Mixing oil and water and calling it champagne

Dr. Norman Bailey

Israel's new so-called unity government is an obscenely expensive monster inadequate to deal with the challenges it faces.

Well, it appears that Israel will have a government finally after months and months of shoddy political maneuvering. That is the good news--all of it. The bad news is that this "coalition" government is a hunchbacked, three-legged monster. Furthermore, it is a monstrously expensive monster. Indeed, it is obscenely expensive at a time when a very large percentage of the population of Israel is hurting financially because of the measures taken to deal with the coronavirus epidemic.

Leaving aside the question of whether the measures were necessary and desirable or not, they have resulted in great damage to the economy, including plunging GDP figures and soaring unemployment figures and budget deficits.

The epidemic, combined with the collapse of gas prices, is dealing heavy body-blows to the Israeli economy. The gas bonanza is, at least for the time being, gone due to the collapse of oil and gas prices. Tax receipts will decline sharply. Expenses are soaring, and as a result, what was at the beginning of the year an economy and a financial situation in excellent shape will be substantially crippled.

At the same time that all of this is going on, the political class in Israel is busily engaged in dividing up the (diminishing) spoils. Instead of taking a cut in salaries, as is the entire government of New Zealand from the prime minister on down, the politicians here are happily feathering their nests at the unconscionable expense of society.

In addition, the government has absolutely no ideological coherence, combining right, left and center elements in a noxious witches' brew.

Nor does it seem to have any very clear idea of what it wants to do about the many issues with which it will be confronted over the next few months

The concentration of attention on the epidemic has meant insufficient attention being paid to other, very important issues, including the oil and gas crisis already mentioned. Others include the collateral damage that will undoubtedly be caused if Likud is able to push through the annexation of parts of the West Bank. This includes a nightmarish security situation for the security forces, reversing the progress made recently in relations with various Arab states, a recrudescence of terrorism from the areas still under the control of the Palestinian Authority as well as Gaza and potential policy clashes with the Trump administration and the possible future control in the US of both the presidency and the Congress by the Democrats.

Also going largely unnoticed is the fact that during the corona crisis, Iran tested a ballistic missile, and will be released this coming fall from any restraints on its development of nuclear weapons.

Would that be enough, along with a severely deteriorated economic/financial situation, to confront a strong, unified government?

Yes.

Will this jerry-built "coalition" be able to confront them?

Not likely. Look for lots and lots of instability ahead.

Norman A. Bailey, Ph.D., is Professor of Economics and National Security, The National Security Studies Center, University of Haifa, and Adjunct Professor of Economic Statecraft, The Institute of World Politics, Washington DC. He was formerly with the US National Security Council and the Office of the Director of National Intelligence.

Published by Globes, Israel business news - en.globes.co.il - on May 7, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

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