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November 28, 2003/Kislev 3 5764, Vol. 56, No. 10
Israelis destitute in flailing economy
DINA KRAFT
Jewish Telegraphic Agency
JERUSALEM - Crumbs tumble down Yigal Alperson's white beard as he eats his one guaranteed meal of the day at a crowded Jerusalem soup kitchen.
Tables spill over with immigrants, the elderly and single mothers, the predominant faces of Israel's poor as the country's economy is battered seemingly from every direction.
Three years of Palestinian violence have scared away investors, a worldwide economic downturn has devastated Israel's once thriving high-tech industry, factories are closing because of foreign competition, and government cutbacks in welfare and social spending in response to a $6 billion deficit have taken their toll.
"My situation is difficult. We don't have anything to eat," said Alperson, 66, an un-employed statistician who supports his wife and five children on the $888 he receives each month from Israel's national insurance system.
"This is security, you know," he said pointing to a plate piled high with steaming pasta, chicken cutlets and green beans at Meir Panim, a soup kitchen designed to look like a restaurant.
Israel's unemployment rate is near 11 percent, almost 18 percent of families are living in poverty and the number of poverty-stricken children is on the rise. Israel now has one of the highest poverty rates in the developed world, according to 2002 statistics released recently by the National Insurance Institute.
A study of some 150,000 households, released this month by the JDC-Brookdale Institute, found that 8 percent were having severe difficulty buying enough food.
Meanwhile, Finance Minister Benjamin Netanyahu's an-nouncement last week that Israel's recession was over sparked a storm of protest. Netanyahu swiftly backtracked from his remarks, saying instead that there were signs of economic recovery.
Exports are up and that's a good sign, said Karnit Flug, who heads the Bank of Israel's research department. The stock market also has risen in recent months.
But it's still too early to tell if Israel is headed toward better economic times anytime soon, Flug said.
The government has argued that the economy's problems stem not only from the intifada but from problems in the structure of Israeli industry. To address these problems, Israel is trying to privatize many state-owned companies to boost competitiveness.
It has begun aggressively deporting foreign workers, whom government officials say take jobs away from Israelis and bring down wages for unskilled labor. The 1990s saw a dramatic increase in foreign workers in Israel. Whether or not Israelis are interested in taking these unskilled jobs remains to be seen.
Another government pro-ject, reducing welfare support payments for the poor, is expected to increase poverty rates, the JDC-Brookdale study found.
By setting a time limit for unemployment benefits, for example, the government hopes to encourage people to go back to work. But in Israel's present economy, finding work is increasingly difficult.
The reforms "in the short term create a lot more poverty," said Jack Habib, a social economist who directs the JDC-Brookdale Institute. "More people are in need, but all the services they need are being cut back."
Critics say other solutions - such as raising taxes and investing massively in infrastructure - could ignite growth and, in turn, boost tax revenue.
According to recent surveys, however, most Israelis think the economy is suffering because of the intifada and won't improve until the diplomatic impasse is resolved.
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