The Sinking Israeli Economy

It is a basic fact of life that no society can have both guns and butter, and Israel is no exception. Its economy is sinking under the weight of its military might and murder of the Palestinians, all at the expense of the Israeli workingclass, as usual.

The World Socialist Website has another outstanding analysis on the Israeli economy, dated August 7, 2002, in an article by Chris Marsden, entitled:
"Israel: Austerity budget makes workers pay for cost of Sharon’s war"

Pertinent paragraphs as to the economy (there is also much on the political ramifications, so please read the article):
"The Sharon government last week approved 2003 budget proposals that include cuts totalling NIS 8.7 billion (five NIS to one US$). But the budget is so potentially destabilising that all seven Labour Party ministers, as well as the five ministers from the ultra-Orthodox Shas, voted against, leaving the government with just 14 votes in favour and 12 against."

"The austerity measures constitute Israel’s biggest ever budget cut. They are aimed at making the most impoverished and vulnerable sections of the Israeli working class—the unemployed and single-parent families—pay for the state’s economic crisis, one made worse by the ongoing military offensive against the Palestinians which has brought investment and tourism almost to a halt."

"Next year’s budget will deny payments to many of the 150,000-plus recipients of National Insurance (NI) benefit, which is presently available to those deemed physically unable to work, earning less than the minimum wage of NIS 3,000 a month, or who have been unemployed for over six months and are no longer entitled to unemployment benefit. The government wants to cut out NI benefits received by many poor families, half of which are single-parent families. One out of ten families will lose the benefit entirely. The rest will lose about NIS 700 a month. Alimony paid by the National Insurance Institute to more than 10,000 women will be either cut or eliminated."

"Sharon’s budget proposals are aimed at driving Israeli workers into poor paid jobs, through the removal of benefits and the dismantling of the welfare state. The measures have been accompanied by a series of anti-immigrant measures, aimed at driving out foreign workers who have long provided Israel with cheap labour."

"The Histadrut has announced a one-day warning strike next week, as part of an ongoing campaign against the austerity plan. Again the move is the minimum response to Sharon’s attacks. The labour federation has been subject to sustained criticism by various organisations for its silence in face of the planned attacks on welfare rights."

"The head of the Histadrut’s Trade Union Division, Shlomi Shani, expressed opposition to the government’s refusal to resume cost-of-living allowances despite rising inflation, and the refusal to complete wage negotiations for 1999-2001 and 2002-2003."