Despite extensive advance publicity and meticulous planning, just over 200 Israelis showed up for a demonstration on the evening of Dec. 22 opposite the government compound in Tel Aviv. Many of these protesters wore bright yellow vests in an effort to gain momentum from the successful social protests in France. But this failed in Israel, at least in terms of the protests’ strength. Though some of the price hikes were overturned, this has more to do with the near-hysterical response of Finance Minister Moshe Kahlon, who is operating under the shadow of an impending election sometime in 2019.
The Israeli protests were instigated by an announcement from the Electric Corporation Dec. 11 that rates would go up by 6-7%. In addition, about 10 major food producers announced over the past few months that their prices would go up. The rising costs in products by Tnuva, Tara and Gad Dairies, which dominate the dairy products and cheese markets, as well as by Osem, Unilever and Coca Cola, which dominate most other branches of the food industry, also resulted from the anticipated hike in the cost of electricity. This was further compounded by a seven-year freeze in food prices in Israel, in response to the economic and social protests in the summer of 2011, which drew their inspiration from similar waves of protests in Europe and the United States. Back then, the protests forced the government to appoint a committee of experts and even to adopt some of its recommendations. But the main impact of “the cottage cheese protest” was on sales by food manufacturers and on consumption in general, which declined noticeably. Since then, almost no significant price rises of food products in Israel were recorded. At the same time, the cost of electricity for consumers dropped by 10%, thanks in part to the transition from coal to natural gas. Compared to other countries in the West, electricity rates in Israel remained low, or at least relatively so.
It seemed as if the latest rise in prices would incite a new wave of mass protests. The first demonstration took place Dec. 15, but despite all the publicity just a few dozen people attended. It is best remembered for a photograph taken by journalist Tal Schneider of Globes, which showed a protester wearing what looked like a fur coat and carrying a designer handbag. While Schneider was quick to clarify that these were cheap knockoffs, the demonstration was quickly branded as the “Louis Vuitton protest.” But what hurt the protest even more was a report just a few days later that many of the organizers are active in the Labor Party and Meretz. In other words, the organizers are people on the left and “serial protesters” such as Eldad Yaniv, who has been a leading figure in anti-government protests for the last few years. It appeared later that among the groups that contributed to the organization of these protests, including the purchase of the yellow vests, were political organizations on the left and particularly groups aligned with the Labor Party.
Demonstrators carried signs attacking Prime Minister Benjamin Netanyahu and his government: “Crime Minister,” “Government of the Corrupt” and “Netanyahu, Resign!” The organizers made a point of placing activists who are not identified with them on the front lines, facing the press. These included David Mizrahi, who spoke about the growing crisis caused by the rising cost of living. Nevertheless, the organizers’ fingerprints were all over the protests. One activist actually quit, writing anonymously, “Like anything that could be good, they immediately started pushing the issue of right versus left and waving signs against Netanyahu. Eldad Yaniv and his gang have ruined any chance of change.”
The organizers’ insistence that this was an authentic consumer protest untinged by politics, rather than admitting that it was run by left-wing organizations and politicians from the opposition eliminated any credibility it might have had. The public voted with their feet. Shoshi Cohen, a resident of Dimona, said as much in a public radio interview. While she admitted that she supports protests against rising prices, she will not participate in them herself, because she votes for the right and does not want to join a call to bring down the government. “We need to pressure the finance minister to take more extensive action against the big companies, which act like monopolies. On the other hand, that does not mean that everything the government does is bad,” she said.
As the head of a minority party whose chance of succeeding in the next election is unclear, Kahlon was terrified. Perhaps it was because of all the attention the protest got in the media, but he was quick to announce the formation of a new committee to investigate the cost of living, even though findings from previous similar committees were already on his desk. He then announced that he would stop a rise in the tax on coal, which is still used in part to produce electricity, and that this, in turn, would moderate the anticipated rise in rates. What he ignored was the fact that this tax was intended to reduce the emission of greenhouse gases, to which Israel is committed by international agreements. He then met with the heads of Osem, one of Israel’s biggest food manufacturers, and managed to convince them to postpone their price hike in exchange for the possibility that tariffs on raw materials to produce food would be canceled.
The cost of the measures, such as reducing tariffs and taxes on the major corporations, could make the hole in the budget even deeper and ultimately fall on the taxpayer. Prices will only go up moderately in the near term, or at least until the election, but this will come at the expense of future costs and an increased burden on the citizens. Unlike Kahlon, Netanyahu barely addressed the entire issue. He simply promised that electricity rates would not go up sharply, immediately adding that prices have gone down over the past few years, while wages have risen.
Wages in Israel are, in fact, rising. At least this is true of the average wage, which has increased to 11,000 Israeli shekels ($2,900) per month and has risen by 3-4% in each of the last four years. Similarly, the international Gini Index, which looks at income inequality, has found that the income gap in Israel has declined over the last few years, even if it is still among the highest of the developed nations.
These figures can be added to other factors, which impacted what now looks like a failed new wave of protests, certainly when it comes to bringing the masses out onto the streets. Nevertheless, as new elections approach, opposition groups are likely to increase their attacks on the government in an effort to remove the Likud and the right from power.
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