By RON FRIEDMAN
The businessman and philanthropist shares his views on the economy at the Industry, Trade and Labor Ministry conference.
The Industry, Trade and Labor Ministry held its first annual socioeconomic conference at the Avenue Convention Center near Ben-Gurion Airport yesterday.
In a special interview for the purpose of the conference, international businessman and leading philanthropist Warren Buffett shared with the participants his views on the global economy and the role governments play in maintaining prosperous economies.
Speaking about his decision to invest in Israel, Buffett said that what drew him to Israel was its brainpower.
“If you’re going to the Middle East to look for oil, you can skip Israel. If you’re looking for brains, look no further.
Israel has shown that it has a disproportionate amount of brains and energy,” Buffett said.
The conference featured speeches and panel discussions by economic and government leaders, all revolving around Israel’s current economic situation and its social implications.
In addition to Buffett, the 500 participants heard speeches by 10 cabinet ministers, the head of the opposition, the chairman of the Histadrut Labor Federation, the president of the manufacturers association, former finance ministers and Industry, Trade and Labor Ministry officials. Everyone who took to the stage paid tribute to the host, Industry, Trade and Labor Minister Binyamin (Fuad) Ben-Eliezer, and commented on his ability to bring people together.
Ben-Eliezer started the day off by welcoming the participants and setting the stage for the following discussions by raising the dichotomy his ministry entails – on the one hand looking after the interests of industry and trade and on the other protecting the interests of workers and consumers.
“Many people think that there is a conflict of interests; I believe the opposite. The interests are not opposing – they are complimentary,” said Ben Eliezer. “The strength and uniqueness of the ministry is in its ability to look broadly and comprehensively and look after the different interest by providing balanced solutions. It is a difficult task, but I believe that only by doing so can we effectively lead the Israeli market towards its goals in the upcoming years.
“A developed market entails a delicate, but stable balance between a safe and fair job market and a flexible and dynamic business market,” Ben Eliezer continued. “In order for Israel to be part of the family of developed countries, it must protect both elements at the same time.”
Deputy Prime Minister and Minister in Charge of Negev and Galilee Development, Silvan Shalom, himself a former minister of finance, spoke about the need for Israel to shift its national priorities from focusing on defense to focusing on social problems.
“We currently possess a developed and growing economy.
We want to maintain the growth, but also make sure we are living in a just society. In order for everyone to enjoy the fruits of the growth, we need to see a change in the agenda,” Shalom said.
“When the Prime Minister spends 90 percent of his time dealing with security and diplomacy and nine percent is spent dealing with political survival, it is obvious that the pressing social issues are not at the center.”
According to Shalom, the budget is split incorrectly and funding for security “always comes at the expense of health, education and development.”
He added, “If we don’t leave here thinking of shifting to a civilian society, this will be nothing but another conference and nothing will change.”
One topic that came up continuously throughout the day was the issue of Israel’s enormous financial gaps and particularly the way they relate to two segments of the population, Haredi Jews and Arab Israelis. The state’s treatment of these two groups, which are Israel’s poorest, was the focus of a ministers’ panel, featuring Education Minister Gideon Saar, Welfare Minister Yitzhak Herzog, Minority Affairs minister Avishai Braverman, Housing Minister Ariel Atias and Ben Eliezer.
“In Israel we like talking about the poor, but we don’t like the poor themselves,” Herzog said. “A country that wants to take on the issue of a 20% poverty rate must take actions.”
Addressing the issue of low haredi participation in the job market, Atias, who represents Shas in the government, said that in order to go out and work, the haredim need incentives. Atias rejected out of hand the suggestion that reducing government aid might motivate people to seek employment.
“The Haredi population is one with unique characteristics.
They don’t need to be educated or lectured to, they need to be given tools. When given the right incentives they will go to work,” he said. “Haredim won’t work for any ordinary secular company; they need to be given their own places. Just like they choose to live separately, they should be given the opportunity to work separately.”
Saar stressed that the economic gaps originated from education gaps and that the fact that many haredim don’t study core curriculum subjects prevents them from participating in the labor force later on in life.
“This year my ministry cut NIS 21 million from schools that didn’t teach core subjects and by doing so enforced a decision that was reached six years ago and never practiced,” said Saar.
He also conceded, however, that there were some schools that would never allow courses in secular subjects.
Braverman spoke about the wasted financial resource that lies dormant in the Arab Israeli population.
“There is an incredible economic force sitting among us that is completely wasted and overlooked,” he said. “The biggest impediment for Arab Israelis’ involvement in the workforce is the fact that Israelis simply don’t know them; they think they are all extremists or traitors. The Arab population should be encouraged and empowered and we need to make sure obstacles are removed from their path.
“I am not talking about affirmative action, I’m talking about eliminating discrimination,” Braverman added.
Opposition chairwoman Tzipi Livni said that the conference for the first time brought together two issues that are usually discussed in separate rooms.
“Israel has a very strong economy, but a completely unequal society,” she said. “We like to see ourselves and for others to see us as a start-up nation that is democratic and egalitarian, but anyone who has gone through a branding process knows that change needs to come from within. We as a society have yet to decide what we are.”
“We think that we are at the top because of our entrance into the OECD, but we are at the bottom when it comes to poverty and social gaps and I find that unacceptable,” she continued. “I do not accept this government’s trickle down philosophy of supporting the wealthy out of belief that the growth will be shared. The major question here is one of responsibility and appropriate budgeting. What needs to be established is the government’s responsibility to its citizens and how it is practiced.”
The solutions Livni offered focused mainly on education, reducing corrupt government bureaucracy and changing the leadership structure and elections process so that leaders become more concerned with long-term visions and the general public interest.
Meanwhile, Defense Minister Ehud Barak spoke about the need to balance Israel’s internal socio-economic problems with its security concerns. He said that reducing Israel’s security budget would put the country at risk of external threats and also jeopardize its financial performance.
“Today the security budget is the smallest in terms of its percentage of the total budget than it’s ever been before,” Barak said. “We need to make sure that it is not dropped too low otherwise we will risk our safety.”
Finance Minister Yuval Steinitz, who recently returned from an International Monetary Fund meeting in Washington, said that while in Israel the global crisis feels like it’s past, in the rest of the world that is not the case, and that he and his team came back with harsh feelings.
“The way to overcome the crisis is not by taking emergency measures, but by possessing a long term financial horizon, focusing on things like continuing growth, reducing unemployment and taking care of the weakest populations,” said Steinitz. “We are not back to normal yet; we need to continue anti-crisis policies like the twoyear budget, reducing the number of foreign workers and creating more jobs.”
Steinitz stressed that one of the keys to Israel’s successful exit from crisis mode was cooperation between the government, workers and employers, adding that they should continue to work together closely to maintain a fertile market environment.