Recession could have an upside, Ben-David says

TAU prof. calls downturn a chance to make much-needed reforms.

financial graph 88 (photo credit: )
financial graph 88
(photo credit: )
There could be a 'silver lining' to the dark cloud of the current economic recession, according to Dr. Dan Ben-David, executive director of the Taub Center for Social Policy Research and an economics professor at Tel Aviv University's Department of Public Policy. Ben-David, who published the Taub Center's annual Social Services Report on Tuesday, told The Jerusalem Post that despite the fact that the economy is likely to "worsen before it gets better, there is also a silver lining to the dark cloud, because we now have the opportunity make major reforms in government policy" that will put Israel in a much better position in the future. "Israel's socioeconomic landscape was following long-term trends that were not sustainable," said Ben-David, who took over as executive director of the center five months ago. "The country's standard of living per capita was growing at a slow rate and we were beginning to fall far behind other countries; the levels of poverty were deepening and the income inequality between certain populations has been getting wider and wider since the 1970s," he said. When there is macro-economic growth, as in Israel over the past few years, it is impossible to muster the "political power and public support to make sweeping reforms to the socioeconomic path," he said. "When we are cruising on a certain path and things are not so bad, then no one wants to make changes," he said. "Now, because of the recession, there are no misconceptions, we can see clearly that things are not good. In that sense, it's a very good time to get people's attention and show them the things that need fixing." Raising attention to the deepening economic crisis and its social affects is one of the main goals of the Taub Center's annual report, which is to be distributed to policy-makers, including Prime Minister-designate Binyamin Netanyahu, in the coming weeks. Examining economics, employment, education, health and social welfare, the report highlighted that despite the economic growth in 2007/8 - before the recession began in the fourth quarter of last year - unemployment continued to expand steadily and the socioeconomic gaps between the haves and have-nots increased. Although the unemployment rate was relatively low, the number of chronically unemployed people - unable to break back into the workforce for many months or even years - was steadily worsening. Among those being left behind by the job market were the highly educated and Arab-Israelis, who could not find employment due to the increasing influx of foreign workers, the report found. The Taub Center document urges the government to focus on the implementation of a constructive policy that will help needy families, reduce the socioeconomic gaps and better develop social welfare services. On Monday, Netanyahu met with representatives of 30 NGOs to hear about their challenges in aiding the country's weakest populations. While he did not make any concrete promises, he did say the recession was a good time to make structural changes and that he would explore ways to further incorporate NGOs into the public social welfare sector. "It was definitely a good sign," Ben-David said. "A lot more needs to be spent by the government on the social safety net, but it needs to be distributed wisely, not only focusing on the physical infrastructure but also on the people. We live in an amazing country and if certain key changes are made it can only get better here."