Prof. Omer Moav, at the Israel Democracy Institute's Caesarea Forum: "When imports are stopped, not only is the welfare of the consumers harmed – so is export because there is a firm tie between the two. The perception that import must be blocked in order to encourage export is not empirically founded. Today, we must develop a perception different from the way we saw thing is the fifties. The true challenge facing the Israeli market is the damage caused by the depreciation of the Dollar and other currencies, as opposed to the Shekel, which makes it difficult for exporters to maintain profitability. When this issue comes up, we often hear demands from industrialists for the state to regulate trade conditions. One must keep in mind that subsidized exports mean that the Israeli tax-payer is subsidizing the European or American consumer. There is no hocus-pocus in economics, buying dollars in order to increase their value is just the same as subsidizing exports – it's pointless, it's just folly. When the Dollar was high they could take it. The new situation should be seen as a challenge. The bottom line is that exports should not be subsidized, and no intervention should be made in the foreign exchange, but taxes should be lowered.
Moav added that: "From the work I've done, I've discovered that the educated professionals are the ones to leave the country. We can see the segmentation according to profession – doctors and professors, as well as engineers and high-tech workers – where the emigration level is the highest.”
On the topic of the extent of taxation in Israel, Moav said: "When you take a look at total direct taxes, the extent is low and dropping. Likewise, taxation of the highest deciles is higher than that of lower deciles – and the price is eventually paid by industrialists.
"The current government is relatively weak and increasing the budget without setting clear goals – you don't know where that money will go, not necessarily towards roads and trains, more towards sectorial payments."