Facing New Lockdown, Israel’s Captains of Commerce Talk Consequences
Many businesses are seen at risk of closure from what is being described so far as the world’s only case of a second nationwide shutdown due to the coronavirus pandemic
The top businessperson in Israel is warning of dire economic consequences from a second nationwide lockdown, with the government on Sunday having approved a three-week closure starting this weekend due to spiraling cases of coronavirus.
In an interview with The Media Line, Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, emphasized that the greatest risk from yet another lockdown is the psychological impact of making business owners again shut their doors to customers.
“All businesses are really motivated by individuals,” Lynn told The Media Line.
“If you want to see a business materialize or come into the world, you need to have a certain incentive [or] initiative by an individual. It does not happen by itself,” he said. “Once you… uproot this motivation, you are going to have a big problem.”
Trade and services in Israel account for 69% of the business GDP and employ 73% of the people working in the private sector, according to Lynn, who maintains that these spheres are the main driver of the economy, with private consumption in Israel having been at NIS 760 billion, or about $220 billion, last year.
“When you talk about trade and services, the most important part is the connection that you have with the general public,” he notes. “Once you cut this connection… this is the main problem.”
When you talk about trade and services, the most important part is the connection that you have with the general public. Once you cut this connection… this is the main problem
It is estimated that each day of a total national lockdown will cost the economy NIS 1.8 billion. What’s more, the Finance Ministry warned last week that a nationwide closure would result in the loss of 400,000 to 800,000 jobs.
The lockdown decided by the cabinet on Sunday will force people to remain within 500 meters from home save for trips to the supermarket, pharmacy or doctor. Travel between cities and social gatherings will be banned. Schools will be closed except for those with special education students. Nonessential businesses are to be shuttered, with restaurants available solely for delivery or takeout.
At the end, the government will return to the “traffic light” plan already in effect, which categorizes cities and neighborhoods by color based on their coronavirus infection rates.
The lockdown proposal is controversial. Yaakov Litzman, a senior member of the ultra-Orthodox United Torah Judaism party, resigned as housing and construction minister on Sunday, saying it will unfairly target religious people during the High Holy Days of Rosh Hashana, Yom Kippur and Sukkot.
The country’s ultra-Orthodox sector is among the hardest hit by the pandemic, with most families being large and living in crowded conditions, and many rabbis downplaying the authority of the state. In addition, the vast majority of religious Jewish life is group-oriented, making the coronavirus clampdowns particularly hard on the community.
Health Minister Yuli Edelstein had warned at the beginning of Sunday’s cabinet meeting that he would entertain no major changes to the plan, that it would basically be all or nothing.
As of Sunday, the total number of coronavirus infections in Israel stood at 153,759, with 513 patients listed in critical condition and 139 on respirators, according to the Health Ministry. A total of 1,108 people have died from the coronavirus.
Roee Cohen, president of Lahav, the Israel Chamber of Independent Organizations and Businesses, told The Media Line that small businesses in Israel were still trying to recover from the first lockdown.
A total of 30,000 businesses already closed this year, according to Cohen, who said that in a typical year, about 40,000 to 50,000 businesses close, adding that this year, 80,000 are predicted to go under.
“The economic situation is as serious as the health situation,” Cohen said. “The government needs to find a solution for both issues.”
The economic situation is as serious as the health situation. The government needs to find a solution for both issues
Cohen cites eateries.
“What about, for example, the restaurants?” he asked. “They have got all kinds of supplies they bought, and now they need to throw everything away?”
The supply issue is of particular concern for Orit Dahan, owner and manager of the Piccolino Restaurant in Jerusalem.
Dahan told The Media Line that the restaurant places orders in advance and that if there is uncertainty, it won’t be able to order the correct amount of produce, meaning she might have to throw away or donate large quantities of food.
During the first lockdown in March, the eatery had to toss thousands of shekels worth of food. On the flip side, if a restaurant that remains open fails to order enough food, it might not have enough to prepare for customers.
“The uncertainty keeps us worrying instead of working and welcoming guests,” she said.
The uncertainty keeps us worrying instead of working and welcoming guests
Dahan has four children, ages 23, 16, 14 and 5½. Her oldest daughter is renting an apartment, but the rest of the kids are at home.
“They are learning on Zoom. They have one day a week with Zoom, and then the rest of the day they are in school. If there is a lockdown, they will be on Zoom all day long,” she notes.
Dahan says her children can handle remote learning by themselves, except for her youngest, whom she can take care of because she does not work in the restaurant.
“But if you have small kids at home and you are working, it’s a problem,” she notes. “A big problem for parents.”
In Israel there are about 2,000 children who are officially blind, and 2,000 more with visual impairments, with most of them studying in mainstream schools and thus impacted by the closures, according to Yael Weisz-Rind, executive director of Ofek Liyladenau – Israel National Association of Parents of Children with Blindness and Visual Impairments.
“When we had the first lockdown, the impact on children with visual impairments and blindness was very heavy and very damaging because of the lack of clarity of the various restrictions,” Weisz-Rind told The Media Line.
“It became very challenging both for parents and children,” she stated. “Our children are very much reliant on touch and movement and feeling things and being able to hold hands with people who help them to maneuver and compute.”
Our children are very much reliant on touch and movement and feeling things and being able to hold hands with people who help them to maneuver and compute
Ofek Liyladenau jumped into action during the first lockdown, including by opening an emergency center to support students and parents, setting up a hotline with social workers and psychotherapists, offering 26 webinars and providing entertainment and leisure activities for children to pass the time.
Daily protests have been taking place outside Prime Minister Binyamin Netanyahu’s official Jerusalem residence and across the country. Will they be halted by another lockdown?
Asaf Agmon, one of the organizers of the demonstrations, told The Media Line that the Supreme Court had previously ruled in favor of allowing protests, adding that the lockdown itself is politically motivated.
“You can see from what the heads of all our hospitals are saying, that there is nothing to justify all this drama that will cause huge damage, a crisis in our economy,” Agmon said. “[Netanyahu] is trying to stop the protests, but he will not be able to.”