הדו”ח Going for Growth הוא אחד מפרסומי הדגל השנתיים של ארגון ה-OECD. הדו”ח חוקר עם אילו כלים ממשלות מגיבות לפנדמיה COVID-19 וכיצד ההתאוששות תשפיע לעצב את עתידם רווחתם של אזרחים ברחבי העולם. כמו במדינות רבות אחרות, גם בישראל המשבר העולמי הנוכחי חשף חולשות מבניות קיימות הפוגעות בחוסן הכלכלי של המדינה.
כותבת הפוסט, ד”ר לאורה בראון, היא קצינת מדיניות במשלחת הכלכלית של מנהל סחר חוץ במשרד הכלכלה והתעשייה שיושבת בנציגות הקבועה של ישראל לארגון ה-OECD שמקום מושבה בפריס.
Post-pandemic recovery in Israel
OECD’s recommendations for the way out
OECD released its annual flagship publication “Going for Growth”, which investigates how governments respond to the COVID-19 pandemic and how the recovery will shape the future of well-being of citizens worldwide. As in many countries, in Israel the current global crisis has exposed long-standing weaknesses and existing structural vulnerabilities that undermine the resilience of its economy.
OECD Going for Growth 2021
The current edition includes 49 OECD and non-OECD economies. The report uses economic and social insights to identify five top reform priorities in each country to boost medium-term growth (figure 1). It emphasizes national priority challenges – how member countries can build resilience, raise productivity and help people and businesses adapt to the changes of the so-called “new reality”. Just as the vaccine rollout gradually instils hope, the post-pandemic phase creates new opportunities for a vibrant recovery.
How can Israel accelerate its economic recovery from the pandemic?
OECD has developed a set of five recommendations for Israel concerning its recovery from the crisis: “upskilling” and strengthen labour market policies; improve education and vocational trainings to enhance social cohesion; establish metropolitan transit authorities for an improved transportation infrastructure; reform local municipality infrastructures to improve efficiency; and enhance trade facilitation measures and lower market-protective restrictions.
Upskilling: OECD identifies education and upskilling is key to building a resilient and strong recovery, especially concerning Israel’s challenges of high poverty (primarily among the Ultraorthodox and Arab-Israelis). The COVID-19 crisis has the potential to accelerate the restructuring of Israel’s economy. To facilitate optimal workforce reallocation, active labour market policies should be strengthened. National spending on these policies remains low compared to other OECD countries (figure A). Although unemployment rates sank to 8% in May 2021 (in contrast to an unemployment rate of 20% in May 2020), stepping up retraining and job-search support is needed to help the unemployed transition to new jobs – in particular workforce-intense sectors.
Education: adult skills are relatively weak and vary widely in Israel, which is contributing to a severe labour market duality (figure B). Improving the quality and equity of education and training is fundamental to boosting productivity and enhancing opportunities in the labour market. Reducing differences between educational streams as much as possible is key to further integrate the Ultra-Orthodox (Haredim) and Arab-Israelis into the labour market. This will strengthen long-term growth, improve fiscal sustainability and enhance social cohesion. The same applies to work-based vocational training targeted at adults, who have left the educational system without labour market relevant skills (especially Ultra-Orthodox men). Additional funding to build new pre-school and childcare capacities and improve their quality, particularly in lagging regions, can help reduce socioeconomic gaps.
Infrastructure: Israel’s transportation infrastructure lags significantly behind most other OECD countries, and as a result, road congestion is one of the worst in the OECD. The promotion of integrated transport networks and pricing systems could ensure stable financial support for public transport.
Local government: the government could merge municipalities to promote regional clusters and improve efficiency in local governments. A decrease in local authorities will enhance coordination across municipalities and industrial zones.
Lower market barriers: a reduction of remaining restrictions on foreign suppliers of goods and services can boost competition, in particular in the electricity market and food sector. Lowering tariff/non-tariff barriers and streamlining trade facilitation regulations will benefit especially smaller firms, as costs related to border procedures are particularly onerous for them.
Steps out of the pandemic
In many countries, the pandemic has highlighted a lack of resilience in supply chains for medical goods, uneven access to social safety nets and climate change. Stronger international cooperation is required. OECD’s Going for Growth proposes a well-balanced set of policy reforms to strengthen the private sector and create long-term sustainability. For Israel, OECD recommends to step up its reform process. Progress on reforms has been limited in recent years: this is partially due to the prolonged political uncertainty since 2019 and the focus on dealing with the consequences of the COVID-19 crisis in 2020. Some progress has been made in lowering market barriers and opening the economy to foreign competition – in particular in entertainment electronics, textiles and household appliances. In addition, the spending on education and vocational training in Israel has increased markedly over recent years. The near future will show how fast Israel can implement necessary reform changes, and translate this potential into a vibrant economic and social recovery from the pandemic.