In the end, Israeli Prime Minister Ehud Barak’s decision to support his Knesset opposition’s motion for new elections caught almost everyone by surprise, including his own ministers. Up until the end, commentators believed he would scramble to extricate himself from his parliamentary entanglement, or at the very least call the Knesset’s bluff, by declaring the motion a vote of confidence and then seeing who would be ready to go to the polls in the required 90 days.
But in the end, Barak called on his One Israel party colleagues to support the first reading of the bill to dissolve the Knesset, and it now appears that the country is heading for a spring election. And, when the Israeli parliamentarians filed out of the chamber after the vote, the victors appeared subdued. Undoubtedly, a good number will not make it back to the next Knesset and a number of parties and factions are likely to find themselves without representation.
Even the opposition leader, Ariel Sharon, sees his position threatened, with the imminent return to active political life of the former prime minister, Benjamin Netanyahu, who is likely to challenge him for the Likud party’s top spot. Recent polls have shown that a landslide victory by Netanyahu over Barak is likely, albeit that the latter has not yet declared his participation in the upcoming race.
For Barak, it is unlikely that the election could have come at a more inopportune time. The coalition disintegration was long in coming, but most recently has it taken place against a backdrop of violence in the recent escalation in violence in the West Bank and Gaza. With his 1999 pre-election promise to bring the Israeli-Palestinian struggle to a peaceful conclusion apparently shattered, Barak and his government found themselves at an all-low point.
According to Israeli Finance Minister Avraham (Baiga) Shochat, the early elections will cost the state about 400 million shekels. But then there are the indirect costs. This includes what is known locally as “election economics,” and involves politicians passing populist legislation in order to find favor at the polls. Add to that the fact that the earlier proposed tax reform will now be shelved indefinitely and certainly foreign investors will prefer to sit tight until after polling day, the economic implications of elections are even more severe.
Up until before the latest Palestinian uprising, Barak’s government had racked several positive economic achievements, with signs of a recovery from the steep recession already budding. During the third quarter of 2000, GDP grew by approximately 9 percent, an unprecedented growth rate. The end of this year is expected to show a 5.4 percent growth rate, a relatively respectable figure, which could still have been higher.
However, the violent outbursts in the Palestinian territories have created a number of economic difficulties, with the current outlook revealing an overall loss of $1 billion this year and next year. Particularly hard hit is the building sector, which is largely dependent on skilled and semi-skilled Palestinian labor.
The tourism sector, too, one of the leading sources of revenues for Israel, is facing deep hardships. The overnight stays in hotels plummeted by 48 percent in October. Numerous employees in this sector have been fired.
Unemployment remains one of the most serious problems facing the government, with no apparent solution in sight. Presently, the rate of unemployment in Israel reaches 9 percent, while some forecasts paint an even bleaker picture for the future. Today, figures reveal that 250,000 Israelis are out of work, a population that is unlikely to support the incumbent prime minister.
Ironically, Barak’s political future, along with the political bloc that he heads, is largely in the hands of Yasser Arafat. The prevailing speculation is that Barak will make an attempt at achieving a speedy agreement with his Palestinian counterpart. It presently appears as his only hope to recovery and perhaps salvaging his position as prime minister, however chances for such a turn of events seem very slim indeed. — (Albawaba-MEBG)
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