Norway, the United Arab Emirates, Canada, Azerbaijan and Russia are among the mineral-rich countries that have established sovereign wealth funds to distribute profits from natural resources among their citizens. Such funds are designed with the next generations in mind, to prevent overvaluation of the local currency and to channel revenues into fueling economic growth and spending on fields like education, health and welfare. Israel established its statutory wealth fund seven years ago, but the promises of billions of shekels in revenues have failed to materialize. The fund has not even been fully established amid the low profits claimed by the companies extracting the gas from the reservoirs.

Exploitation of these offshore Mediterranean gas fields began in the middle of the previous decade, and according to 2014 assessments were expected to yield revenues of 260 billion shekels ($81 billion). The forecast stipulated that the sum would depend on the amount of gas produced and on global gas prices.

The 2014 law governing gas exploitation mandates that 57% of taxes from gas profits would be placed in the Israeli wealth fund, which would invest the money in high-yield instruments and channel the profits into economic and social goals to be determined by the government in its annual budget. The Bank of Israel’s forecasts at the time put the amount of the fund at over 14 billion shekels ($4.4 billion) by 2022. However, Shlomo Phillip of the Tax Authority reported this week to the Knesset wealth fund oversight committee that as of the end of June 2021, the tax revenues from the profits of the energy companies had reached only 741 million shekels ($231 million). Phillip added his assessment that the amount would exceed the one-billion-shekel mark within the coming year, reaching the threshold amount for activating the fund.

Committee chair Mossi Raz said at the hearing that predictions of billions of shekels flowing into the wealth fund were erroneous and the mechanism should have been called the “poverty” rather than the “wealth” fund. Unless the law is amended, he added, there is no point in establishing the fund as the sums are so miniscule.