Israel Week Ending July 16

Politics, Foreign Affairs, Covid, Defense, American Jewry, and the Economy

It has been a rather challenging week for the coalition in the Knesset. Having a one-seat majority makes it very difficult to pass controversial legislation — especially when the Likud and its allies automatically vote against any coalition-raised bill, even if they agree with the proposed legislation in question. As such, last week, the government failed to pass an extension of the Marriage Reunification Act. This week, the coalition was forced to put off a vote on the legalization of marijuana. This vote was delayed because the Ra’am party said it has a problem legalizing a drug it believes to be dangerous and requested time to examine the matter further. Finally, early Thursday morning, after 18 hours of debate, the Knesset chairman accidentally voted against the government bill to reform the chief rabbinate. His mistake resulted in the bill going down to defeat. Despite these difficulties, members of the government seem confident that when the most crucial vote takes place, i.e., the vote over the budget, they will have the necessary 61 votes to pass it. It will be a rough few months until the government gains the required experience to work within such narrow margins, but I am optimistic that they will.

FOREIGN RELATIONS

The new government continues to cover new ground in its relations with the world. Foreign Minister Lapid was warmly received in Brussels, both by the EU foreign Ministers and by NATO. Israel's new President, Yitzchak “Bougie” Herzog, has become involved in the diplomatic game, speaking to Jordan's King Abdullah, Palestinian Authority head Abbas, and receiving a call from Turkey’s President Erdogan. Herzog has been closely coordinating his actions with the government, whose ministers he knows well. 

The positive reactions received by the new government on the international stage are not because anyone foresees a radical policy shift on the horizon. However, world leaders do expect that with Netanyahu no longer Prime Minister, Israel’s foreign relations will not be as contentious. That being said, the new government does seem intent on reevaluating long-standing policies; trying to think outside the box, to offer some original solutions. According to American officials urging Israel to take action, one of those areas of movement is going to have to be Israel’s relations with the Palestinian Authority (which is currently the weakest it has ever been). While the final disposition of the West Bank is an area of profound dispute within this government, strengthening the Authority in the short term should be a no-brainer.

Israel is concerned about the deterioration of the situation in Lebanon. The Lebanese economy has been in free fall for two years, and the latest Prime Minister has resigned from their non-functioning government.

It is important to note that both in terms of the Knesset and Israel’s foreign relations, former Prime Minister Netanyahu and the opposition parties have been engaging in a scorched earth policy. In their view, if Netanyahu can't be Prime Minister, then nobody can succeed. As mentioned above, the Likud and its opposition partners continually vote against bills they would support. Moreover, Netanyahu has come up with outrageously false narratives to attack the government — including the most ridiculous of all, Netanyahu’s patently preposterous assertion that by selling more water to Jordan and improving relations with Israel's neighbor, (relations, which incidentally, Netanyahu nearly destroyed), Bennett will be helping Iran, enabling “oil-poor Jordan” to sell oil to “oil-rich" Iran (as if). 

COVID—19

Israel is clearly in the midst of the 4th Covid wave, thanks to the Delta variant. Most of us were convinced we had left Covid behind, but with 850 new cases reported yesterday, that is clearly not the case. On the bright side, increases in serious cases have not escalated at the rate of previous waves, no doubt due to the vaccine. The government is very reluctant to take strong measures, so far limiting itself to the reinstitution of the indoor mask-wearing requirement. However, indoor dining remains permissible, and since you cannot dine with a mask, that leniency seems self-defeating. The government came to an agreement with wedding halls operators to require all guests to be fully vaccinated, or tested for Coronavirus 72 hours before the celebration. In addition, only younger people will be allowed to dance. 

This seems like a ridiculous arrangement. Firstly, it is clear that vaccinated people are now getting sick and probably spreading the disease. Is this rise in infection among fully vaccinated people because the vaccine's effectiveness wanes over time, or a result of the ability of the Delta variant to overcome the vaccines? We do not know. But vaccinated people are getting sick, and some have died. The key to stopping a pandemic is to act quickly, but, so far, the government appears afraid to do so. 

Prime Minister Bennett urged Israelis not to travel, asserting that the whole world is likely to become “red” (overrun with Covid infections) in the next few weeks, i.e., places to which it is illegal to fly. So far, this has not dissuaded Israelis from traveling. What has noticeably improved is the Covid testing setup at Ben-Gurion airport. 

I was one of those who traveled, having visited with family in the US last week. Ben-Gurion was well organized. It took me an hour from exiting the plane to leave the airport after getting my Covid test, and the results came back in 18 hours. 

A few comments about the trip — El Al now only flies 787s to the US. The 787 is roomier and nicer than the old 747s. I was only in New York and suburban Westchester, but my experiences, including with TSA agents at Kennedy, was that New Yorkers are friendlier and more polite in the post-Covid world. How long this wave of increased kindness will last is anyone's guess, but having worked, studied, and lived in Manhattan for decades, I can truthfully say people are noticeably nicer.

DEFENSE

The IDF has announced the appointment of Brigadier General Yifat Tomer Yerushalmi as the military's new Advocate General. She becomes the first woman to hold that position, and only the second woman to achieve the rank of Aluf (General). 

The IDF's experiment with female tank crews has reached a new stage; with the first crews being dispatched to the Egyptian border. They are now considered combat-ready.

AMERICAN JEWRY

A rather alarming poll has been released by the Jewish Electorate Institute. Some of the findings are unremarkable, i.e., that most American Jews support President Biden. However, the same polling found that only 62% of Jews in the US say they are emotionally attached to Israel.

What should ring even more serious alarm bells is that 20% of American Jews under 40 do not accept that Israel has the right to exist; 33% believe Israel is committing genocide against the Palestinians, and 38% consider Israel an apartheid state.

These numbers are alarming, and while they reflect a general failure to teach history in the US, they are an extraordinary indictment of Jewish education — which either fails to teach modern Jewish/Israeli history or when it does, teaches a whitewashed version. As a result, when students are exposed to the actual history, they often believe what they learned was totally false, and that the Palestinian narrative must be correct. While there are other complicating factors, such as the acceptance of intersectionality, the lack of their understanding of Israel’s complex history is the underlying problem.

ECONOMY

Investments in Israel continue to soar, with Israeli companies raising a total of $11.9 billion, during the first half of 2021. This compares to $10.3 billion raised in all of 2020, which constituted a record. Of course, there are many reasons for this incredible increase. Still, the deluge of available capital has been fueling a race to find ever elusive talent to allow the newly flush Israeli startups to expand, and meet the optimistic projections that allowed them to raise these humongous sums of money. 

Meanwhile, the combination of not enough housing starts, coupled with all of the money injected into the Israeli economy, has resulted in an acceleration of the increase in housing prices in Israel during the last year. Housing prices in Israel were already among the highest in the world, and they increased 6.9% in the previous year, 3% of that during the last two months.

The new government is taking action to try to lower the cost of living here, by making it easy for grey-market importers to bring in the products that compete with official importers. European standards will automatically be accepted, and importers will no longer have any bureaucratic hurdles to pass to bring in goods. Those hurdles often made it impossible to afford anything but the most significant shipments. The Treasury claims this move will save consumers NIS 4 billion each year. We will see.