Olmert Outlines Economic Plans
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JERUSALEM (AP) – Israeli Prime Minister Ehud Olmert on Wednesday launched an ambitious economic program to rescue hundreds of thousands of Israelis from poverty, but internal politics made it unlikely that he would be able to carry it out.
While Israel’s economy is booming, the local currency shows unprecedented strength against the dollar and the stock market spirals upward, the gaps between rich and poor Israelis continue to grow, and thousands of large families are subsisting on tiny incomes. Olmert quoted government figures showing that 20 percent of Israel’s 7 million people, including 35 percent of its children, are living below the poverty line, about $1,000 a month for a family of four.
Mr. Olmert told a news conference that the goal of the three-year plan is to remove 242,000 people, including 115,000 children, from the poverty roles. “One the one hand we want to reduce poverty and increase growth by encouraging industry,” he said. “On the other hand, we want balanced, long-term growth for the Israeli economy.”
Among the tools included in the new plan are a negative income tax, supplementing the income of workers who earn too little for their families to live on. Other elements are reducing the numbers of foreign workers and encouraging economic growth.
The plan calls for efforts to integrate the two poorest segments – ultra-Orthodox Jews and Israeli Arabs – into the economy.
Many ultra-Orthodox Jews are poor by choice, living on handouts while studying full-time in Jewish seminaries. Israel’s minority Arab citizens, who make up about 20 percent of the country’s population, suffer from decades of discrimination at the hands of successive Israeli governments, many living in undeveloped villages and subsisting on antiquated agricultural techniques.
The main obstacle Mr. Olmert faces in carrying out the plan is his own lack of public support. Polls show his backing below 20 percent among the people, largely because of last summer’s costly and inconclusive war against Hezbollah guerrillas in Lebanon.
Mr. Olmert has been in office only a year, but political analysts predict that because of his loss of support, his coalition government could collapse at any time, leading to an election. Even if he survives, he might not be able to marshal his plan through an increasingly critical parliament.
