Likud Minister Moshe Kahlon 311.
(photo credit:Avi Hayun)
Of the 30 cabinet ministers and nine deputy ministers, Communications Minister
Moshe Kahlon has had one of the most beneficial effects on the lives of ordinary
His policies have led to lower cell phone charges and soon,
lower cable TV fees. He also holds the Social Welfare Ministry, after Labor’s
Isaac Herzog resigned when his party left the government.
Minister Binyamin Netanyahu formed Israel’s 32nd government in 2009, he welded
together a coalition of 69 Knesset Members from five parties including his own
Likud party. To do that, he gave the other four coalition parties many
portfolios. Only scraps were left for Likud.
He offered Kahlon the lowly
Communications Ministry. Other politicians might have balked. As number six on
the Likud Knesset list, Kahlon deserved better. But Kahlon’s response was:
“Communications is five percent of Israel’s GDP, with over 30 billion shekels in
revenues, I’ll take it!” Unlike almost all the other ministers, Kahlon, 52, has
a business background. He built his own successful business importing car
Kahlon proves that politicians can take effective action that
helps people make ends meet. The first rule is to remember your roots. From his
first days in the Knesset in 2003, he set himself a clear goal: Make lowincome
groups better off. It was a natural choice. Kahlon is the son of immigrants from
Libya and grew up as one of seven children in Givat Olga, a low-income
neighborhood, where he was table tennis champ.
He knows his low-income
constituents well because he was one of them. Former US President George W. Bush
was once embarrassed because he could not tell a journalist how much a pound of
Second, simplify and focus. “I will
continue to work to lower the cost of living by strengthening competition,” he
Kahlon has acted single-mindedly to bring down monopoly prices by
fostering competition in the cell phone market, the cable TV market and
Legislation he initiated has created three new virtual
cellphone providers: Rami Levy Communications, HOT Mobile and Golan Telecom,
which use the infrastructure of existing cellphone providers (Pelephone,
Cellcom, and Orange) to offer cheaper service. Over 100,000 customers signed up
with the new providers since they launched in May. Rates have plummeted by half,
to 17 agorot (about 4 cents) a minute or less. To do this, Kahlon took on
tycoons and lobbyists and defeated them. He’s now confronting the cable TV
duopoly HOT and YES , creating a multi-channel platform to compete with
Kahlon has also set in motion measures to reduce the price of
cellphones by increasing the number of importers of smartphones so as to put an
end to the situation in which he said buying a cellphone is as expensive “as
purchasing an apartment.” Netanyahu has advised ministers to “be like Kahlon and
find creative ways to lower prices.” Kahlon understands that the more
competition there is, the better the service, the lower the prices and the
better off consumers are. This is authentic capitalism. As social protesters
regroup and re-frame their demands, replacing monopolies with competition should
be an important focus.
In politics, there are abundant words, like the
324-page report of the Concentration Committee, the government-appointed panel
charged with increasing competition.
And then there are deeds, scarce as
To be like Kahlon is to act, to smash the chains of cartels
and bring the fresh winds of competition. I have heard Kahlon quietly touted as
the next Finance Minister. If this happens, could he break the cozy banking
oligopoly of Leumi, Hapoalim and Mizrahi Tefahot and reduce their obscene,
costly commissions, by bringing in dynamic foreign banks? It’s a lovely dream.
The writer is senior research fellow, S. Neaman Institute, Technion