at the 15th Caesarea Forum
June 28th, 2007
Translation
28/06/2007
This gathering of the Caesarea Forum, here in Haifa – in a demonstration of identification with the north, and as a salute to the impressive and moving resilience of this entire region during the Second Lebanon War – is the best proof that this forum is not cut off from what occurs in Israel.
Even when it outlines the macro view of Israel’s economy, it does so not only with a clear and investigatory point of view, but also with an attentive and caring heart. I appreciate this very much and thank you for your decision to gather in Haifa.
I wish to say a few words regarding the stability of Israeli society. Clearly, economic stability is not a goal unto itself, but rather a component in the building up of national strength, which will secure that which is truly important – the future of the people of Israel in its land. National strength has several components, and one of the most important is the robustness of our society.
Israeli society is very heterogenic. It comprises native-born Israelis and new immigrants from over 100 countries and 100 different cultures; it comprises Jews and Arabs, and among the Arabs are Christians and Muslims, while among the Jews there are Haredi and secular; there are poor people and rich; residents of the center of the country and those who live in the periphery.
An infinite number of dividing lines intersect the population here in Israel into publics and sectors, which together form the mosaic of Israeli society. All these dividing lines supposedly threaten its cohesion, the feeling of basic togetherness and partnership. One cannot speak of true cohesiveness between the extremely rich and the disadvantaged poor. This is why the issue of poverty in Israeli society is so worrying, but even more worrying is the dimensions of inequality. According to the Gini Index, our country has more inequality than any Western country: 0.39 compared to an average of 0.31 in developed countries who are members of the OECD.
Therefore, this Government has declared a campaign to reduce poverty, and announced steps designated to deal with some of the more difficult ills of Israeli society at the root.
The National Economic Council, headed by Prof. Manuel Trajtenberg, together with the Ministry of Finance, the Bank of Israel and other government offices, has already formulated a socio-economic agenda for 2008 through 2010, titled “Reducing Poverty While Encouraging Growth”. For the first time, the plan includes socio-economic goals, which will be combined with the existing macro-economic goals – the inflation target and the target deficit.
The first goal is reducing the incidence of poverty to 17.2% from 20.2% by 2010. This is an average annual decrease of 1% in the poverty rate over the years 2008-2010. Meeting this goal will raise 60,000 families above the poverty line, i.e. approximately 242,000 people, of which 115,000 are children. This will return the rate of poverty to the same level it was a decade ago.
The second goal is increasing the rate of employment of people aged 25 to 64 to 71% by the end of 2010, compared with the current rate of 68%. This is an average annual increase of 1% in the rate of employment over the years 2008-2010. Meeting this goal means that over 92,000 new employees between the ages of 25 and 64 will join the work force, and raise the rate of employment in Israel to the average level in developed countries around the world. This will add 1.3%-2% to the GDP (which is NIS 8-12 billion), and lead to a significant increase in the State’s income, as well as a savings in allowance payments.
To achieve these goals, a variety of economic and social steps will be taken, including:
- Encouraging productivity and innovation in traditional industries and services.
- Treating centers of poverty in two more affected sectors of Israeli society – the minority sector and the Haredi sector. The