2006-05-12-olmert

By Ira Sharkansky

JERUSALEM —We have a lot on our plate. Ehud Olmert clobbered together a governing coalition, but latent tensions became apparent during the first week.

This may have been inevitable, given the lack of experience of Pensioner Party members who found themselves elected to the Knesset, the lack of ideological cement in the new Kadima Party, the appetites of Labor Party socialists wanting to make up for the capitalism promoted by former Finance Minister Benyamin Netanyahu, and ultra-Orthodox politicians wanting to return to earlier days of generous family allowances and support for religious academies.

Most prominent among recent disturbances was an increase in the price of bread. This is the stuff of riots in poor countries. Israel is a rich country, according to the World Bank, but it has politicians who pose as saviors of the people.

We have a great variety of bread, thanks to the immigration of more than one million bread eaters from the former Soviet Union. The price of most of what we eat is not regulated. Numerous bakeries compete for our trade, but increase prices when the costs of imported wheat, fuel, and other factors climb beyond their desire to absorb them. What remains controlled are basic loaves. One is an unwrapped, tasty hard crust wheat and rye combination whose price increased by 7 percent. It now sells for 3.70 shekels (U.S. $ .84) for a (750 gram or 1.65 lbs) loaf. An unwrapped braided Shabbat Chalah (500 gram or 1.1 lbs) now cost 4.05 shekels (US $ .96). Being unwrapped is a quaint remnant of Israel's past. If you walk the streets early in the morning, you can see cartons of the loaves left outside of as-yet unopened neighborhood grocery stores. One can hope that personnel come to take them inside before the arrival of neighborhood dogs searching for a hydrant, lamp post, or some other target for their morning activity. There is an economic argument that eliminating price controls would—via competition—reduce the price of this food, but populist politicians are not buying.

The bread price increase led one Knesset member of the Pensioners party, and four from the Labor Party to violate their coalition agreement and abstain or vote against the government's budget proposal. A Kadima member of Knesset abstained from supporting the earlier formation of the government, saying that the prime minister had violated a promise about making her a minister or deputy minister. When several members of Knesset demanded a price roll back from the prime minister, he responded that he would not protect Israelis against international price increases for bread or gasoline, now about $6 a gallon.

Labor's new minister of education has put two items on our plate. One is a reform proposal for elementary and secondary education, not yet formulated but likely to be expensive. She promises that it will allow the next school year to open without a teachers' strike. Another is a program of loans for all students in higher education, regardless of the economic status of themselves or their families. She says that students would not have to begin repaying the loans until their earnings exceed the national average.

University tuition is currently subsidized, and is the equivalent of US $2,700 a year. Universities teach the majority of highly qualified students. Colleges that are not subsidized by the government charge up to three times as much, but are open to students not able to be accepted at the universities. A few of these are the local branches of foreign institutions; some of these may be all right in their home countries (University of Latvia, Clark University) , but their local branches seem to be in the hands of entrepreneurs interested in providing easy degrees for school teachers, civil servants, police and military officers who want a piece of paper that will increase their salaries. The proposal of the education minister would help all students in higher education.

It is too early for Tamar and Mattan to line up for their loan applications. This proposal will compete with others might be viewed as worthier demands on public resources, like greater payments to the aged immigrants who came without resources from the former Soviet Union and Ethiopia, payments to large families of the ultra-Orthodox and Arabs, more money for subsidized medications, or whatever else wins support from the Pensioners, Labor, Kadima, or ultra-Orthodox politicians in the government.

Money is not the only item on our plate. The new Minister of Defense, the head of the Labor Party, wants to open political conversations with the Mahmoud Abbas, President or Chairman of the Palestine National Authority. The Prime Minister was quick to indicate that international relations and the peace process are not the tasks of the Defense Minister. The Defense Minister says he recognizes that, but still wants to talk to Abbas. We will see how this plays out.

Our full plate may be troublesome, but it is more enviable than the empty plate of the Palestinians. For those interested in political explanations, that may also be due to a lack of political experience of a new government. In this case, it is Hamas and its loud insistence on replacing, rather than living alongside Israel. A depressing account of payless paydays for medical personnel, teachers, civil servants, and security personnel, high unemployment, and hospital storerooms empty of medicine and equipment appears in the latest issue of The Economist : http://www.economist.com/world/africa/displaystory.cfm?story_id=6919123

The secretary of the Arab League is second to no one in his declarations in behalf of Palestinians, but he laments that Arab banks will not transfer funds to the Authority. Apparently they do not want to expose themselves to suits in the United States and elsewhere by those who have suffered from the violence of Hamas and other Palestinian groups. This is a problem that may also affect the good intentions of the European Community, the US State Department and others who want to send humanitarian aid to the Palestinians. Bank transfers are the common ways to do this, but the banks are afraid of transferring. The families of American tourists killed by Palestinian terror might never get a cent from the institutions they are suing, but they are making themselves felt.

A group of Palestinian dignitaries in Israeli prisons has produce something for our mutual consideration. It is a peace proposal that includes the release of all Palestinian prisoners, along with Israel's return to the pre-1967 borders and granting the right of return to Palestinian refugees from 1948 and 1967.

There remains a low level conflict between families, clans, security units, and who knows what other groupings of Palestinians. There are been several assertions of cease fire agreements, none of which has lasted for more than a few hours. Payless paydays, including for armed security personnel, may have something to do with this.

There is a lot to be done. Perhaps I retired too early, before producing enough students knowledgeable about policymaking and public administration.

Sharkansky is an emeritus member of the political science department at Hebrew University in Jerusalem