Honored Panelists,
Distinguished Guests,
This current Conference, a tradition of the Globes newspaper is taking place
in an atmosphere of unprecedented economic achievement for the State of
Israel.
This year, the growth of the economy will be no less than 5.5%, and perhaps
even higher. The rate of unemployment decreased in the final quarter to a
rate of 7.4% – the lowest in over a decade.
Our balance of payments is positive for the third year in a row, and the
surplus will this year stand at $8 billion. Inflation is close to zero, our
national debt has decreased to a rate of 82% of the GNP.
In 2007, product per capita will average close to $21,000 and in terms of
consumer power in Israel, its value is even higher.
All these measures point to a dramatic improvement in the economic stability
and substantial strength in the capability of the Israeli economy to deal
with the social challenges which the State of Israel faces.
These figures are accepted in such forums with peace of mind, as if they
could be taken for granted, as if they were part of a routine which had
existed for years in Israel, as if these were common achievements in OECD
countries. This is not so. This is a phenomenon which is unique to Israel
only over the past three to four years, and it should not be taken for
granted.
One of the decisive conditions for the existence of economic growth in our
country, as well as the impressive economic growth we achieved over the past
few years is the existence of a political horizon.
I wish to state here, clearly and without hesitation, that with all due
respect to the components of our economic policy, fiscal discipline, and
strictness with regard to the budgetary spending ceiling, what significantly
influences Israel’s economic achievements are our accomplishments in the war
against terror, primarily in terms of its almost complete eradication from
our city centers, the existence of hope in the political process and the
system of extraordinary political relations we built with a number of
countries in the Americas, Europe and Asia over the past few years. Israel
bought an honorable place for itself in the global economy.
When there is political dialogue, when there is open and overt dialogue with
most of the leading parties in the international community, when there is a
horizon of peace rather than the ongoing danger of deteriorating into
violence – there is also a chance for economic prosperity.
Anyone who thinks that we can separate the two is suffering from
self-delusion. There will be no significant growth if there is no political
horizon.
I emphasize these things after Annapolis for a reason. Annapolis does not
constitute an historic breakthrough. It was not planned to be one either.
However, it provided us backup and support for this process of firming up
the foundations for serious negotiations, meaningful reconciliation and
perhaps even peace accords.
One cannot prophesy economic growth while fighting against the
reconciliation process and any negotiations with our Palestinian neighbors.
One cannot be against Annapolis, endlessly frighten the public regarding
national catastrophes, isolate Israel from the central stream of global
politics and believe at the same time that markets can be increased, trade
can be expanded, more foreign investors and investments can be brought here
or that more and more countries can be encouraged to have improved economic
relations with us.
I do not intend to stop. Annapolis was not an event, nor was it a show for
the sake of publicity.
Over four years ago, in an interview with the ‘Yediot Acharonot’ newspaper,
I said that I believed that the shortness of time obligated us to act
quickly to reach a political agreement which would allow us to evacuate most
of the territory in Judea and Samaria, create a clear barrier between
ourselves and the majority of Palestinians and allow them to establish an
independent, vibrant and democratic state of their own.
The destruction of the two-state model and international backing for the
idea of one state for all residents with equal rights to vote threatens the
existence of the State of Israel.
I never said that if there was not a political solution, the State of Israel
was finished, despite the headline in the newspapers and the quote
wrongfully attributed to me – that combination of words never left my mouth.
If the solution of two nation-states for two people is removed from the
international agenda – and we continue to be in all the territories, and the
Palestinians demand total democratization of the country under whose
patronage they live – this will create an existential threat to Israel,
certainly as a Jewish state.
Today there is a chance, there is an opportunity, there is the beginning of
dialogue with a Palestinian leadership which declares its desire for peace.
It is true that this leadership is not strong enough. They still do not have
the firm infrastructure of a country, with all the accompanying institutions
and law enforcement authorities needed for its establishment. However, there
is a leadership which declares its desire to make peace with us. This is an
opportunity with many uncertain components, many risks and many dangers. It
is impossible not to recognize them, it is impossible to ignore them. Under
no circumstances can we allow this uncertainty and the risks to decide.
Because there is also an opportunity.
I intend to take advantage of this opportunity to conduct serious,
continuous, ongoing negotiations in order to reach a historic breakthrough
towards a new political reality.
What are the main targets of the economic policy?
1. The primary target is to reach sustainable growth of approximately 6%.
This is a pretentious target, but not an impossible one. If we continue to
maintain fiscal discipline and cautiously make the spending ceiling more
flexible, as we have done until now, we can reach this target.
