Israel faces major hurdles to economic recovery amid COVID-19 pandemic

Israeli Pm

by Keren Setton

Israel is facing obstacles to economic recovery amid the COVID-19 pandemic because of a lack of a clear and consistent plan, which has stirred criticism from the public, analysts said.

For two weekends in a row, thousands of Israelis have taken to the streets to protest the government’s slow response to the economic fallout amid the COVID-19 crisis.

“Israel has gone through enormous political instability in recent years,” said Eyal Winter, a professor of economics from the Hebrew University of Jerusalem.

“The consequence is that many of the current economic policies are populist,” Winter noted.

The Israeli government has already approved a series of measures intended to help the staggering economy, while imposing renewed restrictions against a resurgence of coronavirus infections.

However, the renewed lockdown measures, imposed soon after they had been lifted, have left many businesses unable to recover from the blow.

The tourism, culture and aviation sectors have been hit particularly hard, as they face an unclear post-pandemic future.

So far, the government has pledged about 30 billion U.S. dollars in various schemes to help the staggering economy.

Last week, Netanyahu announced a government handout to all Israelis, regardless of their financial situation. The plan has been modified to exclude the richer members of society.

However, it was still widely criticized. Some thought that money should be given only to those in dire need and others said Netanyahu was trying to pacify the increasingly dissatisfied public.

In addition, the unemployment rate in the country has been sky-rocketing to around 20 percent already, compared with a rate of fewer than four percent before the outbreak in March.

“It is a real catastrophe,” said Elise Brezis, head of the Aharon Meir Center for Banking and Economic Policy at Bar-Ilan University. “We have no economist with a clear plan.”

In May, a new Israeli government was formed. After over a year of political paralysis, Israeli Prime Minister Benjamin Netanyahu forged a partnership with his political rival Benny Gantz, head of the Blue and White party.

However, the two often find themselves at odds on almost every policy. When the cabinet convened last week to decide on renewed restrictions, only one of the many proposed measures was agreed by all.

Netanyahu and other ministers have said they want to appoint a leader of the COVID-19 response effort on both health and economic fronts, which has not happened yet, apparently because of differences between the political partners.

So far, more than 400 Israelis have died of the COVID-19, with around 28,000 active cases. Enditem

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