The economics Shas is trying to impose on Livni is surprisingly similar to Iran's.
By AMOTZ ASA-ELamotz asa el 88(photo credit: )
Whether you do or don't like her, the good news about Tzipi Livni is that she is not full of herself.
It's been nearly 15 years now since we last had modest leaders like Yitzhak Shamir and Yitzhak Rabin, and we simply forgot what it feels like to have somebody head toward the villa on Balfour Street and not feel like Napoleon entering the Notre Dame for his coronation.
If anything, Livni seems as bewildered as the rest of us by the turn of improbable events that have landed her where she has arrived. Evidently, she does not forget that her stint's aftermath is prone to be not much happier than her predecessor's. This is the good news.
The bad news is that Livni has yet to demonstrate to any of her many prospective partners, rivals and enemies - whether at home or abroad - that she means business.
Some say Livni's supreme test will be in her ability to squeeze water out of the Syrian rock. Others insist that the big test awaits her somewhere between Ramallah's well-tailored negotiators and Gaza's threadbare gunmen. That's of course besides those who think Iran will dominate Livni's premiership, adding grimly that the dilemmas she will face there will be unlike anything she faced as minister of immigrant absorption, justice and also foreign affairs.
Middle Israelis disagree. To them, Livni's first test of mettle will pit her not against Mahmoud Abbas, Mahmoud Ahmadinejad or Bashar Assad, but against Shas leader Eli Yishai and the voodoo economics he is trying to impose on her. Paradoxically, it is in this little-noticed way that Livni will first face Iran.
THE IRANIAN economy has not won much attention in the West, outside of intelligence organizations. Ever since the revolution Iran has been in the headlines as a religious, military and diplomatic story, but its economy, like any Middle Eastern country's domestic affairs, was assumed to be boring, cryptic and inconsequential.
Well, the fact is the Iranian economy has been a major-league mess, one that in fact may bring down the mullahs quite regardless of their foreign entanglements. As they prepare for next year's presidential election, Teheran's clerics must consider tampering with the revolution's economic centerpiece for the first time since unseating the shah 30 years ago next February.
Designating the working classes as their main social pillar and the previous era's elites as Public Enemy Number One, Teheran's clerics created an elaborate subsidies regime, assuming oil will always be there to finance such spending and the people will be happy as long as they are fed, even if they are disempowered.
That is why driving a car in Teheran costs less than it does anywhere in the world, about 12 cents per liter. Consequently, Iran is drinking much more oil than it can digest, including large quantities that are smuggled illicitly to neighboring countries. Had prices been freely set, much of this would have been exported at a great profit. According to the IMF, this year Iran stands to lose more than $60 billion this way, nearly twice its losses to energy subsidies last year.
Meanwhile, since the Islamists' military and nuclear adventures came at the expense of a serious upgrade of the economy's refining capacity, Iran continues to import much of its refined oil, which costs them the same high prices it has cost the rest of the world in recent years. In other words, the clerics' economic management has made Iran lose both when oil prices rise and when they fall.
All told, Teheran spends a fifth of its budget on energy and farming subsidies. Price interference has expectedly distorted the economy, resulting in 27 percent inflation officially, and a much higher level unofficially. The refusal to let the central bank free the currency - a move that is economically imperative, but politically risky as it will empower the business sector - has spiked speculative demand for Teheran real estate, in the absence of varied investment outlets. Consequently, the price of a square foot has skyrocketed within a decade from $50 to $1,000.
Meanwhile, the mullahs discouraged family planning and the population doubled since 1979 to 70 million, which means that the clerics' subsidies' regime must now stuff twice as many pockets with taxpayer's cash. The result of all this is that one in five work-age Iranians is believed to be unemployed and the economy, that back in the shah's days grew consistently by at least 7 percent annually, has not grown per-capita even one year since 1979.
Realizing that something must be done to rationalize their price system, but still eager to keep the masses' livelihood managed and their self-empowerment controlled, the mullahs now say they will change the price support system, but not the pandering to the masses. "We are going to give money directly to the needy," Ahmadinejad said recently.
In a nutshell, this is also what Eli Yishai says.
THE SHAS system of price interference is less crude than Iran's, and therefore more cunning.
Shas does not rule the country and possesses no oil wells, but it nevertheless gets cash into its constituents' pockets by, for instance, getting better busing, longer hours and cheaper lunches for a school system that discourages cultural enlightenment and self-fulfillment. That's pretty much the same thinking that has governed the ayatollahs' economy. If allowed its way, it can land us in the hole where Ahmadinejad now is.
None of this impresses Eli Yishai as he extorts Tzipi Livni to restore the child allotments formula that was discontinued by Bibi Netanyahu, whereby parents received for any child after the fourth a monthly NIS 850, about four times the sum for the first four. Now, using literally the same words as Ahmadinejad, Yishai says, "We will find ways to transfer money directly to the needy." This would be a nonstarter under any circumstances, since money works only when charged according to supply and demand and earned in return for work. However, set against the backdrop of a global economic crisis, Yishai's demands are altogether scandalous.
To show us, and the rest of those out to test her mettle, that she has what it takes, Livni must confront Yishai and tell him: "Your demands are both unaffordable and immoral. You may not care for the consequences, because the mess you want me to make will not be yours to clean, but I have to consider the entire citizenry, and the future, too. I appreciate your concern for your voters, and in fact share it. But I think they will best be helped by being led to the professional mainstream as engineers, technicians, army officers, MBAs, lawyers, doctors and anything else that makes people earn an honest shekel. Call me when this becomes your aim."
Then all will know Tzipi Livni means business.
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