Happy days for Israel’s economy

What would you do if you woke up in the morning and saw that somebody was offering you US$16 billion – give or take a billion?

Well that is the estimated direct benefit to the Israeli economy years from new energy reserves – around 2 billion shekels per year for the next 25 or 30 years.

It has been established beyond doubt that just off Israel’s shores are commercial supplies of gas. There may even be some oil as well. The government appointed Sheshinski Committee on the future tax structure of these finds is about to report.

The politicians and the groups of vested interest will work out the final details – taxes, dividends and the rest. But the bottom line is lots of extra income for the Finance Ministry. And of course, there will be knock-on effects – new side industries, employment, exports, etc etc.

What to do with this extra cash? Some quick calculations in the newspaper Yediot point to several options:

  • 0.5% reduction in VAT
  • 3 new hospitals
  • A train line from Ashkelon to Beersheba

And what else was in today’s newspaper. 1.7 million citizens now officially live below the poverty line, roughly 23% of the population. Of these, about 50% are children.

Now let’s think again what to do with that money.

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One Comment on “Happy days for Israel’s economy”

  1. beer7 Says:

    You realize, don’t you, that always roughly 23% of the population with about half of them children will be below the poverty line, even if you distribute all the expected income to the poorer housholds? The Israeli poverty line is defined as below half of the average income, therefore it will always yield about a quarter of the population below the poverty line.

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