OECD entry shows Israel's prominence

PM: We are on path to become one of the most advanced economies.

Steinitz, Netanyahu, Fischer and Peres 311 (photo credit: Associated Press)
Steinitz, Netanyahu, Fischer and Peres 311
(photo credit: Associated Press)
Beyond the considerable economic significance of Israel’s acceptance on Monday into the OECD, the move is diplomatically important because it shows that regardless of the political process, Israel has a “place among the nations due to its economic and technological prowess,” Prime Minister Binyamin Netanyahu told The Jerusalem Post.
A clearly satisfied Netanyahu said in a telephone interview with the Post that while the acceptance into the organization did “not substitute [for] the need to advance toward peace,” it “certainly enhances Israel’s national prestige and begins to create a niche for Israel in the 21st century as a technological and economic force to be reckoned with.”
Asked whether, coming at the beginning of renewed talks with the Palestinians, there was a message here for the Palestinian Authority, Netanyahu slammed the PA, especially its Prime Minister Salam Fayyad, for lobbying the OECD member states against admitting Israel into the organization.
The PA’s efforts, Netanyahu said, were “a form of economic warfare not compatible with peace, and we view it very gravely. It is a very provocative action, but not something we used to stop the peace talks. We disapprove of it greatly, but it has not been a reason to curtail the talks.”
Netanyahu also said that this form of Palestinian “economic warfare” was incompatible with Israel’s attempts to build economic peace with the PA.
“This is not the idea of peace we have,” he said, “and should not be the idea of peace they have.”
Netanyahu, who was effusive in his praise of OECD secretary-general Jose Angel Gurria for ensuring that the decision to accept Israel would be made on the basis of economic, not political considerations, said he discussed the PA efforts with the Americans. He said the US also used its influence to help ensure Israel’s acceptance into the organization.
The PA’s efforts to block the move failed, Netanyahu said, because when an economic organization like the OECD is faced with “the very clear performance of the Israeli economy over the last decade, it became clear and apparent that this could not be discounted because of political interference.”
The acceptance of Israel as a full member of the Organization for Economic Cooperation and Development is expected to boost foreign investment and speed up socioeconomic reforms.
“For over 15 years, Israel has been advancing the process of joining the club of elites and being accepted as a member of the leading economies of the world,” Netanyahu said at a press conference in Jerusalem.
“Acceptance to the OECD was made possible thanks to Israel transforming into a developed country with a free market, while also strictly adhering to responsible and balanced economic policies in recent decades. These policies included reduction of Israel’s debt, maintaining fiscal and development policies, cutting taxes and making the capital market more sophisticated,” the former finance minister continued.
At a meeting in Paris on Monday, OECD countries unanimously agreed to invite Israel, Estonia and Slovenia to become members of the organization, paving the way for its membership to grow to 34 countries.
Netanyahu thanked the OECD’s secretary-general, saying Jose Angel Gurría had taken it as a personal goal to lead the process.
“Estonia, Israel and Slovenia, along with Chile [which] has just deposited its instrument to become a full member, will contribute to a more plural and open OECD that is playing an increasingly important role in the global economic architecture,” Gurría said. “This new chapter in the history of the organization confirms our global vocation as the group of countries that search for answers to the global challenges, and establish standards in many policy fields such as environment, trade, innovation or social issues.”
In a statement, the OECD lauded Israel’s scientific and technological policies for producing outstanding outcomes on a world scale.
“I want to thank the 31 member states for voting in favor of our joining the organization. Any one of them could have vetoed our inclusion. They chose not to do so,” Netanyahu said. “At a time when we keep hearing lamentations over Israel’s international isolation,” this was a particularly welcome sign of Israel’s firm international standing.
Foreign Minister Avigdor Lieberman, currently in Japan, welcomed the OECD’s decision and said it was the product of years of diplomatic efforts. It was “a stamp of approval for the country’s economy and its achievements in technology,” he said in a statement.
Lieberman said Israel’s acceptance into the organization, despite efforts by “anti-Israel entities” to block the move, was proof of the country’s “solid standing” in the international community.
“The OECD decision to invite Israel to become a member of the organization is an important step toward Israel’s integration into the global economy, and is an expression of Israel’s commitment to meet the highest international standards,” Bank of Israel Governor Prof. Stanley Fischer said.
Fischer added that joining the OECD would strengthen investors’ confidence with regard to Israel’s economic standing, and would encourage investment in the economy.
“Becoming a member of the OECD, Israel will be recognized as a developed economy alongside the most developed economies in the world,” Netanyahu said. “There are certain funds abroad that have to invest a great portion of their money only in developed countries, so that Israel’s membership in the organization will extend the range of potential investors in Israeli bonds and in the Israeli economy.”
Fischer expressed the hope that working with the OECD would help advance several economic reforms in Israel, including improving the education system, raising the rate of participation in the labor force, reducing economic inequality, and protecting the environment.
Fischer also emphasized the importance of the OECD’s work in identifying bureaucratic obstacles via its index of marketing regulations.
At the press conference, Netanyahu said that although a number of major reforms implemented in recent years had already contributed to the development of a strong and open economy, there were a number of reforms that the government planned to advance over the coming year as part of conforming to the standards and norms of OECD member countries.
“This year we are planning to advance the reforms within the Israel Lands Administration and the construction sector to clear the bureaucratic bottlenecks involved in releasing land [for use], and we are going to implement a national infrastructure plan to connect citizens to all parts of the country,” the prime minister said. “Furthermore, over the next year, we are going to deal with the problem of the high concentration of power in the private business sector. I am not talking about the traditional monopolies, but rather the pyramid of controlling ownership structures and holdings of companies and financial institutions that is stifling competition.”
Netanyahu also promised to lead a reform within the education systemwith the aim of providing the tools, in particular to the weakpopulations such as haredim and Arabs, for joining the labor market.
“I have presented this plan to the OECD to show that Israel is workingon a very clear path to become one of the most competitive and advancedeconomies,” Netanyahu said.
Israel, Estonia and Slovenia were invited to open accession talks in2007, along with Chile and the Russian Federation. Chile became an OECDmember earlier this year, and membership talks with Russia areprogressing. In parallel, the OECD is strengthening its growingpartnership with major emerging economies, including Brazil, China,India, Indonesia and South Africa.