Israel's poor lost in political fray

A $3.2 billion budget cut planned for 2003 will unfairly target Israel's poorest citizens, say critics.

It is the high season for Israeli party politics, but the campaign is far from the mind of Etti Avraham, a divorced mother of two who lives in the Shapira slum area of Tel Aviv.

She works parttime, depending on social security allocations to supplement her income. Last year, she endured a cut in social security payments as part of Israel's austerity program. It was launched amid a recession prompted by worldwide economic woes, the decline of high-tech and other industries and the confrontation with the Palestinians.

Ms. Avraham had to choose between cuts in the family's diet and sending her children, 5 and 8, to after-school instruction, which costs $10 a month for each child. "I prefer less food and that they learn more," Ms. Avraham says. "I prefer that I do not eat meat and that my children eat the meat."

Avraham is one of hundreds of thousands of lower-income Israelis hit hard by cutbacks in social security and unemployment benefits. And the situation is threatening to become much more severe, warn academics and social activists. New cuts are planned in the government's 2003 budget, which Prime Minister Ariel Sharon hopes to pass by the end of this month. These are part of $3.2 billion in planned budget trims, which the activists say will be borne disproportionately by those who can least afford them. Avraham, for example, would face a cut of another $165 a month in social security payments under the new budget. "There is no justice in our country," she says bitterly.

The lack of attention, even in Israel, to the lopsided battle between left-wing activists and government economists points to the extent to which even social emergencies continue to take a back seat to security issues.

Activists say the budget cuts could help shape Israeli society for years to come, locking more poor into a cycle of poverty and widening income and class distinctions in a society that was founded with an egalitarian ethos.

But with the debate on the right focusing on whether Yasser Arafat should be expelled, and the Labor candidate for prime minister, Amram Mitzna, vowing to evacuate Jewish settlements from the Gaza Strip, poverty has not emerged as yet as an electoral issue.

"We are already seeing people picking through the garbage and we need to start asking why," says Evyatar Fluss, who heads a Jerusalem charity. "But there is no political party for the poor and thus they have no backing. And poverty, except for dramatic individual cases, is something that our journalists apparently believe does not sell newspapers."

Finance Ministry budget director Ori Yogev disputes that the poor have been made to pay more, saying that a new tax on capital gains shows that middle and upper class are paying for the deficit. "Services are being cut for everyone, not only the poor," he says. He argues that cutting people's social security allocations will encourage them back into the workforce. But critics say that with unemployment currently over 10 percent, it will simply cut them adrift.

Shlomo Svirski, director of research at the Adva Center, a left-wing Tel Aviv think tank, says such an approach is steadily widening the gap between rich and poor. He stresses that the capital-gains tax was coupled with new tax breaks that benefit the wealthy: "There was a moral choice between two groups here, and the government decided that hurting poor people would not hurt it politically," he says. Gideon Ezra, a Likud deputy minister said that while some poor people would be hurt, the cuts are necessary to balance a budget that contains essential projects such as a security fence to stop infiltrations from Palestinian areas.

The Labor Party, which as a part of the national unity government joined in passing last year's cutbacks, should begin to stress the woes of the poor, says Meir Sheetreet, the Labor deputy mayor of Jerusalem. But other Labor leaders insist that after two years of terrorist attacks security and the Palestinian issue are what most interest voters.

On paper, the situation is becoming alarming. Statistics released two weeks ago by Israel's National Insurance Institute forecast that by the end of the year, 30.6 percent of Israeli children will live below the poverty line, with the amount increasing to 605,000 projected for 2002, from 481,100 in 2000. By far the worst off are the Arab citizens of Israel, according to official statistics.

The lines at the four Jerusalem soup kitchens of the Hazon Yeshaya religious institute, which provides hot lunches of meat, peas, pasta, and soup daily to nearly a thousand people are growing. Demand has risen by 40 percent over the past two years, according to its director, Rabbi Abraham Israel. "A person cannot cut back on rent because he would sleep in the streets. So he cuts back on food for his kids. We are supplying food to hundreds of children a day," he says. "How can the government cut back from those already [disadvantaged]?"

Mr. Yogev argues that the deficit must be tackled head on lest Israel's credit rating fall, with grave repercussions for the economy as a whole. But he adds that there is also a longer-term strategy behind the social-security cuts. "The idea for the future is to be a society at the standard of living prevalent in the Western world. For this we need to have higher participation in the labor force. So we have to make more Israelis go back into the workforce, even at minimum wage." To make way for the Israeli workers, the government will expel 50,000 foreign workers during 2003, he says. The money of the Israeli workers will stay in the country, in contrast to the remittances of the foreigners sent back to their home countries, he adds.

Critics, however, doubt that the expulsions will materialize, since Israeli employers are already proving reluctant to part with the cheaper foreign labor.

Instead, the cuts point to a bleak future, Svirski says. "Under normal conditions a young generation can look forward to a life that is as good as or better than that of its parents. These policies mean that for a very large number of young Israelis, that will not be the case."

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