Leading Israeli business people are warning that Israel's second coronavirus lockdown - set to begin Friday as infection rates continue to soar - will have a disastrous effect on the country's economy.
“The economic situation is as serious as the health situation,” says Roee Cohen, president of Lahav, the Israel Chamber of Independent Organizations and Businesses.
According to Cohen, small businesses in Israel are still trying to recover from the first lockdown.
“The government needs to find a solution for both issues,” he said.
Under the terms of the lockdown decided Sunday, people will have 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 and 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.
After the lockdown, the government will return to the “traffic light” plan already in limited effect, which categorizes cities and neighborhoods by color based on their coronavirus infection rates.
A total of 30,000 businesses already closed this year, Cohen says, adding that some 40,000 to 50,000 businesses close in a typical year, while 80,000 are predicted to go under in 2020.
He cites eateries as an example of businesses that will suffer due to the new measures.
“What about the restaurants?” he says. “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 says 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 says.
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, says 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 says.
“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 says.
“Once you… uproot this motivation, you are going to have a big problem.”
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President of the Federation of Israeli Chambers of Commerce Uriel Lynn
(Photo: Aviv Gotlib)
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 says. “Once you cut this connection… this is the main problem.”
Article written by Joshua Robin Marks, reprinted with permission from The Media Line