Netanyahu-Ben Gvir government may bring Israel economic sanctions

On Tuesday, voters turned out in record numbers in order to have their say in the democratic process, resulting in the election of a government led by former Prime Minister Benjamin Netanyahu and including outspoken political extremist Itamar Ben-Gvir, if its campaign promises are fulfilled, could radically impact the nation’s economy.

The economy that Netanyahu government stands to inherit is actually doing pretty well, compared to other developed countries. Israel currently boasts the second-lowest inflation rate in the OECD and one of its highest growth rates. As such, the country’s incoming leaders will have more economic degrees of freedom than other nations may have.

With that in mind, “The promises made by these parties are such that they can very quickly lead Israel down the rabbit-hole,” said Prof. Dan Ben-David, Head of Shoresh Institution for Socioeconomic Research and an economist at Tel-Aviv University. According to him, the threat posed to Israel’s economic well-being by the nation’s new leadership is both present and substantial.

“In terms of straightforward economics, they are promising tons of money to various sectors. Netanyahu has promised free education from the age of zero, he talked about freezing interest rates and arnona (municipal tax payments), he promised to give full funding to all of the Haredi schools,” Ben-David said. “That’s going to cost a lot of money, not to mention the fact that it’s completely going to mortgage Israel’s future.”

Basic economics aside, there is a critical political factor in play. If Ben-Gvir’s Otzma Yehudit Party manages to reform the country’s judicial and political systems as it intends to do, it could lead to severe ramifications on the world stage.

“Those actions can basically bring down the developed world’s wrath on us,” Ben-David warned. “When you have Jewish supremacists in leading political cabinet positions, what does that say about Israel’s ability to defend itself against accusations of apartheid elsewhere? All you need to do is look at what happened in South Africa to get a glimpse of the kind of economic sanctions that we may get hit with if this government follows through with even a part of the things that they promised to do.”

A sufficient amount of serious economic turmoil from mishandling or severe sanctions could in turn lead to the evacuation of Israel’s largest economic contributors, Ben-David warned.

“It could happen way before the international community wakes up. The entire hi-tech industry, all of the physicians and the entire senior faculty in all of the research universities in Israel make up less than 4% of the population,” he said. “If a critical mass of the young, educated and skilled people in Israel reach the conclusion that it’s game over and leave in the next few years, then the game ends a lot quicker than it would have otherwise.”

It is still uncertain which of the many promises made by the entering parties will come to fruition, but if Israel’s new leadership doesn’t tread carefully, those who put them there could be in for even more change than they asked for.

 

Israel Elections: President Rivlin to pick new coalition head with care

Learning from the past experiences, this time, President Reuven Rivlin intends to use all the time at his disposal to appoint a candidate to build a new governing coalition. It was told by President's Residence Director General, Harel Tuvi to The Jerusalem Post in an interview on Sunday. 

Tuesday's election results will be formally presented to Rivlin by the Head of the Central Elections Committee, Supreme Court Judge Uzi Vogelman on 31st March 2021, after counting around 600,000 double ballots of emissaries, soldiers, prisoners, those quarantined and sick from COVID-19 and those returning from abroad on Election Day and voting at Ben-Gurion International Airport. 

"No action will be taken until the results will be clear, official and final," Tuvi said.

Rivlin will then begin consultations with faction representatives to hear their recommendations about who should form the next government. 

The deadline for Rivlin to give his 28-day mandate to build a coalition is 7th April 2021. Sources close to him said that unlike after other elections when he expedited the process, this time, he will take his time to help facilitate it better. 

"After the first couple of elections, he didn't wait for the final results because the public interest was to end uncertainty as soon as possible," Tuvi said.

"This time, there are double envelopes and other complications from corona, so the president said he would not start the consultations until we really know the official results," he said.

"This time he will also encourage the parties to talk among themselves first and let the situation settle."

The first candidate who receives a mandate to form a government can ask for a two-week extension. If there is a second candidate, he received no more than four weeks.

Rivlin's term is set to end on 9th July 2021. It is possible a new president-elect could be chosen by the Knesset while a second candidate has the mandate. But Tuvi said Rivlin's decisions and timetable will not be impacted by the race for his successor.

Tuvi denied reports that Rivlin would not consider giving the mandate to Prime Minister Benjamin Netanyahu due to Netanyahu's criminal indictments.  

"The president will be guided by the decision of the nation," Tuvi said.

"He has wide considerations and can choose among many options but he cannot go against a clear decision by the nation."

Israeli Prime Minister promises direct flights to Saudi Arabia

Israeli Prime, Minister Benjamin Netanyahu promised to launch direct flights to Saudi Arabia if he is victorious in Tuesday’s elections. “I’m going to bring you direct flights from Tel Aviv to Mecca,” Netanyahu said in an interview with Channel 13 on Saturday night. 

Speculation had always been high in the last year of the Trump administration that such ties would come to fruition under the rubric of the Abraham Accords, in which Israel established normalized relations with four Arab states.

But normalized ties with Saudi Arabia never materialized. Saudi Arabia has granted Israel flyover rights, something it had denied to the Jewish state in the past.

In his Channel 13 interview, Netanyahu touted those four agreements and promised that four more deals would be finalized. It was a pledge that he made last week as well.

He brushed aside criticism with respect to the failed and ultimately canceled meeting with the Crown Prince of Abu Dhabi Mohammed bin Zayed Al Nahyan.

Netanyahu had been scheduled to fly to the United Arab Emirates for the meeting, but first it was canceled because of a diplomatic snafu with Jordan. As a result of the fiasco, Amman would not let an Emirati plane leave Amman for Tel Aviv to collect Netanyahu for the visit.

The UAE rejected an attempt to reschedule the visit, explaining that they did not want to be part of Netanyahu’s reelection campaign.

When pressed by Hasson about whether ties with the UAE were problematic, Netanyahu said, “Our relations with the UAE are very strong” and pointed to the UAE pledge to invest NIS 40 billion in Israel.

Netanyahu in his Channel 13 interview also touted his close ties with both US President Joe Biden, who he has known for over three decades, and Russian President Vladimir Putin.

The relationship with Putin, he said, was particularly important when it came to ensuring Israel Air Force’s ability to operate aerially in Syria, so that it could attack Iranian-related targets and prevent Tehran from entrenching itself in that country.

When asked about the impact of the US-Russian tensions on his relations with both countries, he said that he knew how to stay the course in both cases.