'Exporting to new markets key to economic growth'

Netanyahu says too much of discourse on economy about how to distribute the pie, not enough about how to make that pie grow.

PM Binyamin Netanyahu fisting_311 (photo credit: GPO)
PM Binyamin Netanyahu fisting_311
(photo credit: GPO)
Israel needs a new approach to defy global conditions and continue strong economic growth, and that starts with reaching new markets abroad and at home, Prime Minister Binyamin Netanyahu said Monday.
The global economy will stall in the near future, and Israel should concentrate its efforts on sending exports to China, India, Brazil and other emerging economies, he said at the Globes Israel Business Conference in Tel Aviv.
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“In my opinion, any Israeli who wants to go to China should go,” Netanyahu said. “Why? Because it’s a massive, growing market, and if we obtain even a small portion of it, we can increase our exports massively... we must increase the size of the [economic] pie.”
In addition to Asia, Latin America and Africa, the Israeli economy must also reach new markets inside its own borders, he said, referring to the Galilee and the Negev. The development of transportation infrastructure leading in both directions, and the implementation of housing reforms, would create a new vehicle for growth, he said.
Addressing students at Tel Hai Academic College, who were linked to the conference via live feed, he urged them not to leave the Galilee, saying the region would turn into “something wonderful.”
The third and final approach Netanyahu said Israel must take to ensure strong growth is through development of key industries: water, agriculture, space and cyber. If Israel can successfully combine all these new approaches, he said, then the “sky is the limit.”
Netanyahu reiterated that Israel must balance defense needs and the recommendations set out in the Trajtenberg Report on socioeconomic change with the government’s obligation to safeguard the economy in troubled times. He said too much of the public discourse on the economy was about how to distribute the pie, and not enough was about how to make that pie grow.
The only way to expand the pie was by supporting the free market and allowing the private sector to give the economy added value, Netanyahu said.
“The private sector is the healthy horse that leads the cart,” he said. “I say that because there is a line of thinking that the economy is created out of nowhere...growth is created by the private sector, and those who forget that will eventually have it backfire on them.”
The government would soon propose a bill based on recommendations made by the Trajtenberg Committee, which dealt with over-concentration within industries, and by the Committee on Strengthening Market Competitiveness, which dealt with cross-ownership between the financial and non-financial sectors, Netanyahu said. That would strengthen the private sector, he said.
Some European nations are suffering today because of over-regulation, while others are suffering because of under-regulation, Netanyahu said. The main challenge for the government was striking the right balance between competition and regulation, he said, and “we want the horse to race between them.