Benjamin Netanyahu’s tenure as Prime Minister of Israel finally appears to be coming to an end, as an opposition coalition has declared that it has enough seats to unseat the former commando. But, just because Netanyahu’s record 12-year tenure is ending, Palestinians may not have much reason to rejoice.
While it is true that an Arab party — Raam — will be part of the ruling coalition for the first time, not much is likely to change, as the incoming prime minister, Naftali Bennett, is himself a right-winger and former Netanyahu ally. Bennet was in Netanyahu’s cabinet in various capacities, including as defence minister from 2019 to 2020.
However, the presence of Raam means that Bennet was willing to walk back his previous positions and agreed to a policy of not annexing any West Bank territory or building any new settlements during his premiership. However, Bennet is also an opponent of the two-state solution, and he has not explicitly walked back that position. On the Arab side, Bennet recently credited Raam leader Mansour Abbas for not bringing up any nationalist demands during negotiations and focusing on a much more pragmatic demand — the need to improve conditions for Israeli Arabs.
Meanwhile, Netanyahu continues to remind why he is considered one of the world’s most far-right leaders, calling on other right-wing members of parliament to reject the ‘left-wing’ coalition and accusing Raam of being “terrorist sympathisers”.
Nevermind that, as discussed, the eight-party opposition coalition includes a combination of all kinds of parties, including former Netanyahu allies, united only by their spite for the corruption-scandal plagued PM. In fact, some reports suggest that Netanyahu wanted to approach Abbas to help him form a government. He only backed off when his own even farther right allies — the outright racist Religious Zionism Party — refused to sit with Arabs.
This is the same Netanyahu who accused his own Arab Israeli citizens of wanting to “exterminate all Jews” and who instigated the recent criminal bombing of Gaza in an unsuccessful attempt to push hawkish parties to join his coalition. Remember this, because Netanyahu and his loyalists can and will commit war crimes to keep or retake power.
Economy: in right direction?
Prime Minister Imran Khan must have been breathing easy – for the first time since coming to power some 34 months back. An estimated GDP growth rate of 3.94% in the ongoing fiscal year has provided the PM and his team the much-wanted respite on the economic front. The PTI economic polices came in for harsh criticism from the opposition and experts for dragging down the growth rate to minus 0.47% in its first two years in power from a sizeable 5.6% that its predecessor, the PML-N government, had left it with. However, against all expectations, the incumbent government not only managed to raise the GDP growth rate, a key indicator of economic progress, to nearly 4%, but is also confident of lifting it further to 4.8% in the coming fiscal year and to 6% in the year after – which is going to be the election year — to make a perfect case of its re-election.
Low-base effect is sure one factor behind such a steep rise in the economic growth rate. But it is the PM’s insistence on avoiding Covid-related closures in the country – coupled with a several stimulus packages offered by the central bank – that kept the wheel of the economy moving even in the times of the raging pandemic. No wonder, a significant growth was registered in the large-scale manufacturing sector as well as the wholesale and retail trade. The amnesty offered in the real estate sector also triggered an unusual construction activity across the country and thus effected record sales of cement, steel and other building materials as well as finishing goods. On top of that, “bumper” crops of wheat, rice, maze and sugar cane have been reported, lifting the growth numbers to a showcase level.
The government thus insists that the economy is now heading in the right direction. While some analysts do agree with the government, the fact is that apart from the GDP growth rate, current account is the only macroeconomic indicator that offers something to write home about – even though the current account too has been managed through import compression rather than a raise in exports, something that caused a loss of government revenue, only to be compensated through additional taxation. Of late though, a widening trade gap – of about 29.5% or $6.2 billion in the first 11 months of the ongoing fiscal year – is taking a toll on the current account balance, which is expected to remain in a deficit of $4 billion to $6 billion by the end of June. Imagine what would have been the current account situation, if it had not been for an unprecedented growth in remittances – of about 29% or roughly $5 billion during the first 10 months of the ongoing fiscal year. Besides that, FDI has fallen by 35% in the first three quarters this fiscal. And the total public debt has crossed the critical debt-to-GDP level. The government is also clueless on how to tackle the galloping circular debt and the SOEs losses.
However, what poses the government its biggest challenge is the rising rate of inflation – something that has a make-or-break potential regarding election matters. First and foremost, the government must focus on the factors that are causing price hike, like high power and gas tariffs, costlier petroleum products, and the expanded rate and base of GST. The government must also keep a close eye on the demand-supply position and improve upon its market surveillance mechanism. A common man has just one yardstick to gauge a government’s performance: his kitchen bill.
