End of Covid In Israel? Netanyahu Has a Bad Day and the Economy is Doing Better Than Expected
Israel the Week Ending March 12th
Israel has had an excellent week, with regard to its battle against COVID–19. After many disappointing weeks, in which both the number and rate of infections remained stubbornly high, this week, those numbers dropped dramatically. This long-awaited decline arrived, despite the fact we are now two weeks post Purim, (during which holiday events violated the COVID-19 regulations). At the beginning of this week, Israel opened up its restaurants, bars, and wedding halls. Indoor dining was restricted to those who have been inoculated, but outdoor dining became open to all.
At this point, 90% of those over age 50 have been vaccinated; and we have passed 70% inoculation of the entire adult population. The cumulative effect of our astonishing success getting shots in arms has led to the near disappearance of critically ill patients, requiring hospitalization. On Thursday, the IDF announced that 81% of soldiers are now fully vaccinated, declaring itself the first army in the world to reach herd immunity. Pfizer claimed early Thursday that based on Israeli data, its vaccine is 97% effective in blocking severe illness, and 94% effective in blocking transmission. There is some skepticism regarding this announcement since Pfizer has not made the raw data available.
Nevertheless, whatever the rate of effectiveness, it looks like for the average adult Israeli, the pandemic may be over. On Thursday night, all of the bars and restaurants in Tel Aviv were packed!
POLITICS
With less than two weeks to go until the election, the polls have been steady, with minor changes in either direction. The most critical question will be whether or not Blue and White and Meretz pass the required electoral threshold. If they do, Netanyahu may not have his magic 61 seats. If they do not pass the threshold, he will. Of course, one of the big unknowns remains what Naftali Bennett will do. Conventional wisdom asserts that when push comes to shove, Bennett will go with Netanyahu.
Netanyahu had an embarrassing day, Thursday. His plan was to make a quick visit to the United Arab Emirates for a photo op. The UAE was not thrilled but was willing to go along. Early that morning, it was reported Sara Netanyahu had been admitted to Hadassah Ein Kerem hospital, due to an infected appendix. Nothing more has been reported about it. Rumors swirled around that Netanyahu would cancel his trip because of his wife's illness.
Later in the day, when there was no new news about Sara (she had her appendix removed overnight Thursday), it became clear there were other reasons for the trip’s delay. It turned out Jordan had not granted Netanyahu flyover rights. The right-wing rag, otherwise known as Yisrael Hayom, carried an article that claimed Yair Lapid and Ehud Barak had somehow interfered with the Jordanian government to block the flight. It turned out the Jordanians were retaliating for Israel’s blocking of Crown Prince of Jordan’s visit to the Mosque of Omar, which had been scheduled to take place yesterday. Many asked why Netanyahu needed to traverse Jordan; after all, if he headed south and went directly over Saudi Arabia, it would only have added 20 minutes to the flight. Channel 13’s Ravid Drucker revealed that the Saudi's also refused permission. So what was supposed to be a day of triumph, showcasing Netanyahu’s skill as a “remarkable” statesman; turned out to be a day highlighting the lack of planning in his office.
Then, in a Channel 12 interview on Thursday night, Pfizer's CEO both complimented Netanyahu, while undermining one of the Prime Minister’s key campaign messages. Alberto Bourla admitted that one reason he agreed to sell as many vaccines to Israel as they did was the doggedness with which Netanyahu pursued him — calling him 30 times, including the middle of the night — to convince him Israel was the perfect proving ground for their COVID–19 vaccination. Bourla said he was pleased with his decision, as Israel has indeed proved to be an excellent testbed for the vaccine. However, Bourla undermined one of Netanyahu's key messages, i.e., that “only he (Netanyahu) could be counted on to bring more vaccines if needed.” Bourla stated, in no uncertain terms, that Pfizer will continue to supply Israel with enough additional vaccines as required, regardless of who is Prime Minister.
I interviewed Labor Party Head Merav Michaeli this week, primarily for a Newsweek article on how certain sectors of the Israeli economy (primarily hi-tech) did very well during the pandemic, while others struggled that will be out soon. The interview was wide-ranging, and I hope to publish it in its entirety soon. Two of Michaeli’s responses stand out in my mind. First I asked, why she had insisted on bringing back a party already proclaimed dead. Michaeli responded that nothing else rose from Labor’s ashes, and Israel needs a robust center-left party.
Second, I questioned what she thought Israel could do to improve relations with the Democrats after the Netanyahu era. Michaeli claimed to have excellent relations with the mainstream of the Democratic Party. I asked about “the Squad,” and she seemed to indicate that they represent a much more difficult problem. She spoke about how disappointed she was that AOC decided not to attend the Rabin Memorial, saying that if Rabin was not acceptable to them, she is hard-pressed to know who or what policies would be.
Overall I was impressed, and while I previously believed the Labor Party was a helpless relic, after speaking to Michaeli for a while, I have some hope something transformative can be built on its ashes.
ECONOMY
On a macro level, the Israeli economy performed very well over the past year, despite COVID-19. It ran a current account surplus of $25 billion, thanks to rising exports, and the fact Israelis did not travel abroad this past year. Israelis spend twice as much abroad compared to what tourists bring into the country. In the middle of the last lockdown, during January and February, tax revenue was higher than tax revenue last year before the pandemic.
Israel now has 21 unicorns (private companies worth more than $1 billion; 11 of them are new in the past year). The latest company to reach unicorn status is Papaya, a company that provides global payroll and employee management system.
DEFENSE
This week, the Israeli Air Force released photos of IAF fighters escorting a B-52 bomber on a training mission from the US to the Gulf.
In addition, Israel Aircraft Industries opened a research center to develop alternative precision location systems, not based on vulnerable GPS satellites.