Economy & Social Welfare

Over the past number of years, both Labor and Likud-led governments have practiced a moderate economic policy, gradually moving towards a free market economy. Privatization of state-owned businesses was common the 1990's and continued under the Likud governments of Ariel Sharon.

The agents driving the changes in Israel's economy were the meltdown of old socialist methodology and institutions, high immigration rates, rapid globalization and the spread of technology. Pragmatic as ever, most Israelis aren't bothered by the incongruity of kibbutz-initiated deals which turn pioneer-plowed fields into shopping malls replete with massive parking lots. The new free market economy is, however, raising the attention of the religious parties who are vexed by the opening of businesses and shopping malls on Shabbat, challenging the long-held religious status quo.

There are economic holdovers from the "old days" however. Labor chairman Amir Peretz, holds a more socialist economic worldview and many worry that, if elected, he would undo some of the economic progress made over the last decade. A more beneficial holdover is Israel's socialized health care system that provides care at a reasonable cost to the entire nation.

Unfortunately, the high-tech and tourist industry crashes have led to increased unemployment, which thankfully has slowly improved over the past year or two. Some of the basket of social services typically provided by the government have been cut back as part of Bibi Netanyahu's economic programs enacted during his term as Finance minister, this is one of the major issues that brought Peretz to power as the Labor Party chairman.

When Peretz was first elected, many hailed his ascension to party leader as a step toward addressing Israel's economic issues. Political analysts from across the spectrum began to posit that issues other than defense and security would play a leading role in the upcoming elections for the first time. However, as the campaign has progressed and issues like Hamas and Iranian nuclear threats have come to the fore, economic and social issues have once again taken a back seat to individual and communal security.