned the government that it must urgently make major economic changes, including restarting the country’s budget. are doing.
A letter released Monday by the Israel Economist Forum calls on Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich to “wake up and begin responding to the severe challenges facing Israel’s economy.”
The war with Hamas has forced more than 200,000 Israelis, mostly from the south, to relocate. This is a major cost that has not been taken into account in recent government budgets. Meanwhile, economists are calling on Israel to make an unprecedented move to restart its 2024 budget, which was passed in May after a bitter political battle.
“If the budget includes expenditures that are not related to the war or the necessary reconstruction, it needs to be reconsidered,” said Itai Ater of Tel Aviv University’s Koller School of Management, who heads the Israel Economists Forum.
Then there are the costs of the war itself, including the 360,000 reservists called into service, representing more than 10% of Israel’s workforce. Fighting, labor shortages, and national mood have shut down large parts of the country’s economy.
The letter also states that “Israel has suffered a severe blow and requires a fundamental change in national priorities and a major shift in funding to address the extensive war damage, the need for victim assistance, and the rebuilding of Israel’s economy.” There is a need for reallocation.”
Fighting has now begun head-on in Gaza, with Israel attacking from land, air and sea. It began on October 7, after the deadliest terrorist attack in Israel’s history, when Hamas militants broke through the barrier in southern Israel, killing 1,400 people and taking more than 200 hostages.
Since then, Israel has also come under fire, albeit to a lesser extent, on its northern borders with both Lebanon and Syria.
What is the goal of the forum?
Aerial photo showing damage caused by a large-scale invasion by Hamas militants from the Gaza Strip in Kibbutz Beeri, southern Israel, on October 11, 2023.
Ilan Rosenberg | Reuters
The forum of 300 economists was set up in January this year to warn the government of the potentially dire economic impact. Prime Minister Netanyahu’s promotion of judicial reform. This polarized political struggle subsided, giving way to a devastating and costly war that most Israelis never imagined.
The forum’s letter continued: “Significant changes to the current budget fall short of what is needed to address a crisis of this scale. The government must face these challenges as soon as possible and restore public confidence. must be done.” In the ability to do so. ”
Although not mentioned in the letter, Ater said a good start would be to reduce the amount of money given to ultra-Orthodox Jews in what he called “non-core education.”
Funding for ultra-Orthodox or Haredi schools in Israel has always been a subject of debate, as the population plays a huge role in Israel’s government. Ultra-Orthodox parties often rely heavily on strengthening and forming coalition governments in the Knesset. Politicians to gain their support Recently, Prime Minister Netanyahuhas been accused of catering to ultra-Orthodox parties. Generous government support for schools.
Arter said the Economist Forum is calling for the absolute minimum measures needed at this stage to prevent the economy from falling into the abyss. He worries that more will be needed if the war escalates.
The Ministry of Finance has not yet responded to this letter.
