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Reforming Israel

- Abstract

As they observed the massive economic protests that convulsed Israel this summer, Americans and Europeans had reason to wonder why Israelis would have cause to complain about their economic situation. Israel’s economy grew by 5.6 percent last year, and the Bank of Israel is predicting 4.8 percent growth this year. Unemployment fell to 5.7 percent in May, its lowest level in 27 years. With much of the West still suffering from anemic growth and high unemployment, Israel’s situation seems enviable by comparison.

Yet hiding behind these impressive macroeconomic statistics are significant domestic problems, problems that successive Israeli governments, preoccupied as they have been with the peace process and its attendant terrorism, simply ignored for the better part of two decades. These problems ignited the protests. And while many of the solutions proposed by the protesters would make things worse, their success in finally moving these issues to the top of the national agenda has provided a welcome impetus for genuine reform. As such, the protests pose both risk and opportunity. If the government simply capitulates to protesters’ demands, Israel’s economy will suffer. But if it seizes the chance to enact the reforms that Israel really needs, Israel will be a better place to live in—and the protests will have been a triumph.

About the Author

Evelyn Gordon is a journalist living in Israel. Her article “The Deadly Price of Pursuing Peace” ran in the December 2010 issue.