Opinion - Politics

The surprising issue that could decide Israel's 'do-over' election between Netanyahu and Gantz

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Key Points
  • The fact that this election was forced thanks to a military draft dispute makes it look like defense and security are indeed the catalysts and key issues for the voters.
  • But you have to dig deeper to see that the draft issue is really just one aspect of an income and cultural inequality problem that may be just as threatening to Israel's future as Hamas or Iran.
Electoral campaign posters bearing the portraits of Israel's Prime Minister Benjamin Netanyahu (L), and retired Israeli general Benny Gantz (R), in the Israeli city of Tel Aviv, on April 3, 2019.
JACK GUEZ | AFP | Getty Images

Ask anyone even remotely familiar with Israeli politics about Tuesday's national election, and they'll probably tell you the number one issue is security.

Usually, they'd be 100 percent right.

But this time, saying that Israel's election will be decided based on matters of defense and terrorism will only get you partial credit. Looking deeper, it's clear that economics and the spectre of growing economic inequality is playing just as big a role this time around.

First, it's important to note that this election is a "do over." The national election in April resulted in a razor thin plurality for Prime Minister Benjamin Netanyahu's Likud party, but a much clearer majority for all the various right wing parties overall.

Netanyahu has his devout supporters, but much of his electoral success hinges on Israelis who begrudgingly believe he is the only politician capable of leading the country.

He and the governments he's led during his record 10-year-long second tenure as prime minister still get the political credit for improving Israel's overall situation, especially compared to the regular terror attacks the civilian population suffered through in the early 2000s.

This is why Likud won that plurality in April, and also why it has consistently held a small lead in most pre-election polls.

In addition to the draft exemption, ultra-orthodox communities in Israel receive the bulk of the nation's welfare benefits. Their yeshivas, which teach few practical secular job skills are heavily subsidized by the government. Topping it all off, the ultra-orthodox community has the highest birth rate in the nation.

But this second election became necessary when the secular right wing Yisrael Beiteinu party, led by Russian immigrant Avigdor Liberman, refused to join in a ruling coalition without key concessions from Netanyahu. Liberman has continued to demand that Netanyhau enact a military draft bill that will end the exemption ultra-orthodox Jews have from service in the Israel Defense Forces.

With the two major ultra-orthodox parties also contributing a large number of seats to Netanyahu's proposed coalition, the prime minister could not find a way to satisfy both them and Liberman. So, now we have Israel Election, 2.0.

The fact that this election was forced thanks to a military draft dispute makes it look like defense and security are indeed the catalysts and key issues for the voters. But you have to dig deeper to see that the draft issue is really just one aspect of an income and cultural inequality problem that may be just as threatening to Israel's future as Hamas or Iran.

Israel is actually not in need of more soldiers in its armed forces. In fact, the mandatory service period for Israeli men has been reduced from four years to 32 months with proposals to trim it even further.

There are also practical questions about how fit ultra-orthodox Jews are for military service, even if their leaders were willing to let go of years of sometimes violent opposition to sending them to the IDF in significant numbers.

Compared to secular Jews and the acculturated modern orthodox Jews who dominate the elite and officer ranks in the IDF, Jews who have only been educated in more cloistered yeshivas don't seem likely to be able to fit in easily. No serious Israeli thinks that getting more ultra-orthodox Jews into the armed forces is the answer to any defense and security issues.

But for Liberman and his conservative secular followers, the draft controversy is just a symbol of the more disturbing economic disparity gripping Israel's population.

In addition to the draft exemption, ultra-orthodox communities in Israel receive the bulk of the nation's welfare benefits. Their yeshivas, which teach few practical secular job skills are heavily subsidized by the government. Topping it all off, the ultra-orthodox community has the highest birth rate in the nation.

The community was fewer than 3,000 people at the founding of the state in 1948. Now the ultra-orthodox or Haredi segment of the population is well past the 1 million mark and 12 percent of the population, up from 8 percent in 2010.

Economic divide

This is the flip side to the amazing economic story that Israel justifiably presents to the world. "Start Up Nation" is still growing overall, with a robust 3.6 percent GDP for the first half of 2019, surging foreign investment, and the lowest overall unemployment rate in the Middle East at 3.7 percent.

But that fast growing ultra-orthodox population isn't taking part in much of that economic growth. Only about 50 percent of ultra-orthodox men in Israel are working, and that number is shrinking despite many admirable efforts to get more members of the community trained to participate in Israel's vibrant tech sector job market. Even compared to the severe skills gap in the U.S. population, Israel's alarming disparity is worse.

That's where the IDF comes in again. Multiple studies have shown that Israeli military service provides the key elements to succeed economically in Israel, from acquiring skills to making the personal connections that pay off later.

It's exceedingly hard to succeed in Israel as a civilian without putting in your time as a soldier. Liberman and his supporters likely consciously, or at least subconsciously, know that Israel's future hinges on fixing this problem.

Netanyahu is likely aware of this too, but even after his record long run as prime minister he hasn't been able to come up with a real solution yet.

No matter who comes out on top in this election or by what margin, Israel needs to implement a viable solution to this challenge. Otherwise, the country will be facing problems that far outweigh the annoyance of all-too-frequent elections.

Jake Novak is a political and economic analyst at Jake Novak News and former CNBC TV producer. You can follow him on Twitter @jakejakeny.