UK consultancy firm Oxford Analytica criticizes the Ministry of Finance economic plan, claiming its sole beneficiaries will be the wealthy, while the middle class will be its biggest victim.
Oxford Analytica is one of the world’s most prestigious consultancy firms, with an extensive international network that draws on the scholarship and expertise of over 1,000 senior members at Oxford and other leading universities around the world. The firm has 20,000 clients, including governments, the World Bank, IMF, the European Bank of Reconstruction and Development, NATO, and the UN.
Oxford Analytica states the plan aims at strengthening the economic situation of the middle class by lowering the cost of credit, in order to increase tax revenues. However, in the short term, the middle class will bear the brunt of the plan, while the main beneficiaries will be the wealthiest, whose tax margins will be substantially cut.
“Therefore, the plan’s success depends on the willingness of the wealthy to use the extra money in their pockets to invest in local businesses that will create jobs,” states the report.
Minister of Finance Benjamin Netanyahu predicts that the plan’s implementation will generate 2% growth in 2004. However, Oxford Analytica is unsure that this target is achievable. Oxford Analytica states that the plan contains few growth encouragement and infrastructure investment items. The budget cuts will change national economic priorities only slightly.
Oxford Analytica states that the anticipated rise in unemployment, and forecast of 50,000 jobs lost this year, “are bad news for those hoping that consumer spending, which usually constitutes 40% of GDP, will revive the economy.”
Published by Globes [online] - www.globes.co.il - on April 1, 2003