Behind the Headlines the Other Face of Israel
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Behind the Headlines the Other Face of Israel

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Israel’s economy is an equal opportunity victimizer. All segments of the population — workers and businessmen, moshavim and kibbutzim, and the young and the old, especially those living on pensions and fixed incomes — are adversely affected.

People are bewildered not only by the devaluation of the Shekel but by its daily fluctuation. In a period of two weeks this month, the Shekel went from 771 to the Dollar to 792. No one knows from one day to the next what the prices of commodities will be — except that it will in all probability be higher.

Every morning and every afternoon people line up in front of banks to get the latest Shekel readings. It’s unnerving for Israeli consumers but a paradise for tourists. Merchants and tourists are both armed with pocket calculators to translate prices of goods into the tourists’ home currency. Many shops and hotels will offer a 10 percent discount and elimination of the 15 percent value added tax if the consumer pays in foreign currency.

Dollars are being horded by Israelis and kept in safe places in the home or in bank safe deposit boxes. A case in point: some safe deposit boxes were recently broken into in a Jerusalem bank and the owners declined to come forward to identify the contents. The assumption was that the boxes contained undeclaned dollars.


To cushion the debilitating effect of the Shekel devaluation and fluctuation, Israelis have developed bleak jokes. One is: Israel no longer needs the law of gravity. It’s been replaced by the law of the Shekel. Everything falls within its vicinity. Another joke: If the shaky position of the Shekel continues, it is going to be renamed the Shokel. And, a variation of an oldie but a goodie: In America, money talks. In Israel, all the Shekel says is goodbye.

The economic “balagan” (total chaos) has been attributed to the peace with Egypt, which cost Israel at least $5 billion, not including the oil lost in the Sinai; the war in Lebanon at an estimated cost of $3.5 billion; defense outlays; repayment of foreign debts, and a general mismanagement of the economy over a period of years.

Israelis tend to react to these explanations very much like the poor Jews in the shtetl who had become accustomed to receive a weekly stipend of five groshen from a local wealthy Jew. One week the stipend was reduced to two groshen. “Why?” asked the poor Jew. “Because I had a bad week,” the wealthy one responded. “You had a bad week, so I have to suffer,” the poor Jew complained.


But jokes aside, the economy — with unbridled inflation at 800 percent and seven percent unemployment at this time — next to the war in Lebanon, is an explosive issue for the government. In fact, when Premier Shimon Peres and Defense Minister Yitzhak Rabin addressed meetings of the United Jewish Appeal Ambassadors’ Mission they stressed this is the most crucial task Israel has to deal with.

In February, for example, the consumer price index rose by 13.5 percent. It was the first double-dig-it inflation figure since November. Retail prices in January had climbed by 5.3 percent. The Histadrut is seeking a cost of living increment of about 14 percent. But by the time this increment is implemented, some 10 percent of it will have been eroded.


One segment of the population most seriously affected by the economic turmoil are the old who live on fixed incomes and pensions. For these people, writes D’vora Ben Shaul in The Jerusalem Post, “life is a never-ending struggle for survival. The hand-to-mouth existence forced upon this sector of the economy deprives its members not only of peace of mind but even of the basic essentials of proper diet as well as adequate heat in the winter months …. For many of these pensioners the dream of the golden years has turned into a nightmare of deprivation.”

Some 300,000 people receive old-age pensions from the National Insurance Institute. Half of them are living below the Institute’s official poverty line. While about half of those receiving old-age benefits from the Institute have official supplementary incomes in the form of jobs, private pension funds from their former jobs or taxable dividends, “the other half eke out a living on pensions of less than $120 a month for a single person and $190 for a couple,” Ben Shaul writes.

In several neighbor hoods in Jerusalem, some of the old people gather quietly on the eve of the Sabbath to receive some meat, fish, fruits and vegetables from the managers of the supermarkets. Their dignity doesn’t permit them to ask for food; they stand by inconspicuously and wait for the managers to motion to them to pick out what they need.

