TLR 196 – Where? Whence? Whither?

28^th  May 2020

This issue is tasked with picking up many threads after long disruption. Although we have been in contact via various virtual channels and will continue to be, only now has it become possible to write a coherent analysis addressing the three cardinal questions raised in the headline:

1. Where are we now? This question relates to every sphere of national activity, but especially to the areas this newsletter defines as B] Domestic Politics, C] Macro-economics and D] Corporate Affairs. With regard to the first, the formation of a new government, especially such a peculiar one, raises the questions of whether and how long it will survive and what it can or might achieve during its term of office. The latter two are dominated by the impact of the virus and the measures deployed against it, on the economy as a whole and on sectors and firms within it.
2. How did we get here? Chronologically, this should be the first question, but I will present it as where we are today versus where we were a few months or a year ago and where, consequently, we thought then that we would be today. In the political context, this discussion provides an opportunity to review how events in the domestic political arena unfolded over the 18-month period of interregnum and who (seems to have) won or lost along the way and in the result.
3. Where are we going? This is, as usual, the most essential but much the most difficult question. Since the very short-term outlook is largely subsumed into question one, I want to take the opportunity to present a scenario covering the medium- and even long-term on several key issues — including relations with the US and China; with the Palestinians, the Iranians and the Turks; economic growth, employment and Israeli technology; key sectors for the decade just started; and the prospects of the domestic equity and fixed-income markets.

That is a very wide-ranging agenda, which will perforce extend over several issues. This one addresses the first question which, if not quite straightforward, at least allows for some clear and definite answers.

 

CONTENTS

1] Where are we now?

B: Domestic Politics

            A government, at last

C: Macro-Economics

1. Pre-existing conditions – positive…
2. … and negative
3. Ingrained survival instincts

 D: Corporate affairs

 The quick and the dead