In this first part of a series, Professor Karnit Flug, Governor of the Bank of Israel from 2013-18, takes us on a tour de force, analyzing the impact of the judicial reform overhaul program on the economy in Israel. She is currently VP Research at Israel Democracy Institute and Professor at Hebrew University. Flug has a unique perspective, having worked at the Bank of Israel for close to 30 years. Throughout her career she worked closely with Prime Minister Benjamin Netanyahu and shares her candid insights as to how the man has changed over the decades. She no longer recognizes the once thoughtful, rational Bibi who always made decisions – even if one disagreed – in the best interest of the state and on a rational basis. We touch briefly on her career arc at the outset – which is extraordinary for a woman in the male-dominated field of economics, and go on to cover so much, including the very sensitive topic of ultra-orthodox demands for increased economic entitlements. Professor Flug is extremely worried about what the future will bring. This first discussion was on July 20, just days before the Reasonableness Law was passed in the Knesset, setting off more fierce and widespread protests throughout Israel. Everything in Israel is uncertain now and markets do not respond well to uncertainty. It shows – in a weakened shekel and so much more. We get into US-Israel relations, the whole nine yards.
I suggest you take the time to read an article published on our website, stateoftelaviv.com, on November 15, 2022, entitled: “Fat Man, Thin Man. Will Netanyahu Upend his Economic Legacy?” The piece provides important background and is a really fascinating read. We’ve removed the paywall for a limited time for our listeners.
E19. Deep Dive with Prof. Karnit Flug, former Governor of Bank of Israel, on the Economic Impact of Israel’s Judicial Reform Laws