Fischer: Standard of living here 33% lower than US

Stanley Fischer: Prices are too high, and social gaps are widening, but the situation in the US is not too different.

Governor of the Bank of Israel Prof. Stanley Fischer said today that "Prices in Israel are high," and that the standard of living, "is not the same as in the US, but about two-thirds as high."

In his speech this morning at the Conference on Corporate Governance, Family Firms, and Economic Concentration, at the Hebrew University of Jerusalem, Fischer said, "The Israeli economy is open, but there are aspects that are closed. It is very hard to find inexpensive cheese. Our real income is high, but our standard of living is not the same as in the US. There is a feeling that this is a result of over-concentration, but it is also connected to agriculture that is not over-concentrated, but that does benefit from much protection."

On over-concentration, he said that the problem is not characteristic of Israel alone, but rather of many countries around the world, and that Israel is similar to Singapore on this issue. He quoted an article he read in 2005 that claims that outside the US and the UK, there are large corporations controlled by powerful families that are making realistic and financial investments.

"This is the situation in Israel as well," Fischer said. Fischer added that the over-concentration problems Israeli is facing exist in other countries as well: "Israel is between Belgium and Hong Kong, just below Singapore. This is not an unusual situation, but that does not mean that it is the desired one. Even if you are like all the rest, that doesn't mean that you shouldn't aspire to be better."

In his opening statement, Fischer said that since he began his current position as Governor of the Bank of Israel, he has not had even one moment to rest. He joked and said, "At least it is never boring here." Fischer continued, "There is a feeling that prices are too high, and this is connected to concerns that social gaps in Israel are widening, although the situation in the US is not too different."

Published by Globes [online], Israel business news - www.globes-online.com - on December 18, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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