Econ Ministry director-general: Prices will drop due to reforms

"I’m convinced that prices will fall thanks to reforms we initiated, and disposable income will also rise. We’ve reached a crossroads where we see a mature economy that can now address structural problems. Removing obstacles will lead to change, and prices will fall even though it takes time,” said Dr. Ron Malka, Director General of the Ministry of Economy and Industry, to Maariv.

He added, "The government formed after the elections should adopt the plans we built as part of a deep strategic move, led by current Economy and Industry Minister Orna Barbivai, which is supposed to move the Israeli economy forward and in particular address the extremely high cost of living.

"It’s true that I received the dubious honor of being the representative of one of the most expensive countries in the world, when Tel Aviv became the most expensive city in the world according to an economic rating published several months ago," he continued. "I ask how is it possible that two normative spouses (each with an average salary) fail to finish the month despite the increase in disposable income?”  

Removing obstacles will lead to change, and prices will fall even though it takes time.”

Dr. Ron Malka, Director General of the Ministry of Economy and Industry

Israel's economic accomplishments 

He said that if prices are high, it doesn’t help if his salary is higher. And yet, what Israel has accomplished is no less wonderful. When he was Israel's ambassador to India, which has a fifth of the world's population, he was accepted like a representative of a magical country everywhere he went with applause and drums.

Malka continued that it’s important to remove barriers and legal obstructions that have caused prices to be high, and the ministry has done this. Structural problems have stifled competition. 

Protecting industries has caused problems

Because of the desire to protect industry and agriculture, indirect barriers were imposed such as purchase taxes, unique standards and more, which were designed to protect the economy but created a lot of problems.

He’s frustrated that the reforms aren’t yet reflected in daily economic life: “We’re fighting bureaucracy, and those who benefit from this distorted state of prices are monopolies, which have political power and the ability to influence, delay and postpone. But I don’t have the privilege of being frustrated.”

Malka concluded: "The Carrefour chain entered Israel with our help when we had confidential contacts with it. But this is only the beginning. The Yeinot Bitan chain will allow its stores to become part of Carrefour, but we want to increase competition independently, not through another chain. Other retail chains in Europe and the US want to enter Israel, and I won’t mention oil.”