After years of rhetoric, Netanyahu begins tackling regulatory burden

Doing Business rank has fallen 23 places during PM’s tenure.

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March 8, 2016 04:52
1 minute read.
Prime Minister Benjamin Netanyahu attends a Likud party meeting at parliament in Jerusalem

Prime Minister Benjamin Netanyahu attends a Likud party meeting at parliament in Jerusalem. (photo credit: REUTERS)

 
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After years of denouncing the country’s burdensome regulation, Prime Minister Benjamin Netanyahu on Monday moved to tackle Israel’s red tape, which he has repeatedly said weighs down the economy.

“We are beginning the biggest battle against excess regulation in the State of Israel, against the excess bureaucracy,” he said at a ministerial committee meeting focused on reducing regulation. “It is the consumers and the businesses in the State of Israel who will benefit from this.”

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Specifically, Netanyahu said the committee would tackle electronic and energy standards.

The electronic standards refer to import standards that differ from those adopted in the EU, meaning that European exporters who want to sell EU-approved electronics on the Israeli market must undergo an additional set of checks first, including an in-lab power consumption examination.

Netanyahu said Israel would cancel its separate standard and adopt the European one instead.

The second issue involved checking energy standards for factories and manufacturers. Netanyahu said regulators would check the standards less frequently and increase the ease of self-reporting.

Monday’s meeting of the ministerial committee on regulation – the first since Netanyahu announced its formation in May – will continue to meet every two weeks.



But despite Netanyahu’s regular rhetoric, Israel’s reputation for regulation has deteriorated under his watch. In the World Bank’s Ease of Doing Business ranking, Israel has dropped 23 spots, from 30th in 2009 when he became prime minister to 53rd in 2016. It ranks behind countries such as Armenia, Thailand and Russia, and is just ahead of Columbia and Turkey.

In 2014, when Israel ranked 35th, Netanyahu declared, “There’s an excess of regulation in Israel, and we are determined to cut down the bureaucracy and regulation” in a speech to the Manufacturers Association of Israel.

In the last government, then-economy minister Naftali Bennett made regulatory reform his cause célèbre, saying he cut 10% of the official standards from the Standards Institute.

Policy reports from organizations such as the OECD, the Taub Center and the Bank of Israel have regularly faulted Israel’s regulatory burden as a central reason for the country’s relatively low productivity.

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