Netanyahu’s right-wing government sworn in in Jerusalem

Tech industry leaders, who typically do not comment on political or religious issues, fear the country could become less attractive to investors. In an open letter, more than 100 top startup and venture capital fund officials warn that the far-right and ultra-Orthodox are jeopardizing Israel’s position as a leading tech nation.

Among other things, they are concerned about the plans to weaken and politicize the justice system, the announced massive boost in funding for ultra-Orthodox schools where subjects such as mathematics or English are not taught, and the announced repression against the LGBT community and the Arabic-speaking minority. “This is the biggest threat to Israel’s tech industry, and therefore the economy as a whole,” says Amir Mizroch, who advises Israeli companies on global expansion.

Half of Israeli children are already receiving a Third World education. The children from the religious schools will later not be able to support the economy as adults. Tel Aviv economics professor Dan Ben-David

In the medium term, says Tel Aviv economics professor Dan Ben-David, the country’s “human capital” is at risk. “Half of Israeli children are already receiving a Third World education,” he told Handelsblatt. The problem will be exacerbated under the new government because ultra-Orthodox religious schools, which focus on Bible teaching, will receive more funding.

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“The children who are educated there will later not be able to support the economy as adults,” argues Ben-David. It is also becoming increasingly clear “that many of them have no idea about the basic principles of democracy”.

Netanyahu’s ministers, who will be responsible for economics and finance in the future, are also considered inexperienced when it comes to economic issues. For example, Bezalel Smotrich, the new finance minister, has brought religion into play as a promising strategy. It’s time to try something new – and go back to the Bible for economic policy.

Analysts in Tel Aviv suspect the envisioned use of scriptures could prompt rating agencies to downgrade credit ratings — and hope Smotrich will not act on his announcement.

Because Netanyahu’s new government has placed the expansion of settlements in the West Bank at the top of its list of priorities, the country is also on a collision course with its closest ally, the tech industry complains. In fact, the US government has declared that it strictly opposes settlement expansion.

In addition, Jerusalem’s expansion of settlements would offend American Jews, who mostly belong to liberal reform communities.

Concrete warnings are already available. Norway’s sovereign wealth fund plans to review its exposure to Israel and stop investing in companies involved in settlement construction in the West Bank.

He has announced this before. But observers in Jerusalem assume that he will now subject his $1.3 billion portfolio in more than 80 Israeli companies to stricter inspections.

Think tank sees democracy in danger

The Ministry of Foreign Affairs is preparing detailed answers on this issue with the support of Israeli and international legal advisers and the companies concerned, writes the Israeli business newspaper Globes. The daily fears that other European funds and companies could stop investing in Israeli companies if there is a significant expansion of Jewish settlements in Judea and Samaria.

“We have never seen such a wave of legislation,” says Amir Fuchs of the Jerusalem think tank Israel Democracy Institute. He describes the proposed changes as a “critical blow to democracy”. Proposed legislation would aim to weaken the judiciary and give politicians more powers in law enforcement.

Israel’s tourism industry fears severe losses because the new government wants to allow business owners to refuse services based on religious beliefs. President Isaac Herzog, the Attorney General and senior officers have also voiced their concerns about the announced plans and laws.

The army chief of staff called Netanyahu to warn him about a law that would put military sectors in the West Bank under the direct control of one of his ultranationalist partners.

Netanyahu faces corruption charges, which he denies and which, if convicted, could result in lengthy prison terms. Most of his former center and left spectrum partners have declined to join him because of the process.

No one has been in office longer than Netanyahu

Netanyahu is therefore dependent on his far-right partners and has no hope of coming to power without them. That puts him in a weak negotiating position, say political observers.

It is the sixth government that Likud leader Netanyahu is forming. The former long-term prime minister is returning to power after a year and a half in opposition. In Israel’s history, no one has been in office longer than the 73-year-old.

Netanyahu repeatedly emphasizes that he will set a moderate agenda himself and not be guided by his radical partners. He began distributing ministerial posts within his own Likud party on Wednesday. For example, Joav Galant is to become Minister of Defense and Jariv Levin Minister of Justice.

The new government has 64 out of 120 seats in parliament. Half of them belong to Netanyahu’s ruling Likud party, the other half to the extreme right-wing Religious-Zionist Alliance and two strictly religious parties. Netanyahu’s camp had won a clear majority in the November 1 parliamentary elections.

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