Prime Minister Binyamin Netanyahu's decision to appoint Likud MK Yuval Steinitz as finance minister was criticized Tuesday by observers who said Steinitz lacked the needed experience. "It would have been better to appoint someone who has an economic background, [especially] in a situation when the economy is facing a crisis," Prof. Avi Ben-Bassat, an economics professor at the Hebrew University of Jerusalem and a former director-general of the Finance Ministry, told The Jerusalem Post Tuesday. "It doesn't have to be an economist, but [it should be] a person with knowledge and experience in the understanding of economic matters." "The significance of this choice is twofold," he said. "It will increase the power of officialdom and will boost the power of Netanyahu without a balance of power in the system, since the new finance minister will, at least initially, have difficulties in judging economic plans, examining proposals and seeking alternatives." Steinitz is known for his expertise on security matters but not for financial or economic background. When he takes up his post on Wednesday, he will be faced with the challenge of getting the economy out of the crisis while averting waves of layoffs. Since the outbreak of the economic crisis, the economy has lost $3.9 billion in exports as a result of a 10-percent decline in orders over the past five months, the Israel Manufacturers Association reported Tuesday. Exports are one of the economy's main engines of employment growth, the association said, adding that a $1b. loss in exports costs 10,000 jobs. "His [Steinitz] effectiveness will be minor," Ben-Bassat said. "Even if you are an excellent or outstanding student, it is hard to understand economic terminology and cope with the vast array of complex economic issues and subjects the Treasury is dealing with. It will take at least a year." Netanyahu was widely expected to keep the ministerial post for himself and have Steinitz, a close ally, work alongside him as a minister-without-portfolio in the Finance Ministry. "I consider this appointment a huge vote of confidence," Steinitz said after meeting with Netanyahu late Monday night. "One of the greatest tasks we are faced with is to deal with the financial crisis, and this we will do." Officials in Netanyahu's officials said Steinitz would be working under the prime minister's direct supervision. Netanyahu would be minister in charge of economic strategy and head of the socioeconomic cabinet, they said. "Steinitz is an intelligent person with the capacity of developing thought processes," Shlomo Maoz, chief economist at Excellence Nessuah Investment House, said Tuesday. "The appointment could bring new thinking into economic policy-making if the new finance minister brings in the advice of good external advisers to cope with the crisis, like they did in Germany. If he listens only to the Treasury and its plans, they might manipulate him and it might be difficult to succeed." Moaz cited Moshe Nissim, an attorney who served as finance minister from 1986-1988, as an example of a finance minister who succeeded despite a lack of economic background. Steinitz met with Finance Ministry director-general Yarom Ariav on Tuesday to discuss the Treasury's stimulus plan and the 2009 and 2010 budgets. "We have hard work ahead of us," Steinitz said. "We will act fast and with sensitivity, determination, calmness and judgment to strengthen the economy." Steinitz will meet with Finance Ministry senior officials on Wednesday. As head of the "100-days team" appointed by Netanyahu to prepare an economic action plan, Steinitz has been meeting with leading industrialists and officials from the Bank of Israel, the Histadrut and the Israel Manufacturers Association. Steinitz, 50, holds a PhD in philosophy from Tel Aviv University and bachelor's and master's degrees in philosophy from Hebrew University. During his academic career at the University of Haifa, he took a special interest in the study of military strategy and tactics. In the army, he served in the Golani Brigade. Steinitz's political involvement commenced in the 1980s when he joined Peace Now. But his opposition to the Oslo Accords drew him into the Likud camp. Gil Hoffman contributed to this report.