"A whole economic fabric faces collapse"

Missile hits northern Israel credit: social media screenshot under copyright clause 27A
Missile hits northern Israel credit: social media screenshot under copyright clause 27A

Four prominent figures in the economy of northern Israel discuss the area's problems - and solutions - as the war continues.

Eight and a half months have gone by since the attack of October 7, and the outcome of the war is unknown. Tens of thousands of residents of the north of Israel have been evacuated from their homes in the face of cross-border fire from Hezbollah in Lebanon, and many businesses are battling for their lives. What can help them to get through the crisis? Four leading figures in the economic life of the north met on a panel moderated by ‘Globes" news editor Bar Lavi, part of the "Talking North" conference held by "Globes" and Bank Leumi. They met in Rosh Pina, at the Edmond Hotel, which these days mainly accommodates evacuees from Kiryat Shemona, and tried collectively to formulate an answer to the question of what the residents of the north need and what could extricate them from the crisis.

Dubi Amiti, president of the Histadrut (General Federation of Labor in Israel) business division and a resident of Metula, believes that the answer lies in Jerusalem. "When I look at the many people who are fighting and showing the strength that there is in the Galilee, in the communal, economic, and security aspects, each according to what he or she can give, I can only salute them. Eight months of coping with war. It’s not skirmishing and it’s not defense. It’s real war, day in day out," he said. "If I look with my civilian hat on as president of the business division at the exceptional strengths of businesses in the Galilee - working under fire, under threat, bringing workers back to the companies, to the factories - really there are no words to describe it. To wake up in the morning as a CEO or chairperson and say ‘We’re carrying on, we’re fighting,’ that’s something astonishing."

On the other hand, Amiti asserted, "Jerusalem isn’t with us. Why are you letting us cope alone? You should be our backing, to strengthen us." He was talking about the wait for a plan for rehabilitating the north, and the amounts allocated to it. The current budget, he said, meant that NIS 20,000 per person was allocated to the north, while NIS 400,000 per person was allocated to the south. "When I see a budget of NIS 3.5 billion for the north and NIS 18 billion for the south, and divide it by the number of residents, I ask, Why? Are we two countries? We are the front." He made clear that made clear that he wasn’t prepared even to imagine the atrocity of October 7 happening in the north, but also that the physical and psychological damage was huge. "Jerusalem, we’re here," he said.

Asked by Bar Lavi what concrete steps the government ought to take, he responded: "To sow the seeds of growth. To build the infrastructure all over the Galilee, and to provide the tools so that we’ll be ready with a quick jump to embark on growth." He said that the Ministry of Finance had now, for the first time, agreed to compensate businesses to the tune of NIS 2.4 billion, and that this money, which had begun to flow, was a beginning. "In the Covid pandemic, the recovery multiplier was amazing," he said, referring to the period after the third wave of the pandemic. He said that a work plan should be prepared now, for all areas.

Inbar Bezek, CEO of the Upper Galilee Economic Corporation, said that not a single household in the region had not been impacted by the situation. "There is no family that hasn’t undergone disruption, even at the level of personal safety, and alongside that there’s a challenge of economic security, and that’s an event in itself." She pointed out that houses had been commandeered for reservists, that everyone was affected by anxiety, and "Many families are coping with economic anxieties, because of the decline in income. In the Galilee, because of the distance from the center, the labor market is different. There are almost no public sector jobs. There are no government ministries here." Most employees in the region, she said, fall into one of four categories: "Industry, which is the largest employer, tourism, agriculture, and construction, and these are the sectors hardest hit by the war."

Bezek pointed out that there was a nationwide crisis in agriculture because foreign workers had left the country, and those remaining would not go to the north, which is under fire. "There are fields that can’t be reached to cultivate them," she said, stressing that the damage was not just in the present, but in the future as well. "A tree not picked now won’t bear fruit later. Whole trees will have to be uprooted."

