Finance Minister Avigdor Liberman has a catchphrase for any time he is asked how he is doing. “Gan Eden,” he says, a reference to the heavenly Garden of Eden and his way of saying that everything is just fine.
That is not the Liberman we met with last week for a long conversation at the Finance Ministry. This Liberman was concerned and full of dire warnings. The world, he told the Magazine, needs to wake up immediately because if it doesn’t, it will be thrown into a dark period of chaos and anarchy.
There are, he explained, four catalysts behind the chaos.
First, he said, is the emergence of more technology driven by artificial intelligence. There are young hackers, he said, who are capable of doing things with their computers and cellphones that were unimaginable just a few years ago.
The US, he added, stopped the use of 5G – fifth-generation technology standard for broadband cellular networks near airports – over concern that people would be able to take over planes with cellphones. In a decade, he said, every kid will have software like NSO’s Pegasus on their phones to be able to use as they desire.
“These are technological developments that have no oversight or coordination,” he said. “There is no form of global regulation and it takes us to places that are potentially frightening.”
The second catalyst, Liberman continued, is the rise of cryptocurrencies across the globe. There are, he noted, 15,000 different types of cryptocurrencies today.
“Every few people get together and make a digital currency,” he said. “There are crypto markets in Iran to evade sanctions and to launder money and it can be used to finance terrorism and crime.”
Countries like Israel that have advanced technology, he said, can meet the challenge. “But there are 193 countries in the United Nations and 140 of them have no way of confronting this,” he explained.
What happens, he cautioned, if massive multinational corporations come out with their own currency?
“It doesn’t make a difference if it is Tesla or Amazon or another company. The moment these companies create their own currency, then some country out of the 140 will see its citizens lose trust in their economy, their leadership and the state itself.”
THERE IS no single monetary entity that can regulate 15,000 different digital currencies especially when countries are doing with them what they want, Liberman said, referring to El Salvador, which has made Bitcoin an official currency – in contrast to Thailand, which has outlawed its use.
The third catalyst, according to Liberman, is what is happening on the Darknet, a gathering place for criminals and terrorist activities. Liberman said that he became familiar with the Darknet from his roles as defense minister and chairman of the Knesset’s Foreign Affairs and Defense Committee.
“This becomes all the more complicated with far-reaching consequences due to the ability to spread fake news and conspiracy theories,” he said. “What we are seeing on conventional networks is child’s play compared to the Darknet where there is a concentration of criminal psychopaths, terrorists and spies sitting on the same network.”
The fourth catalyst, he explained, is the breakdown and collapse of international order and systems.
An illustration of this, he said, can be seen in Vienna where the world superpowers continue to negotiate with Iran in pursuit of a new nuclear deal. They speak to the Iranians at the same time that Iran is supplying the Houthis in Yemen with ballistic missiles and drones and ordering them to attack the United Arab Emirates.
“They don’t even say ‘Nu, nu, nu’ and are afraid to say that the Houthi attacks are being carried out by Iran,” Liberman explained. “At the same time, North Korea is testing missiles. No one is accountable anymore. And in Afghanistan, the Taliban has taken over. You see a weakness of the global superpowers and their ability to create order and values.”
Altogether, Liberman said, this creates chaos and anarchy.
So, what can be done, we asked.
“We need to rise above the regular daily problems in each country to stop these trends,” he answered. “There is only one chance and that is to regulate and coordinate together with all of the big players working in unison.”
What that means, he explained, is getting the G7 – an inter-governmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – to work with Russia and China to find ways to regulate a new world order and to stop the slide toward global chaos.
“You need all of the players together to create uniform regulation in all of these different fields since if you don’t, everything will move in directions that will make the movies we see in Hollywood turn into a reality,” he warned.
Liberman is not sure his plan will work but he believes that the world is at an inflection point and now is the time to act.
He said that he recently met with the president of Tel Aviv University and asked him to convene the brightest minds on campus to build simulations and models for where the combination of technology, cryptocurrency, Darknet and collapsing world order will lead the world.
“There is time to act,” he said. “I hope they do.”
TURNING TO the Israeli economy, Liberman expressed optimism that the coming year will see continued growth. By mid-February, he expects to see economic parameters – credit card transactions, incoming and outgoing flights, road traffic and trade – returning to normal numbers across the country.
He is also not overly concerned with increasing inflation across the globe. The US, for example, recently hit a 39-year high of 7% but Israel, he claimed, is entering this situation from a positive position due to high employment rates.
But, we challenged, the average person looks at her or his own pocket and sees rising costs of living and prices of basic goods. On Monday, the Central Bureau of Statistics said that Israel’s Consumer Price Index rose 2.8% in 2021 and increased another 0.1% to 2.9% this year as of January 30.
“We are trying to find a balance and to stop the rise in [the] cost of living,” he said. “We took a lot of steps to improve the situation.”
He referred to the three promises he made to voters ahead of the last election – to pass a two-year budget, to lower the cost of living and to increase the salaries of IDF soldiers.
“We said we would do these things and we did,” he continued.
