Good decisions are dependent on accurate and reliable information. An individual, a family, an army, or a country can only make sound choices and the right decisions if they have a clear and reliable understanding of the circumstances they are facing.
Eight months into Israel’s toxic debate over the judicial overhaul plan, it is emerging that in some cases honest information is being kept from the public and the decision-makers. In other cases, some information being disseminated is exaggerated and misleading.
Regarding the exaggerated and misleading information, Fitch Ratings announced on Monday that it affirmed Israel’s A+ rating with a “stable” outlook. Undoubtedly, many people, when they heard this, rubbed their ears in disbelief.
Months after opposition politicians, former Bank of Israel governors, former senior Treasury officials, hi-tech entrepreneurs, titans of industry, and leading businessmen and economists have been saying that the judicial reform will tank Israel’s economy in general and lead to a lowering of its credit rating in particular, along comes Fitch and maintains the credit rating Israel has enjoyed from its credit rating institution since November 2016: “A+” with the outlook stable.
Not only that, but the commentary that accompanied the announcement said Israel is a “resilient and high-value-added economy” with “strong external finances,” even though it has a “relatively high government debt/GDP ratio, ongoing security risks, and a record of unstable governments that have hindered policymaking.”
The institution said that even though the judicial reform “may have a negative impact on Israel’s credit metrics,” the current judicial reform measures taken “are unlikely to trigger a material exodus of talent and capital in the high-tech sector.”
That last sentence by one of the three most important credit rating institutions in the world is especially telling since it contradicts reports and warnings of a hi-tech brain drain and the relocation of all the profitable hi-tech firms abroad.
It just ain’t so, said Fitch.
While Fitch acknowledged that funds raised by the hi-tech sector have fallen off this year, it added: “In our view, the uncertainty generated by the judicial changes only partly explains this, with global trends accounting for a larger part, as investment was down in [the first half of 2023] in competing locations.”
Fitch’s announcement maintaining Israel’s credit rating despite the judicial reform follows similar moves by Moody’s and S&P earlier this year, although Moody’s warned of “negative consequences” for the country’s economy following the law’s passage to cancel the reasonableness standard last month.
Concerns of economic collapse
Among those who previously cautioned about dire economic consequences due to the judicial reform was Hebrew University economist Eytan Sheshinski.
Following the Fitch announcement on Tuesday, he said in a KAN Bet interview that the country’s general economic picture “looks very reasonable right now.” He added that he was “surprising myself by saying this.”
“All in all, the situation is not unreasonable, and I must say that the economic press painted things in darker colors than the data indicate,” he said.
And that is a sobering thought.
Why? Because if the economy is in a better state than the Kaplan Force and hi-tech leaders against the reform want the country to believe, then what else might not be as bad as is being made to appear? Perhaps the health system?
Along with warnings of the economy’s collapse, the country has been inundated over the last few weeks with reports of thousands of doctors on the verge of emigration. Actual numbers are hard to come by, with reports instead focusing on thousands who have signed up on WhatsApp groups interested in information about “relocation.”
But if the doomsday stories about the economy’s imminent collapse are proving somewhat exaggerated, then might not the talks of doctors leaving – or about to leave – en masse also be slightly overstated?
Those spearheading the protests have a vested interest in portraying the current situation in the country as dire, on the verge of collapse, to pressure the government to curtail the reform.
But for a genuine debate to take place about the potential consequences of the move, or the existing outcomes as a result of what has already been passed, reliable information is essential. But, to the country’s detriment, it is in short supply.
Impact on IDF
Nowhere is the existence of this information more critical than when it comes to the army. Despite pleas to keep the IDF out of politics, the army is in the middle of this very political debate, as hundreds of reserve pilots and thousands of other reservists have signed letters saying they will not show up for reserve duty.
But the number who have actually carried out their threats not to show up for duty, and the degree to which this has impacted the military’s preparedness for war, lie at the core of an unseemly conflict currently being played out in full public view between the political leadership, including Prime Minister Benjamin Netanyahu, and the top military personnel.
The military has publicly hinted that its readiness and preparedness for war have been compromised due to the absence of reservists and that the situation may only get worse.
Meanwhile, the political echelon is saying that this message not only plays into the hands of the judicial reform opponents and is politically motivated, but also damages Israel’s deterrence.
Ultimately it all comes down to having reliable information – essential to making wise decisions. The prime minister has reportedly blocked security officials from meeting with the security cabinet to give them an updated picture of the severity of the phenomenon, and some ministers have accused the army itself of overstating the problem.
This debate is seriously harmful. The government must know the problem’s true scope and trust the IDF to provide an accurate picture. Such unfiltered information is essential for the government to make educated decisions on how and whether to proceed. The current bickering erodes essential trust between the government and the IDF and erodes public confidence in both.
The public is also entitled to a transparent presentation of the information from authoritative IDF figures, such as the IDF spokesman, delivered in a matter that doesn’t reveal too much to the enemy.
Otherwise, leaks from “senior officials” or often alarmist speculation by former IDF senior officials and pundits pushing their own agendas are the only sources of information.
Honest, dependable information from those involved is vital for the public so it can determine whether the judicial reform is truly leading Israel off a cliff or whether the reports of the country’s decline have been greatly exaggerated.