"As far as tourism is concerned," she continued, "the Ministry of Finance and the government set a very arbitrary compensation policy. They decided that the confrontation line was up to nine kilometers from the border, and anyone beyond that has received no compensation since January 2024. A restaurant in Rosh Pina is as valuable as a restaurant in Tel Aviv. Four million Israeli tourists pass along this route. 60,000 residents have been evacuated. The whole tourism industry is simply not functioning. We go to discussions, we plead. Where have we not been? The Finance Committee, the Economic Affairs Committee. It’s now June, and we have been without income since January."

The distortion applies to the employees as well, she said in response to a question from Lavi. "At present, an employee who is evacuated is entitled to extended unpaid leave automatically, but someone who has not been evacuated isn’t." The upshot of not receiving unpaid leave benefit, she said, is that employees won’t return, even after the war is over. She stressed that even if security was restored, it was not certain that the economy would hold up. "For every tourism business that fails, many businesses around it also fail. There’s a whole economic fabric here. If you don’t save it and ensure that businesses will survive, there will be a complete economic collapse."

"What keeps me going is the people"

Moshe Marie, CEO of Teva Naot Footwear, which has factories in Kibbutz Dafna and Kibbutz Neot Mordechai in the northern Galilee, talked about how the events of the war had affected him. "October 7 caught us all in a way hard to describe in words; dismay, pain. We stopped for a few days, but the message was very clear: we carry on, even if the pace is different, because better days will come," he said. All the same, he related how the firing started to come from the north, and events took over. The workers were scattered to all ends of the country, and it became necessary to work out how to organize. "People who work in a factory can’t work remotely. We tried to shorten and compress many operations, we managed to transfer operations from Dafna and Tel Hai and work mainly at Neot Mordechai," but there too, he pointed out, sirens are a daily occurrence.

Marie related how he personally took care of procuring prefabricated shelters, in an environment without reinforced rooms, and distributing them in the area of the factory to create a sense of security. He said that what kept him going was the people. "Simply amazing people, who turn up day after day, do their work, keep fighting. And I say, we’re here, and that’s also the message. It’s tough, but we’re not moving anywhere else."

Haim Feiglin, CEO of construction company Zemach Hammerman, and vice president of the Israel Builders Association, has deep roots in Metula. His great grandfather was one of the founders of the city 135 years ago. One of his sons was chairperson of the local committee for many years, and he recalled spending much of his childhood there.

"It’s something ingrained in our family history," Feiglin said. "We’re building here, in Karmiel, in the north-western corner of Nahariya, and in Kiryat Shemona too we’re promoting a large urban renewal project. We haven’t stopped working in the Galilee for a single day. The Galilee is an inseparable part of the State of Israel, and that has to be reasserted. I’m not sure that in Jerusalem they see the Galilee as an inseparable part of the State of Israel."

Feiglin believes that the key is more residents. If another million and a half to two million people live in the Galilee, he says, everything will change. "Gush Dan sustained thousand of missiles, and no-one thought of evacuating them," he said. "If there were a million and a half residents in the Galilee, they probably wouldn’t think to evacuate it, and the strategy and tactics would be much more aggressive and much less tolerant of missile salvoes. But that hasn’t happened. I hope that it will happen in the next generation and in the coming years." Feiglin imagines a metropolitan city at Golani Junction or the Kinneret.

Despite everything, he said, demand for real estate had not declined. "While we have been sitting here, two UAVs have fallen not far away, at Ayelet Hashahar. A short while ago, one fell at Achziv. And while we have been talking - within the past hour - a home was sold at Achziv. We have been selling well in Achziv throughout the past few months. That means that the public is optimistic, voting with its feet, and wants to live in these enchanting areas. And we’re with the public; just don’t let them hinder us."

The conference was held in conjunction with Bank Leumi.

Published by Globes, Israel business news - en.globes.co.il - on June 25, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Missile hits northern Israel credit: social media screenshot under copyright clause 27A
Missile hits northern Israel credit: social media screenshot under copyright clause 27A
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