Shmuel Slavin has many years of experience in Israel’s commercial and financial sphere under his belt, not the least of which was his service as Director-General of the Finance Ministry and the Labor and Welfare Ministry, as well as serving as Economic Advisor to Prime Minister Yitzchak Shamir. He is also a researcher for the Haredi Institute for Public Affairs.
On Sunday, he told Makor Rishon: “The talks about an impending economic disaster are nothing more than sheer nonsense.”
Slavin noted: “We, the professionals, know how to look at the past and analyze the present; but anyone who predicts the future is doing so with a political bias.”
“I would advise the media to ask all the experts what their political position is. Here I’ll tell you in advance: I support the reform––it’s not the ten commandments––but by and large I am in favor of it. In my opinion, not only will it not harm, but it will also benefit Israel’s economy.”
How would judicial reform help the economy?
“I talk to lawyers who complain that since Aharon Barak’s Apropim ruling was accepted (a ruling that states the judge must investigate the presumed intent of the parties to a contract, without being limited to its language) they have been losing clients,” Slavin explains. “They tell me, we sit on drafting a contract for dozens of hours at a cost of a lot of money, to be as precise as possible, and then Aharon Barak arrives and with one strike of his pen dismisses what’s written in the contract and decides what’s important is the intent of the author.”
“It’s no wonder most foreign companies insist that if the business goes to trial, it would be in their country and not in Israel. In London, what’s written in a contract is what is,” he says, adding: “The procrastination here in Israel is also difficult since the judges write poetry instead of judgments.”
In recent years, Slavin has headed the real estate investment trust company Sella Capital Real Estate Ltd. which last year recorded a 24% revenue increase and its stock value increased by 21%. From an investor’s point of view, he is convinced that when people in control of the big companies will understand “the joke’s on them and they’re going to lose a fortune, they themselves will tell the protesters, ‘Guys, enough is enough.’”
According to Slavin, Israel enters the judicial reform in excellent shape. “They’re threatening that the credit rating services will lower Israel’s rating. In reality, they check many parameters in each economy,” he notes, “especially the debt-to-GDP ratio.”
The debt-to-GDP ratio is the ratio between a country’s government debt and its gross domestic product. A low debt-to-GDP ratio indicates an economy that produces a sufficient amount of goods and services to be able to pay its debts without incurring new debt.
Israel has one of the very best debt-to-GDP ratios in the OECD. Japan has a 164 ratio, Singapore––that economic miracle––is at 126. The US is at 110, and the UK at 90.
The same goes for Israel’s rate of inflation which is the third-lowest, behind only Japan and Switzerland.
Israel’s rate of growth last year reached 6.5%, among the highest in the world. Its unemployment is among the lowest in the world, and it is sitting on $202 billion in reserves.
In other words, investors would be criminally stupid to keep their money out of Israel because it is changing the composition of its committee to elect judges.
“After the reform is passed, the credit rating services will see there’s no revolution here, but necessary minor amendments of the method for electing judges, as well as consolidation of the universally-accepted principle that the courts cannot alter constitutional laws,” Slavin says.
“If anyone thinks the world is interested in the method of selecting judges, it’s nonsense. What we have in Israel are political demonstrations of a hegemony that wants to maintain its power. History knows uprisings of the lower classes, but this is the first time that those who revolt are the privileged rich.”
When asked about the petition by some 270 economists, among them Nobel laureates, against the judicial reform, Slavin responds: “How come they didn’t contact me? I have advantages that others don’t. I was the director-general of two ministries, including the finance ministry, I was an advisor to the Prime Minister, and I founded a company. So, you can’t say I don’t understand economics. They didn’t contact me because they knew that politically I didn’t agree with them.”
This content was originally published here.
