Israel’s economy is in its worse shape in decades. In fact, the Israeli Central Bureau of Statistics recently determined that Israel is experiencing its worst economic slowdown since the establishment of the Jewish state, in 1948.
However, the Israeli voter, who headed for the polls Tuesday, January 28, hardly let this economic downturn take precedence over security concerns.
Considering there is no great variance in the economic positions held by the leading parties—Likud and Labor—it is no surprise that a recent survey revealed that only 14 percent of respondents placed economic and social issues as their top concern.
Most believe that economic prosperity and internal security are two sides of the same coin. Economic recovery, they say could only take place on the heels of a significant reduction in violence in the region. The country’s economic prospects are therefore bleak.
As the current Palestinian Intifada enters its third year, both local and foreign investors who follow events with alarm are pulling their money out. The tourism industry lost a whopping 80 percent since the beginning of the Intifada in September 2000, and the once booming high-tech sector has been devastated.
With over 50,000 small businesses shut down in 2002 and an additional 60,000 expected to close this year, unemployment in Israel has peaked at 10.4 percent. The state-owned power utility, Israel Electric Corporation, had its debt downgraded earlier this month two notches by international rating agency Moody's.
It is currently estimated that 1.2 million people, 20 percent of the Israeli population, now live in poverty. This places Israel’s second only to the United States, among developed countries, in terms of socio-economic disparities.
At the same time, the nation’s Gross Domestic Product (GDP) shrunk to one percent in 2002, having already contracted 0.9 percent the previous year. In the first half of 2002, the local shekel currency lost 14 percent against the dollar. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
