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(photo credit: Ariel Jerozolimski)
Whether or not they agree with Prime Minister Ehud Olmert's decision to appoint Interior Minister Roni Bar-On as finance minister, some of the country's leading economists and business leaders concur that Bar-On most definitely has his work cut out for him once installed in office.
"Because... he isn't an economist, he won't be coming with an agenda or an approach to some of Israel's most daunting economic problems," said Robi Nathanson, director-general of the Microcenter for Political Economics. "This is a man who was given his job because he is a good friend of Olmert's and has no idea about economics - I really hope he can keep the economy going," added Nathanson.
Bar-On plans to bring his Interior Ministry director-general, Ram Belinkov, with him to the Treasury, although it is not yet clear what position Belinkov will receive.
Chief among Nathanson's concerns is that Bar-On is ill-equipped to generate more work opportunities. "Changing priorities in the budget so that they focus more on closing the income gaps and expanding the labor market requires innovative thinking," he said. "He has a lot of homework to do, or he'd better surround himself with good advisors," exclaimed Nathanson.
Shlomo Maoz, an economist at Excellence Nessuah, said that in addition to decreasing unemployment and blocking foreign workers from entering into Israel's workforce, Bar-On will be faced with tightening the country's fiscal policy and continuing reforms that have been made to Israel's electricity and aviation sectors.
"In order for him to be really successful," said Maoz, "he must avoid running higher government expenditures and must maintain the momentum that the economy is currently generating - something that is much easier said than done."
According to Uriel Lynn, chairman of the Federation of Israeli Chambers of Commerce, Bar-On was the best choice that Olmert could have made. "Today, we don't need the country's finance minister to [launch] any special initiatives and we definitely don't need him to be someone who is going to be seeking to grab the limelight - like Ramon and Sheetrit would have tried to do by introducing new ideas and new moves," said Lynn.
Lynn pointed out however, that while the economy has displayed incredible growth over the past few years, Bar-On must still preserve and increase the country's rate of economic growth; continue to open the Israeli economy to new markets and opportunities and must increase the number of those participating in the country's workforce.
"In order to accomplish these goals," said Lynn, "he is going to be faced with numerous roadblocks. He is going to have to convince MKs that opening up competition in the domains they are responsible for is a good idea. Lowered taxes will be extremely challenging to pass through the Treasury, as [doing so] requires great persuasive power. He is going to need to be firm enough to keep the economy at the same rate of growth."
Meanwhile, Michael Sarel, the head of the economics and research department at the Harel Insurance and Finance Group said that of the three candidates, Bar-On was the one that he knew the least about. "I have never heard him speak about economics and therefore, it's hard for me to say if he's a good choice," he said. "I do know, however, that once he gets into office, he is going to be immediately faced with planning the 2008 budget, and will have to deal with the pressure of not increasing expenditures."
"One thing is for sure," said Nathanson, "he is going to be learning a lot on the job."
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