Analysis: Deri an unknown quantity as new economy minister

By
May 18, 2015 06:07

Deri’s economic agenda to date has consisted largely in securing welfare benefits for his constituents, who are among Israel’s poorest.

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Aryeh Deri

Aryeh Deri. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Market analysts were cautious about Shas leader Arye Deri’s ascension to the Economy Ministry Sunday, where he will have big shoes to fill as his predecessor Bayit Yehudi head Naftali Bennett moves on to the Education Ministry.

As the head of the ultra-Orthodox Shas party, Deri’s economic agenda to date has consisted largely in securing welfare benefits for his constituents, who are among Israel’s poorest.

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Bennett, a hi-tech superstar who made millions when he sold his company, brought a private sector gravitas to the position that was clear in the list of specific accomplishments he rattled off at Sunday’s changing of the guard ceremony in Jerusalem. Lowering import barriers and passing reforms in the food market has started bringing down food prices, he said, and more Arab women and haredi men have entered the work force.

Bennett made simplifying some of the bureaucracy a major goal. He trumpeted the fact that he only cut regulation, and refused to add more (though Israel’s ranking in international ease of doing business indexes has only worsened, a fact Bennett says will change in time). He increased Israel’s focus on trading with the East, “so won’t be too dependent on one market.”

In what might have been seen as a dig at Deri, he quoted the Jewish scholar Maimonides as saying that the best thing you can give a man is work, and not an allotment.

For his part, Deri had few specifics to offer on what he would do in the ministry, but promised to learn.  "We will do whatever we need to do,” he said, before joking that neither he nor Bennett were thrilled about the ministries they were heading to.

“Of course I have my agenda, everyone knows that. It doesn’t change,” Deri said, specifying that his plans were aimed at “helping the regular citizen.”

Yet there are few clear signs of what to expect from the Deri. It is unclear whether he will work to liberalize or regulate Israel’s markets, cater to political interests that prevent reforms or push forward on the same path as Bennett. It seems unlikely that he will work for greater integration of ultra-Orthodox men into the labor force, which the Bank of Israel has cited as a central medium- and long-term problem for the country.

“As an economist there’s not much to say about Deri’s appointment, but having said that, my guess would be that Deri would be fully interested in the small group he represents,” said Prof. Omer Moav, an economics professor at the Interdisciplinary Center Herzliya and at University of Warwick in England. “If I were in the ministry and trying to help Deri’s voters, which are the poor in Israel, I would do everything in my power to reduce the price of food, and also lower import barriers, ease rules in the standards bureau and cut the bureaucracy.”

But is that how Deri thinks he can best help is voters? Perhaps, says Moav. “There is no reason he won’t do a good job, because there’s no conflicting interest between his interest and that of the general public.”

The FICC, a business group, agrees that Deri should be given a chance, saying that he is an able and intelligent man. But not everyone agrees, especially those still scandalized that Deri, a former interior minister who served 22 months in jail for corruption, could serve as a minister in any capacity, even in a different ministry.

The Movement for Quality Government in Israel filed a high court petition to stop him from heading the ministry, saying the appointment would “dissolve the public’s trust in public institutions generally, and the executive authority in particular, and would erode the purity of the rule of law.”

The court is expected to rule on the petition on Wednesday.


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