This Week 710.:r ‘ 1. -1 hidden races Economic signs may be improving, but times are still tough for Israel's poor. DINA KRAFT Jewish Telegraphic Agency Jerusalem rc 11/28 2003 28 rumbs tumble down Yigal Alperson's white beard as he eats his one guaranteed meal of the day at a crowd- ed Jerusalem soup kitchen. Tables spill over with immigrants, the elderly and single mothers, the predominant faces of Israel's poor as the country's economy is battered seemingly from every direction. Three years of Palestinian violence have scared away investors, a world- wide economic downturn has devas- tated Israel's once thriving high-tech industry, factories are closing because of foreign competition, and govern- ment cutbacks in welfare and social spending in response to a $6 billion deficit have taken their toll. "My situation is difficult. We don't have anything to eat," says Alperson, 66, an unemployed statistician who supports his wife and five children on the $888 he receives each month from Israel's national. insurance system. "This is security, you know," he said, pointing to a plate piled high with steaming pasta, chicken cutlets and green beans at Meir Panay, a soup kitchen designed to look like a restau- rant. "At least you know you'll be eat- ing today." Israel's unemployment rate is near 11 percent, almost 18 percent of fam- ilies are living in poverty and the number of poverty-stricken children is on the rise. Israel now has one of the highest poverty rates in the developed world, according to 2002 statistics released recently by the National Insurance Institute. A study of 150,000 Israeli house- holds, •released this month by the JDC-Brookdale Institute, found that 8 percent were having severe difficulty buying enough food. Finance Minister Benjamin Netanyahu's announcement last week that Israel's recession was over sparked a storm of protest. Netanyahu swiftly backtracked from his remarks, saying instead that there were signs of eco- nomic recovery. Exports are up and that's a good sign, said Karnit Flug, who heads the Bank of Israel's research department. The stock market also has risen in recent months. But it's still too early to tell if Israel is headed toward better economic times anytime soon, Flug said. There is a lot of uncertainty about the "security issue and prospects for improvement of the geopolitical situa- tion," Flug said. "The ability of Israel to utilize its potential growth will depend on impro;vement in these areas." Internal Debate The government has argued that the economy's problems stem not only from the intifada but from more inherent problems in the structure of Israeli industry. To address these problems, Israel is trying to privatize many state-owned companies to boost competitiveness. It has begun aggressively deporting foreign workers, whom government officials say take jobs away from Israelis and bring down wages for unskilled labor. The 1990s saw a dramatic increase, to 200,000 foreign workers in Israel. It is one of the highest rates of foreign laborers in the world, experts say. Whether or not Israelis are interested in taking these unskilled jobs remains to be seen. Another government project, reduc- ing welfare support payments for the poor, is expected to increase poverty rates, the JDC-Brookdale study found. By setting a time limit for unemployment benefits, for example, the government hopes to encourage people to go backs() work. But in Israel's present economy, finding work is increasingly difficult. The reforms "in the short term cre- ate a lot more poverty," said Jack Habib, a social economist who directs the JDC-Brookdale Institute. "More people are in need, but all the services they need are being cut back." Rabbi Yechiel Eckstein is the presi- dent of the International Fellowship of Christians and Jews, which funds soup kitchens across the country, as well as a network of warehouses where the needy can receive free furniture and other household goods. The gov- ernment is embarrassed by how its Needy Israelis eat at the Meier Panum soup kitchen in Jerusalem. past five months, however, she has been unable to find work. At this point, she said, "I'll do anything for a job because I have bills to pay and a child to raise." It can be overwhelming "to see the amount of educated people, people with degrees, at the unemployment office," she said. "Getting an educa- tion these days does not mean you are going to get a job." On Jerusalem's Ben-Yehuda Street, the city's once-bustling pedestrian shopping mall, the situation is grim. Repeated terror attacks have kept both tourists and locals away. Shop owners say they barely clear $220 a week. "Zero. There is nothing," snapped Yosef Zakai, owner of a Judaica shop. "Except for someone calling from the United States for a Star of David, there is nothing. There is no work." A few doors down, a man named Yosef wasn't sure how much longer he could afford to run the women's clothing store his parents opened in 1949. "This is the hardest period ever for the store," he said. Across from his shop, he pointed out names etched on a memorial plaque — eight victims of a 2001 sui- cide bombing. "Here one died," he said, pointing at a corner of stone pavement. "Here another, here anoth- er." All Spheres Hit Yosef's voice trailed off, and he Leah Rizel, 34, has a master's degree in human genetics and has worked for headed back to his store — where, atypically, a customer was waiting. ❑ several years in genetics labs. For the stringent new fiscal policies are affect- ing the country, Rabbi Eckstein claims. Such policies "have changed the face of Israel. Now the question is how to portray the public image of Israel," Rabbi Eckstein said. "No one wants to portray it as a third-world nation, but to portray it as an idyllic place where everything is hunky-dory is morally and practically wrong." The Sharon government is defend- ing its policies, taking out ads in the national press saying the reforms are the only way to help the economy. Netanyahu says the cuts are necessary if Israel wants to have a modern econ- omy. Critics say other solutions — such as raising taxes and investing massive- ly in infrastructure — could ignite growth and, in turn, boost tax rev- enue. According to recent surveys, howev- er, most Israelis think the economy is suffering because of the intifada (uprising) and won't improve until the diplomatic impasse is resolved. In fact, it's not only unskilled workers who are having trouble finding work: As the economy slides, the highly educated also feel the pinch.