Fischer optimistic about economy but wary about unemployment

Government plans first employment centers for Beduin in the Negev.

Stn Fischer good 88 248 (photo credit: Ariel Jerozolimski)
Stn Fischer good 88 248
(photo credit: Ariel Jerozolimski)
Despite signs of a recovery in the Israeli and global economies, unemployment will continue to rise over the next few months, Bank of Israel Governor Stanley Fischer said Monday. "There is no question that our situation here is much better than it was at the end of 2008," he said at a business conference sponsored by the haredi newspaper Hamodia in Jerusalem. "We are starting to see signs of a recovery as exports begin to show growth. But unemployment will continue to rise over the next couple of months, and there are still difficult times ahead of us. "I am optimistic about the Israeli economy, but we shouldn't exaggerate. We will need to cope with the problem of unemployment. It does not feel good here, but it feels much better than in most countries in the western world." Fischer said the local bond market was starting to recover and companies are raising money. "On a global level, we see signs of improvement," he said. "The rebound is especially noticeable in Asia. Exports are beginning to increase in the US, the UK and parts of Europe." Fischer said the poverty gap between the secular and haredi communities was growing. He called on religious Jews to increase their secular education and pursue jobs. The poverty rate among haredim was greater than that of the general population and is rising, Fischer said, because their employment level is lower. "We need to be concerned about the fact that the gaps are growing all the time," he said. "The solution is that more people need to go out to work, but to go out to work without appropriate education is difficult." Relative poverty among haredim rose to about 60 percent in 2007-2008, from about 40% in 1997, according to Bank of Israel figures. Among the remainder of the Jewish population, poverty remained unchanged at a little over 10%. The poverty rate among Israeli Arabs was about 50%, according to the central bank. Fischer said the haredi community needed to boost education in mathematics, English and science. Separately, the Industry, Trade and Labor Ministry on Monday announced plans for the establishment of the first employment centers for the Beduin population of the Negev. As part of the government's plan for the development of the periphery in general and the Negev in particular, the ministry has signed an agreement with Joint Israel to spend NIS 5.5 million on the project, with the ministry covering 75 percent of the cost. A regional center and two community centers will open this year, and gradually another six centers will be added, the ministry said. "The employment centers will seek employment for one of the poorest population groups in Israel - 61% poverty in Beduin villages," Industry, Trade and Labor Minister Binyamin Ben-Eliezer said. The labor participation rate among Beduin men is 55.5%. Among Beduin women it is 9%, which is the lowest rate in the country; the rate for other Israeli Arab women is 25%. Bloomberg contributed to this report.