It was the eve of the 2009 election, and the Israeli economy was reeling from a recession. At the time, the newspaper Calcalist asked Labor Party Chairman Ehud Barak how he intended to restore the economy if elected prime minister. Barak spoke of a war against regulations and of raising the deficit, but he also presented another tool not in the standard economic toolkit. He called for “advancing negotiations with the Palestinians and breaking free of the diplomatic stalemate," saying, "We will submit a plan for a comprehensive regional peace with a strong economic footing. That kind of diplomatic plan would make a decisive contribution to promoting investment in the region and boosting the economy.”
For years, the link between diplomatic prospects and the economy was a major motif of the center-left agenda, a connection particularly visible after the signing of the Oslo Accord and the peace treaty with Jordan. When the Israeli market opened to foreign investment, industry flourished and the economy grew accordingly. In contrast to that period, the worrying figures released May 16 by the Central Bureau of Statistics show the country potentially sliding toward a recession. Nevertheless, the political discourse hardly touches on such links.
