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January 3, 2016

Israelis set to return Sharon

Israeli Prime Minister Ariel Sharon seeks re election next Tuesday with his country’s economy in a dismal plight.

The Palestinian conflict has pushed tourism down to one fifth of its 1999 pre intifada peak and the key high tech sector is down 25 per cent, largely due to the international information technology downturn. Unemployment and inflation are running high, while falling tax revenues have left the government struggling to manage a runaway budget deficit.

One in five Israelis now lives in poverty as negative growth is predicted for the third year running while the shekel has lost more than 4 per cent in recent weeks.

A political economist at Israel’s Ben Gurion University, Dan Filc, says Mr Sharon owes his strange immunity to the public’s reaction to more than two years of Palestinian suicide bombings.

“To many people this election is a matter of survival,
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“It doesn’t matter that there is now no real threat to the physical existence of Israel . ,
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cards for humanity. people feel that their personal security is at risk.”

An aggressive military leader, Mr Sharon has seen his personal popularity soar recently despite widespread public belief that his military based policy is unlikely to bring peace with the Palestinians any time soon.

In contrast, his main opponent, Labour’s Amram Mitzna, is calling for a unilateral Israeli withdrawal from most of the occupied Arab territories a policy that polls suggest the majority of Israelis would support. Mr Mitzna’s problem is that few believe he is tough enough to deal with the Palestinians.

With defence spending running at more than 10 per cent of gross domestic product,
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“I think there is some sort of chain of reason that goes like this,” he says. “The economic problem is because of the security issue, and the security issue is Arafat’s fault . . . and the best guy to deal with Arafat is Sharon.”

A second reason for the lack of economic debate, he says, is that both Labour and Likud are essentially agreed on “neo liberal” economic policies. “If there’s no real alternative there’s no real difference so the economy becomes a non issue,” he says.

Bank Leumi’s Gil Bufman says the economy must be at the top of the agenda of the next government, with inflation, interest and government debt needing to be brought back into line.

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