January 02, 2005

The economic program is working

Here's a good economic review of the past year. Exerpt:

Netanyahu's fundamental assumption is that Israel can achieve 4-5% growth by carrying out several measures:

  • Cutting public spending and taxes, in order to free up resources for the business sector and boost growth, by increased entrepreneurship and incentives to work.
  • Increasing the proportion of the population in the labor force, in order to accelerate growth, by expelling illegal foreign workers.
  • Slashing welfare allocations to groups that could join the labor force.
  • Gradually implementing the Wisconsin plan, adapted for Israel.

Market liberalization and rapid privatization will boost growth, as has happened in other countries. Countries undergoing liberalization can boost GDP by 1-1.5% a year.

I only hope it will continue:

The new government, especially its Mapai members, must recognize that Netanyahu's policy has achieved most of its goals, and should be pursued, with adjustments to meet national needs in 2005 and 2006.

Posted by David Boxenhorn at January 2, 2005 10:25 PM
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