hello from 2011

 Hello from 2011

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Since February 1, the prices of gasoline, electricity and groceries have risen, causing another media storm and a reminder of the 2011 social protests. Journalists can be understood: «crown» goes off the agenda, new cataclysms are not yet expected, and the high cost of life – a topic that invariably evokes a warm response from readers. But that's not the only reason for the sudden frenzy of comparing yesterday's and today's price tags.

It is true that our life is really objectively expensive, and the epidemic has only worsened the situation. In a country like Israel, life simply cannot be cheap. We do not have outstanding natural resources, the land is infertile, there is not enough water, for political reasons, the possibilities of foreign trade are limited. We incur huge expenditures on defense and security, we accept and integrate repatriates, we maintain a large stratum of the disabled population (the elderly and children make up almost 50% of all Israeli citizens). Hence the inevitable high taxes, inflation and rising prices.

Let's add here the costs of the “crown” for the treatment of patients and vaccination of the entire population, the damage done to productivity and logistics. Let's remember the world economic crisis, which nevertheless touched Israel, energy price fluctuations, climatic disasters, political upheavals… According to the Food and Agriculture Organization of the United Nations (FAO), the world food price index rose by 33% over the year. In short, we are all in the same boat today.

So does it make sense to set up camps again and demand immediate action from the government? Are there any subjective factors in Israeli high prices that can be eliminated and make our economy more “human”? face?

Yes, there are. For example, Israel's tax system is imperfect and can be adjusted, but resources are limited. Taxes – it is the lifeblood of the economy, and if you lower taxation in one area, it will have to be raised in another. There is a lot of talk about reducing the VAT on food, but this step, according to the most rough estimates, will cost the treasury billions of shekels, which will have to be taken from somewhere. From defense? From education? From pensions and benefits?

Bureaucracy – the scourge of our society, however, in order to send home an inefficient army of officials, it is necessary to completely rebuild the entire system of government, and this is not a matter of one day. In addition, the treasury will not be able to cope with the simultaneous payment of such a large amount of unemployment benefits and compensation.

In terms of serious and actionable reforms, the government has long been pushing the draft Agricultural Adjustment Law with its import reform to open up the Israeli food market. In addition, there was a proposal to reduce the requirements for kosher imported products, which will certainly affect retail prices. A very effective measure – limit the right of trade unions to strike sanctions. Unlike artificial price cuts and tax cuts, these steps can lead to significant changes in the entire economic structure and, as a result, make life cheaper.

But the current protesters do not need it.

The expansion of imports does not suit Israeli farmers, who are afraid of competition from products from abroad and are unhappy with the proposed monetary compensation. The Chief Rabbinate does not agree with the reduction of the extensive staff of inspectors who travel around the world at public expense, assuring the kosher products. And of course, the Histadrut is furious that they want to deprive him of the right to paralyze the country and blackmail the government at any moment.

There are still many influential individuals, groups, firms, organizations that do not want any reforms in the economy at all. They are quite satisfied with the current situation with its inflation and rise in prices, and even if they are not satisfied, they are even more afraid of changes. They are simply taking advantage of the government's momentum and weakness to get what they want: increased compensation, public funding, and the rejection of drastic measures that hurt their interests. Rising prices – only an excuse to put pressure on the government, which, alas, cannot resist this pressure.

Perhaps our ministers sincerely would like to lower customs duties, achieve really working competition, and limit the economic power of monopolies. But this is hard and painstaking work, designed for more than one year, and most importantly – such reforms do not give an immediate effect of reducing the cost and improving life, and the pressure of social protest requires this effect here and now.

A strong, cohesive government could take all the necessary steps and find the right words to explain to the people how they work and what they are for. But this is not our case. In our coalition there is no agreement on almost anything, including economic issues. The left-wing parties do not want to lose the support of trade unions and farmers, the right-wing parties, by inertia, gravitate toward an alliance with big capital, and it seems that things will now be where they have always been. The government demonstrates its weakness and uncertainty at every step, and this weakness is exploited by all those who are afraid of losing their privileges in the current economic system. Demanding immediate change in the economy for the benefit of poor citizens – shameful speculation on the real problems of people, and the true purpose of this speculation – avoid these changes at all costs. If anyone doubts this, try to remember what exactly the “revolution of 2011” brought us, except for the rise of several parties that successfully used the social agenda.

rise in prices, the more likely it is not to reform the economy, but to engage in political maneuvering that will allow it to stay at the helm. You can count on a temporary reduction in the prices of basic foodstuffs, like hello from 2011. But our life will continue to rise in price, leaving the interested parties the opportunity for future manipulations.

Author: Irina Petrova

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