2. In the field of employment, we have, for the first time, defined
quantitative targets. Our intention is to reach an employment rate of 71.7%
by the year 2010 for people between the ages of 25 and 64. That is to say, a
growth rate of almost 1% per annum for the coming years.
3. Increasing the rate of participation in employment, primarily among the
Haredi and non-Jewish sectors. These two sectors can and must become much
more dominant in the cumulative influence they have on the economic
development of Israel.
4. Reducing poverty: increasing the income of the lowest fifth of the
population by 10%,which is more than the growth rate per capita, over the
next three years. Achieving this target will bring an additional 1.3% to 2%
to the GDP, which translates to additional income in the amount of between
NIS 8 and 12 billion per annum.
5. Upgrading and strengthening the traditional industries: the Israeli
economy cannot be built solely on the hi-tech field. The importance of
hi-tech is immense, its contribution to the achievements of the economy in
Israel are unprecedented, but the State of Israel can be a world leader in
the traditional industries as well, and conquer new markets in Europe and
Asia with innovative products in the traditional industries.
6. And of course, education: elementary school education, pre-school, taking
care of those under the age of six, focusing on children at risk and in
weaker populations, secondary education and higher education.
I do not wish to enter into empty rhetoric and polemics, and I therefore
will present a number of figures:
In the 2006 budget, we added NIS 1.1 billion to the education budget above
that of 2005, and greater than the natural increase.
In the 2007 budget, we added NIS 700 million to the education budget above
that of 2006, and greater than the natural increase.
In the proposed 2008 budget, we propose adding a real addition to the
education budget in the amount of NIS 1.9 billion compared to the 2007
budget.
In the agreement we reached with the Teachers Union, headed by Yossi
Wasserman, as part of the general reform of the education system, we added
an average of 26% to 34 % to the teachers’ salaries. The base salary of
teachers was nearly doubled.
In the first quarter of 2008, the Government intends to approve the
recommendations of the Shochat Committee for Academic Education, which
includes an additional NIS 1.5 billion by 2013 to the budgets of
institutions of higher learning.
Moreover, during the next two years, we will invest a sum of NIS 400 million
in implementing the Schmidt Committee Report on children at risk.
We began a program to treat children under the age of six. There has never
been such a program, nor has there been such a government commitment.
Now there is a plan, there are funds, there will be centers for holistic
treatment of such children in hundreds of locations across the country. The
well-baby centers will not be shut down, but rather expanded and transformed
into centers for diagnoses, early treatment and rehabilitation for babies
and toddlers.
Education is in critical condition. I do not hide this fact; it worsened in
the years during which the education budget was dramatically cut.
There is an improvement, but it still at the beginning of the path. The
teachers are right when they demand an improvement in their wage conditions
and primarily with regard to rehabilitating their status and respect for
their occupation – and they have a solid basis to expect the Government to
act in these matters quickly and with determination. The Government is right
in standing firm that there be general reforms in the education system, and
we will not make do only with an addition to wages which may undermine wage
agreements in the entire economy.
The cry of the teachers touches my heart. I am as familiar with the
education system as many of them.
I dealt with education for many years. As mayor, I built over 100 new
schools in Jerusalem over 10 years. I would spend days at the schools, with
teachers and administrators. I know how difficult their mission is. It must
be improved.
It is vital to invest more in education; there is no escape from correcting
the damage and deterioration which have accumulated over the past 15 years.
However – this cannot be done in one day. I will not commit to doing so –
and I will not give permission to conduct negotiations on this basis.
The Secondary School Teachers Organization succeeded in striking the most
sensitive chords in Israeli society and arousing spontaneous sympathy among
many, even those who know exactly how much the Government added to the
education budget over the past few years, and how much it gave to issues
tangential to education which previously received no budgetary allocations.
Now they must conclude the negotiations with us and return to teaching. We
are waiting for them, the classrooms are waiting for them and the children
want to learn.
The State of Israel lacks natural resources. This is why our human resources
are so important. I believe we must nurture this resource by strengthening
the education system in Israel until it becomes among the best in the world.
Israel’s sophisticated electronics system and technological innovations have
become famous around the world. We have made great strides because we had no
choice. We had to be first in order to safeguard our existence.
This is true with regard to nurturing our human resources and social
strength as well. We have no choice and therefore we will achieve the
necessary accomplishments in the field of education as well.
Thank you.
BreuerPress-info
