- Israel is experiencing one of its worst recessions since
it was founded in 1948.
- Unemployment last month rose to over 10% of the workforce,
its highest level ever, and a jump of almost one-fifth since the beginning
of 2001. One Israeli media report put the 'real' unemployment rate closer
to 23.3%, with 1.08 million Israelis out of work. This higher figure is
based on the number of workers (161,700) who are registered as employed
but not actually working, the number of people officially defined as unemployed
(258,600), and the number of people defined as employed, even though in
practice they work in occasional jobs or work only on a part-time, irregular
- The jobless news comes as the latest in a string of economic
shocks for Israel. Last year, the Israeli economy shrank by 0.5%, with
the contraction accelerating toward the end of the year. During the last
three months, gross domestic product was down 7.2%, extending a 4% drop
in the third-quarter GDP. For the first time in many years, private consumption
fell 5.7% in the final quarter of 2001, following a 4.9% rise in the third
quarter. The ongoing Intifada, global hi-tech crisis, and September 11th
terrorist attacks in the U.S. all contributed to the GDP falling last year,
compared with a 6.4% rise the year before. Further, the Intifada has resulted
in a 37% rise in public spending, following a drop of 15.8% in the third
- The Bank of Israel reported last month that the violence
has cost the Israeli economy $2.8 billion in lost output, mainly due to
a sharp drop in tourism revenue. In a lead editorial, Ha'aretz noted that
Israel is not doing anything in those areas where it can shape its own
destiny. "In the past, it has become increasingly clear that it
is impossible to conduct a normal economy while the state?s resources are
aimed at perpetuating the occupation and the settlements in the West Bank
and Gaza Strip," it wrote.
- The real remedy for the economic crisis will be found
when Israel deals with the root causes of the conflict with the Palestinians.
Only a determined effort to reach reconciliation between the two peoples,
based on ending the occupation and the establishment of a Palestinian state
beside the state of Israel, can result in peace and economic prosperity.
By promising it can have the territories as well as peace, security, and
prosperity, the government is deceiving the public.
- Jerusalem Post & BBC, 2/18/02 Globes, 2/19/02 &
Ha?aretz 2/20/02 http://www.peacenow.org