In the early 1980s, Israel was going through hyperinflation -around 500%-, the result of a high fiscal deficit. But within a decade, the economy had balanced, inflation had dropped to 20%, and would continue to drop to 1% in recent years. The recipe, explains the Israeli ambassador to Argentina, galit ronenis first political before economic.
“What we did, despite having a lot of difference between the left and the right, was that the entire government did a national unity agreementand regardless of their political side, the effort was made for six years… and we did not have an inflation of 500% a year again, “said the ambassador.
“Now in the pandemic it has risen to 20%, but normally it is 5 or 6%. It is necessary to have a political agreement of all the parties despite their difference for the well-being of all and working together, for that we elect politicians”, Ronen reinforces about the need for a political agreement that also transmits confidence to the markets.
“We offer to cooperate, but the recipe must be adapted to Argentina, in fact one of those who made the recipe in Israel is an Argentine,” continued the ambassador.
Esteban Klor was born in Córdoba, but has lived in Israel for a decade and a half, where he is a professor of Political Economy at the Hebrew University of Jerusalem. “On an economic level, the recipe was relatively simple: lower the fiscal deficit and, at least initially, depreciate the currency by 20% and freeze the exchange rate and wages“, he explained during his time in Argentina two years ago.
“The problem of the countries that come with a lot of inflation is achieve credibility that the public debt is not going to be financed by printing currency“, he remarked. Something that does not happen in Argentina. In the opposite direction in the last decade, the shekel, the Israeli currency, appreciated 25%.
Later the way out of the crisis is cultural. With an important promotion of employment-oriented education, and with a focus on technological development. “Since the beginning of the State Jews put a lot of emphasis on education. We have education for people who want to work, for those who want to be scientists, but also for those who want to be intellectuals”, explained Galit Ronen.
“We believe that work is part of education, I grew up in a kibbutz where I studied from 8am to 2pm, and from 2pm to 4pm we went to work with other 14-year-olds. The model of work as part of education It also came with the beginning of the State, and we have universities that are not free, but there are many scholarships for those who need them, and there is a system where students give support to others and get a discount,” explained the ambassador about the model that they review so much today. ruling party as opposition.
