Israel Apparent Avoidance Of The Global Economic Crisis Is Deceptive

Of course it is reassuring to hear that Israel is not necessarily is the same boat as the rest of the world when it comes to the global economic crisis:

As the credit crisis spreads havoc and economic gloom around the globe, bankers and policymakers in Israel are growing in confidence that they will weather the storm.

The Bank of Israel expects the economy to grow by 4.5 per cent this year and about 2.7 per cent in 2009. This is less than in each of the past five years, when Israel clocked up growth rates of more than 5 per cent. But that expansion contrasts with the faltering economies of western Europe and the US, and the uncertainties that are engulfing developing economies in regions such as eastern Europe.

This is great news, especially after many years of rampant inflation and the Israeli currency being a joke. At the same time, poverty in Israel remains a serious problem:

Already the poverty rates in Israel are more than double the average of thirty developed nations in the OECD (Organization for Economic Cooperation and Development). The average poverty rate in the OECD countries is 10.6% of the population; in Israel it is 24.5%. And the situation is even worse when it comes to children. According to the National Insurance Institute, 34% of Israel's children live beneath the poverty level. The comparable figure in the OECD countries is 12%.

These numbers are an embarrassment. The question is whether government is up to addressing this issue as effectively as it dealt with the overall economy.

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