Israel/Middle East (News & Politics)/Israel's privatizations

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Question
QUESTION: Hello, David, are you there right now? I would like to ask you some questions about the current privatizations in Israeli companies now. Could you help me?

ANSWER: Hi paula,

I'd be glad to answer your question. I can't promise I'll answer it the moment you ask but I can do so as soon as I can. What would you like to know about israel's privatization?

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QUESTION: In terms os politics, Israel was always dominated by the left. How surprising it is for Israel to be privatizing its public companies now?
Are those privatizations an exception in the Middle East? Or it may be a tendency?
What was the problem with those companies? What was the political use made of them so they will have to be privatized? (Corruption for example)
Do you think those companies will be better when privatized?

Thank you! Are you a teacher? Do you have a masters degree in what?

Answer
Hello again Paula,

First off, I'm not a teacher and I don't have a degree - I just want to be honest with you from the start. I am a "student of history" who has lived in Israel for a while, and I've been a pro-Israel activist for many years. With that in mind, I'll try to answer your questions as best as I could.

Historically, the few businesses in Israel, as well as in the Middle East generally, have been privately owned, and the majority were also family owned. Probably the first country in the Middle East to begin a left wing, socialist, institutionally owned, type of economy, was Israel. This happened in 1904 with the immigration of socialist Jews from Eastern Europe. Their left wing socialist ideologies were strengthened upon arrival in the country as a response to the massive poverty and poor living conditions of the indigenous Jews (as well as the Arab population) and also the struggling economic situation of the immigrant Zionist pioneers who had come 20 years before. In truth, this was what the situation called for at that period of time and it was, subsequently, a major factor in the tremendous growth of the economy while also getting the country through some rough periods in its history. This is not to say that everything in Israel was part of a socialist system. Long-established and newly formed businesses did not want any government interference and remained private. But a major portion of the economy was socialist. By the 1970s, however, socialism was not necessary any more and the government could have sold their holdings to private investors. But they didn't do that. They preferred to hold on to their original ideals.

In 1978, the Israeli public voted out the left wing government and in a right wing anti-Socialist government. But even this right-wing government was slow to privatize the economy. It wasn't until the Tel Aviv stock market crash in 1983, due in major part, to corruption, that woke the politicians up. Three years and several jump-start plans later, privatization started. It also followed similar trends in Britain (which has had a similar economic history as Israel) and other countries in Europe. It's still going on, but because of this process, the Israeli economy has grown by leaps and bounds, even more so than before. Today, Israel is THE most affluent country in the Middle East (with the possible exception of the oil rich Gulf States - take away the oil and what have you got?). But let's not over-romanticize. Along with the economy, the gap between the haves and have-nots has also grown and poverty has jumped to around 21%, which is about average in the Middle East (relative to each country) but is astronomical by European and American standards. There is still a long way to go.

With the possible exception of Egypt and a few places in Syria and Iraq which had flourishing economies and societies (if you can believe that), the Middle East in the early 20th century was not much different than Israel. However, since those countries had different historical experiences, they went socialist much later. In the 50s, there arose a movement among the Arab countries called pan-Arabism which was socialist in character. Its influence stretched from Morocco to Iraq and it was led by Egypt. This was seen as an answer to the general decline of Arab civilization that began at around that time and their perceived humiliation at their defeat by Israel in Israel's War of Independence and subsequent wars. The countries on the Arabian peninsula did not believe in this ideology. Those countries have always been, and remains today, too conservative to follow any type of socialist ideology. Pan Arabism reached its zenith in the 70s when the people and governments saw that that ideology did not solve any of their problems. Therefore, some came to try Islamic theocracy, some tried democracy, etc. But they simply couldn't figure out which direction to go. They still can't, which, by the way, is why you see all the chaos in the Arab world today.

I hope this answers your questions. Feel free to ask me anything else if you like.

Israel/Middle East (News & Politics)

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David

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I am an expert in Middle Eastern history, and Israeli history in particular. My main focus is Biblical analysis, the origins of Islam, and medieval and modern historical events in Israel. Everything you see happening in the world today, has a history.

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I am a free-lance writer who has previously lived in, and studied the history of, Israel.

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