“We succeeded because we made three courageous decisions in contrast to the previous government: We stopped the payments to workers on unpaid leave, we said there would not be lockdowns and that we will live alongside corona and, to the credit of the prime minister [Naftali Bennett] who was the first to push this, we were the first country to give the third booster shot.”
Liberman dismissed the criticism that has been leveled against him by small business owners for the slow pace of government assistance through the recent wave of Omicron. Last week, he released a series of new aid measures to help businesses and the self-employed. As part of the plan, financial relief worth more than NIS 1.3 billion will be granted. It will cover the adjustment of bureaucratic procedures in businesses’ favor, aid in obtaining state-guaranteed loans and assistance to small- and medium-sized exporters.
“In the Finance Ministry, everything is built according to monthly and quarterly financial reports,” he said. “What were we supposed to compare losses to? There has been only a month and after one week people started to demand compensation. What should we have given for? One month? One week?”
While calling on business owners to have a bit of patience, Liberman is also releasing funds. He instructed the ministry to make immediate payments to government vendors instead of the usual 90-day wait time before paying bills. He also ordered the Tax Authority to release advances of half a billion shekels to small businesses.
“We are trying to ease the pressure,” he explained.
The next tourism season is Pesach, we said. Can you guarantee that tourists will be able to enter Israel?
“Yes, with a high probability,” Liberman replied. “With all of the necessary caution, based on the models of Omicron, people will be able to enter without any restrictions.”
LIBERMAN WAS one of the architects of the rotation agreement between Prime Minister Bennett and Alternate Prime Minister Yair Lapid. He revealed that he intends to take concrete steps to ensure that the rotation in the Prime Minister’s Office takes place on time on August 27, 2023.
In May, he will bring the state budgets for 2023 and 2024 to a vote in the cabinet. He vowed to pass the two-year budget into law in the Knesset by September, before the Rosh Hashanah holiday and long before the December 31 deadline that could have been extended to March 31 to prevent the government from falling automatically.
“This is what will provide the stability and certainty we need,” he affirmed. “The rotation will happen. I have no doubt. We saw what happened where there was no state budget.”
There were fears inside the coalition that MKs in the coalition would use the budget to bring down the government before the rotation to prevent Lapid from becoming prime minister. The previous government of Benjamin Netanyahu and Benny Gantz was toppled that way.
While Bennett said in interviews last weekend that he believed Netanyahu’s rejection of the plea bargain agreement in his criminal cases that he was offered strengthened the coalition, Liberman also said that if he had taken the deal, the coalition would have persevered.
“If Bibi would have left, it would have strengthened our coalition,” Liberman said. “It would have caused more than three months of civil war in Likud.”
He cited examples of Likud MKs issuing threats. For instance, MK David Amsalem said he would not accept it if his longtime nemesis, MK Nir Barkat, won the Likud leadership race. United Torah Judaism and Shas MKs also said they were not obligated to Likud, only to Netanyahu himself.
“[Netanyahu] will now have to go to trial,” Liberman said. “The new attorney-general cannot settle for less than deeming Netanyahu’s crimes as bearing moral turpitude, so it is almost final that there will not be a plea-bargain agreement.”
Liberman suggested that when Netanyahu leaves politics, there could be a realignment that he refers to as a political big bang.
“There are many people who aren’t in Likud because of Netanyahu,” Liberman said. “I never had a problem sitting in a coalition with Likud, but I will never sit again with Netanyahu.”
He said a former Likud MK suggested to him conducting an open leadership primary of Likud, Yamina, New Hope and Yisrael Beytenu. But he responded that the idea is irrelevant because he does not believe Netanyahu will leave the Likud leadership, even if it means allowing Lapid to become prime minister.
He voted for an investigation into Netanyahu’s role in the so-called Submarine Affair two weeks ago, even though he was familiar with the case as a former defense minister and foreign minister and was unimpressed.
“They won’t find anything, but there are too many clouds over the issue so I voted for the probe,” Liberman said. “We need to put a period on that entire episode.”
But Liberman ruled out expanding the coalition by bringing in MKs from haredi parties, due to their uncompromising financial demands. He noted that when the haredim did compromise on the Western Wall agreement when Netanyahu was prime minister, they then backtracked, and in July 2018 when he passed the first reading of the haredi draft bill, they backtracked on that, too.
Like Bennett, Liberman said there was trouble implementing the Western Wall agreement. He said he still thought it could get done, but only after passing Religious Services Minister Matan Kahana’s conversion reform bill into law by the end of the Knesset’s winter session that concludes on March 13, and then the IDF draft bill.
“There needs to be an ability [to implement] the agreement,” Liberman said. “We passed the kashrut reform, then comes the conversion bill and the draft bill, which are all in the coalition agreement. Only then will we get to the Kotel Deal, which is not in the coalition agreement.”
Liberman said he had no regrets about sitting under Bennett, even though his Yamina controls one less Knesset seat than Liberman’s Yisrael Beytenu.
“I am doing the right thing in leading the Finance Ministry at this tough time,” he said. “With all modesty, I didn’t see a candidate better than me. Our economy is functioning. I want this government to last four years, pass the rotation, pass the budget. If we last four years, the country will look different.” ■