Rosh HaShana 5764 (September 2003)
The following is a snapshot of Israel as the country celebrates Rosh HaShana 5764, the Jewish New Year in September 2003.
The Palestinian violence that started in September 2000, has had a devastating effect on Israel's economy, costing approximately $11 billion to date. The war with the Palestinians has required massive increases in defense spending, has scared away international investors and tourists, and has discouraged Israelis from spending nights out on the town.
Even before the Palestinian violence began, Israel fared poorly in the worldwide recession due to its reliance on hi-tech industries. In addition, the Israeli economy was distorted by an increasing number of full-time studying, not working, ultra-orthodox Jews supported by the state, as well as by large tax incentives for those living in West Bank and Gaza settlements.
Harsh realities in Israel today include:
- The Central
Bureau of Statistics’ annual report indicated that on the eve of the
Jewish New Year, Israel's population was above 6.6 million people. The country's
Arab population grew by 3.4 percent while the Jewish population rose by 1.4
percent. The report also revealed that Israel was now as crowded as India
with about 300 people per square kilometer.
- The average
gross salary in Israel in January 2002 was NIS 7,000 ($1591). In June 2003,
it was down to NIS 6,936 ($1576). One quarter of all salaried workers (629,000)
earn less than NIS 3,500 ($795) per month.
- Unemployment
is more than 10% with over 300,000 looking for work.
- 210,000 elderly
people (every third elderly person) are living in conditions of such poverty
that they don't have enough money to buy needed medications.
- There has been
a 16% decline in building starts of apartments in the first half of 2003.
- During
the past 8 months of 2003, the state's income from taxes has decreased by
6.2%.
- The number
of people who will be eligible to receive disability payments will be reduced
so that only those with 60% disability and higher will continue to receive
them. Others will have their payments cut by 10% every year.
- A study conducted by the Brookdale Institute, in conjunction with the Ministry of Health and the Israel Center for Disease Control, found that approximately 450,000 households have severe difficulties in meeting their most basic needs.
In response to the state of the Israeli economy, Finance Minister Binyamin Netanyahu presented a proposed budget draft for 2004 which includes a wide range of multi-year structural reforms and new economic dictates.
The Treasury budget proposal includes a NIS 10 billion ($2.3 billion) cut in government spending via the following cut-backs.
- About 6,000
IDF civilian employees, career soldiers and officers will be fired –
including 2 generals, 12 brigadier generals, 46 colonels and 240 lieutenant
colonels. Bases will be closed. The development of new weaponry will be postponed.
The result of these military spending cuts should be about NIS 15 billion
($3.4 billion) by 2008. These are the largest cuts the IDF has experienced
in its 55 year history.
- The spending
of each government ministry will be cut by 11–15%, resulting in a savings
of NIS 2.4 billion off state expenditures.
- Approximately
1,500 civil servants will be laid off. Interior Ministry districts will be
consolidated. Organizations such as the Public Works Department will be dissolved.
No new government workers will be hired during the coming year.
- The price of
water will go up by 15% for private homes and industry
- V.A.T. will
remain fixed at 18% instead of going back to 17% as had been promised.
- The fees for
higher education will decrease by 10% instead of 14%, as had been promised.
- Released soldiers'
grants will be reduced by 10%.
- Discounts on
municipal taxes for the elderly will be curtailed.
- Health basket
services will be cutback.
- Conditions for
receiving unemployment benefits will become more stringent.
- Tax exemptions
for people going on early retirement will be cancelled.
- The retirement
age for women and men will go up to 67 from 60 and 65 respectively.
- The number of Israel's missions abroad will be reduced.
Yaron Ezrahi, a left-leaning Israeli academic, said: "Israel has the potential to be another Singapore if, firstly, there is an end to violence and, secondly, a wise economic policy."
This Rosh HaShana, Israelis will be praying for, among other things, a more prosperous year.
Sources:
JAFI - Update on the Social and
Economic Crisis in Israel
The Guardian - Israeli
economy buckling from cost of war
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