Unemployment is on the rise. Employment in industries oriented toward the domestic market has come to a near stand-still. There are some jobs available in research and development and in export-oriented industries. Gad Yaacobi, minister of economics and planning, said recently that this trend is expected to continue. “I have little faith that work openings will be created soon in any great number in any other sector than export-oriented industries,” he stated.

Earlier this month Labor Minister Moshe Katsav complained bitterly about the jobless situation. “Not only is the commitment the government undertook for full employment not being carried out, but no body has even been formed to create employment or to prevent unemployment,” he wrote in a letter to Premier Shimon Peres.


Coping with unemployment is exhausting and frustrating. But some jobless find ingenious and inventive ways to deal with the situation. In Jerusalem, two women have founded the Jerusalem Bartering Club where members can swap their unwanted possessions for goods and services they would otherwise have to buy.

According to the co-founders of the club, Rhoda Elovitz and Theresa Terry, “In the beginning, before Shekels, there was bartering. Early man traded furs for weapons and food. We feel the Israeli economy has come full circle and it’s time again to reinstitute this primitive, yet efficient, system.” The club, they point out, was founded as a mutual support group to help those struggling to make ends meet.

Merchants are also affected by the gyrations of the economy. While many of them are enjoying brisk business, as consumers, on a spending spree, are buying household and luxury items now as a hedge against price hikes later, they are also being hit by spiralling municipal rates.

In Haifa, for example, private businesses, factories and shops staged a one-day close-down protest against increases in municipal rates. A week earlier, the City Council approved rate increases of 600 to 900 percent above last April’s assessments.

Haifa’s Chamber of Commerce Secretary Arieh Mehoulal charged that the increases, slated to take effect next month, would make the city a more expensive place to live and to run a commercial enterprise than Jerusalem or Tel Aviv. He said that some small and medium-sized businesses would be paying more in municipal rates next month than in taxes.


The moshavim, which have been suffering economic hardships for some years, are facing more problems. Hundreds of Galilee moshavim members blocked the road between Safad and Moshav Meron and dumped thousands of eggs on the highway on March 10. Police used force to break up the demonstration which moshav movement leaders said was part of a campaign to force the government to give aid to needy settlements.

The protestors, including hundreds of moshav children, chanted slogans, including, “Bread and work” and “The Katyushas have not made us leave the northern border, but the subsidies will.” According to Rahamim Yakuti, secretary of the Galilee moshavim, changes in recent years in the poultry industry, with the emphasis turning from raising chickens for meat to raising them as egg producers, has caused serious financial problems for the farmers.

There is now a surplus of 40 million eggs and there is no way moshav farmers could raise prices, he said. Subsidy money has not been forwarded to the producers for four months and some 25 moshavim are now in the red by a total of $10 million, he added. Other demonstrations are being planned by moshavim members.


And while economic concerns were high on the agendas of Israelis, many took time out to participate in or wonder about the wedding of the decade. Some 2,000 guests, many uninvited, attended the wedding of Uri Zohar’s son to the daughter of Arik Einstein. Zohar produced and directed a trilogy of films in the 1960’s celebrating the sabra, and Einstein starred in all his movies.

Robert Rosenberg, reviewing this spectacular in The Jerusalem Post, wrote; “The two fathers symbolized back in the sixties, an irreverent yet somehow idealistic Israel. This marriage … symbolized Israel of the 1980’s, asking itself questions and finding answers in religion.” Zohar, who had been part of the swinging Tel Aviv crowd in the 1960’s turned to religion in the mid-’70’s and persuaded Einstein’s wife to turn away from the world of the Dizengoff cafes.

The day after the wedding there were reports in the newspapers about thousands of children wandering through the streets of Haifa searching in vain for the city’s traditional Purim parade. They couldn’t find it because it was cancelled as a budget-cutting measure.

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