Israel’s two top fiscal officers were at loggerheads this week over an economic program to curb soaring unemployment, which could lead to the mass departures of new immigrants.
Finance Minister Yitzhak Moda’i retorted angrily Wednesday to criticism from Michael Bruno, governor of the Bank of Israel, that he had failed to implement his own economic program.
In a report released by the central bank Tuesday, Bruno predicted that nearly 400,000 Israelis would soon be jobless and that some 200,000 recent immigrants would leave unless drastic economic measures were swiftly taken.
Moda’i called Bruno’s comments “a storm in a teacup” that paints the situation darker than it is and sows more doubts among the people.
But it was seen in other circles as a warning of an impending catastrophe in the absorption of Soviet olim.
Michael Kleiner, chairman of the Knesset’s Absorption Committee, charged that the government has not yet created a single job for the 40,000 recent immigrants who are unemployed.
Uri Gordon, chairman of the Jewish Agency’s Immigration and Absorption Department, said new taxes are unavoidable if the government is to create jobs for immigrants.
“But the public does not trust such a move, because it believes the new taxes will go to the politicians,” he said.
David Mena, director general of the Employment Service, said much of the problem stems from a lack of coordination among the various economic ministries.
“One ministry proposes a plan, then comes another ministry which negates it, and eventually there is no overall plan,” Mena said.
Attempts to get an economic recovery plan through the Knesset last September failed completely.
Moda’i is working on a new plan, which calls for the investment of billions of dollars over the next four years in infrastructure, such as new roads and railroads. But it is not clear how many jobs would be created or where the huge investment would come from.
Bruno, meanwhile, has urged a lower minimum wage and abolition of cost-of-living allowances as first steps toward economic solvency. But these are politically unpalatable measures.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
