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OECD Report: Israel’s Economy “Remarkably Resilient But Productivity Weak”



OECD Secretary-General Angel Gurria presented the 141-page biennial report to Prime Minister Netanyahu and Finance Minister Moshe Kahlon on Sunday, January 31

The Israeli economy and employment rate have been growing consistently for the past 13 years and have been described as “remarkably resilient,” according to a report by the Organization for Economic Co-operation and Development (OECD).

OECD Secretary-General Angel Gurria presented the 141-page biennial report to Prime Minister Netanyahu and Finance Minister Moshe Kahlon on Sunday, January 31.

The report said that Israel is economically better prepared albeit not entirely prepared to look after its aging population when compared with the other 33 members of the OECD.

Moreover, the report stated that with the exception of the year 2014 due to Israel’s conflict with Gaza, Israel’s economy has experienced 13 consecutive years of growth with an increase in annual output exceeding most other OECD countries.

The report also made a series of suggestions to Israel regarding climate change, but it stated that Israel accounts for only 0.2% of the world’s global greenhouse gas emissions overall.

Finance Minister Moshe Kahlon praised the findings of the report. “It is nice to receive compliments. This is another report that indicates the strength of the Israeli economy,” he said. Nevertheless, Kahlon hinted that the report’s recommendations may be superfluous as “the observations made by the report are already our economic plan.”

On the other hand, the report also highlighted the fact that the Israeli economy still faces a number of challenges, including a “sluggish” wage increase and a merely average quality of life.

“Israel is also characterised by high poverty and large gaps along many material and non-material dimensions of well-being. Poverty is especially high among the elderly, in part because of low basic pensions,” the report read.

Furthermore, the report identified a number of Israeli societal flaws, such as low employment rates among ultra-Orthodox (Haredi) men and Arab-Israeli women, rising housing prices, and the high cost-of-living standards.

In light of some of the report’s findings, Leket Israel, an Israeli national food bank, has called upon the Israeli government to take steps to address the poverty issues affecting millions of Israelis.

“The numbers are staggering. NIS 18 billion (4.5 billion USD) worth of food is being thrown away every year and from that 8 billion USD is salvageable,” CEO Gidi Kroch told Tazpit Press Service (TPS).

Kroch added that the report highlights the dichotomies of Israel’s economy. He said that there is no reason why 18% of the population should be living in poverty considering the economy’s apparent strength.

“I think the OECD actually amplifies the problem in Israel. On the one hand, they are saying that the Israeli economy is very stable. On the other hand, they are saying that 18% of the population lives below the poverty level, meaning that there is a growing gap between the rich and poor in Israel,” Kroch said.

While he acknowledged that Israel’s record in this respect did not greatly differ from all other OECD countries, he suggested that the government follow the example of the UN and commit to reducing food loss by 50% by the year 2030.

“I think every organization like the army that is funded by the government and therefore by the taxpayers should have to donate excess food. It is just one of the no-brainers that would not cost the government a penny and would help a lot of people mentioned in the report,” Kroch told TPS.


Alexander J. Apfel

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