From Wikipedia, the free encyclopedia Privatization in Israel
Privatization in Israel
The privatization in Israel refers to the transferring or changes which occur in it are not considered Privatiza-
selling of a service or property owned by the Israeli gov- tion as it is described in this article.
ernment or any public organization to private owner-
ship. The meaning of the privatization is reducing the
share and level of intervening which is directly connect-
Public sector
ed with the Israeli government in the Israeli economy, in- The origin of the companies, like the rest of the compo-
creasing the portion and the economic activity of a pri- nents of the public sector in Israel, started in the period
vate group, on the control and ownership of the assets. of the Yishuv, which evolved in parallel with the state.
The inverse process to the privatization process is The structure of the Israeli public sector was designed
called Nationalization. during the pre-state period, a period in which the nation-
al institutions were established, which were designed in
a large extent continued to operate and become a major
Privatization processes part even after the establishment of the state. Through
The privatization processes in Israel intensified in 1986 the years, reciprocal ties and cooperation was formed be-
following the intensified privatization in Britain in the tween the public sector and the private sector. These pat-
1980s. So far around 90 government companies and sub- terns were manifested with the establishment of joint
sidiaries have been privatized in Israel, which produced businesses, along with various cases of transition from
for the country, between the years 1991 and 2003 – a rev- the private sector to the public sector and from the pub-
enue amount of 8,749 million U.S. dollars. lic sector to the private sector. The various parts of the
The privatization processes in Israel belong mainly to public sectors recognized the economic importance of
the following types: their activities, and it is difficult to distinguish between
• a gradual sale or dilution of the state’s holdings in the political motives and considerations and economic
the public body to the extent where the state would considerations. The two were, and would continue to be
no longer have a significant holding of the body. A interwoven with each other.
notable example for this is the gradual selling of the
Israeli telecommunications provider "Bezeq" and the Components of the public sector in Is-
gradual selling of the Israeli banks, which were rael
originally nationalized following the Israeli Bank
• The World Zionist Organization and the Jewish
stock crisis in 1983.
Agency for Israel
• A one-time sales or issuing all of the company’s
• The Histadrut
shares in the stock exchange. This is the method of
• Cabinet of Israel
action which is most common amongst the smaller
After the state of Israel was founded and the cabinet
companies or when there is a single buyer.
was established, many dominant institutions which were
• initiating privatization processes by means of
formed beforehand were transferred to its possession as
outsourcing, transferring of franchise, privileges,
an “inheritance”. The Israeli government like many oth-
etc., especially of certain services which are
er governments acts and intervenes in the economy of
consumed by government bodies. Such an action is
the state in order to realize major aims such as: ensuring
not considered privatization by the definition of the
competition, providing public goods, ensuring the exis-
Israeli government.
tence of information and preventing restrictions on the
• the disassembly of a governmental body completely
ability of the public to choose, ensuring the stability,
due to lack of need of its existence or losses which
growth and aid in low point periods and in times of
were made due to the existence of a competitive
crises.
market.
The public sector in Israel contains in it many non-
Many refer to the structural change which has happened
governmental organizations, and the entirety of the or-
in many of the kibbutzim in Israel "privatization of the
ganizations is not only a source of budgetary revenue,
kibbutzim", although this process does not in relate to
but also a source of expenditures. The flow of finance
privatization processes. The kibbutz is a private volun-
from various sources expands the boundaries of the pub-
tary association and not a public association, and the
lic sector and adds an important dimension to the Israeli
political economy.
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From Wikipedia, the free encyclopedia Privatization in Israel
The activities of the public sector are measured to a
large extent by the public consumption. A reduction or
Examples
increase in the consumption reflects the involvement ex- A partial list of the Israeli companies which have been
tent of the state in the Israeli economy. completely or partially been privatized:
The extent of involvement might derive from the se- Agriculture:
curity expenditures made by the state and the expendi- • Agridev ()אגרידב חברה לפיתוח חקלאי
tures made on immigrant absorption. • Weed Control Company ()החברה להדברת עשבי בר
Construction and infrastructure:
Implications of privatization • Efridar ()אפרידר
• Lod-Ramle Region Development Company (החברה
The privatization in Israel consists of ideological prob- )לפיתוח אזור לוד-רמלה
lems. The ruling between neo-liberal perceptions or so- • Industrial buildings
cial democratic welfare state perceptions, which are both • The Israeli construction center ()מרכז הבנייה הישראלי
opposite economic and social perceptions. • Housing and development company of Israel (שיכון
Arguments in favor of privatization: )ופיתוח לישראל
• Reducing government spending • Labour Housing company ()שיכון עובדים
• Promoting competition • Water works engineering of Israel (תה"ל - תכנון המים
• Maintaining a strong economy )לישראל
• Increasing efficiency and making services cheaper. Transportation and aviation services:
The supporters of privatization in Israel claim that re- • El Al Airlines (including Sun d’Or International
ducing the state’s involvement increases the involve- Airlines)
ment of individuals. Thus, promoting competition, en- • MAMMAN cargo handling terminals (ממן מסופי מטען
couraging investment, having a strong economy and re- )וניטול
ducing the state expenses - which would lead to cheaper • ZIM Navigation – the biggest cargo shipping
services. company in Israel, and 13th largest in the world.
Arguments against privatization: • Israel Shipyards – the biggest Shipyard in Israel
• The transferring of the capital monopoly into the ()מספנות ישראל
hands of a small group of wealthy private owners. Finance, banking and funding:
• It would harm the employees. • I.D.B Holdings ()אי.די.בי החזקות
• It would harm the effectiveness. • Union Bank of Israel ()בנק איגוד
• Losses of the government. • Israel Discount Bank ( – )בנק דיסקונט לישראלpartial
• It doesn’t always necessarily increase efficiency privatization
• Making the manpower cheaper and reducing it. • Bank Mizrahi Tfachot ()בנק מזרחי טפחות
• It would harm the recipients of the services. • Bank Hapoalim ()בנק הפועלים
The opponents of privatization in Israel argue that com-
• General Bank ()בנק כללי
panies would also be able to be effective under govern-
• Bank Leumi ( – )בנק לאומי לישראלpartial privatization
ment ownership. Privatization affects employees and
• The Israeli Credit Insurance Company (החברה
leads to the dischargment of employs, leads the workers
)הישראלית לביטוח אשראי
to choose to get early pension and salary cutbacks. The
• Otzar HaShilton HaMekomi ()אוצר השלטון המקומי
Israeli economy is gradually becoming controlled by a
• Industrial Development Investment Company
small number of rich families. The privatization of public
• "Yozma" Venture Capital Initiative ()יוזמה הון סיכון
services affects the public and especially the poor popu-
Natural resources:
lation, which are the main consumers. One of the main
• The National oil company ()חברת הנפט הלאומית
goals of the state is to take care of its citizens, people’s se-
• Israel Chemicals (Including more than twenty
curity, people’s education, to the profitability and to the
subsidiaries, such as the Dead Sea Works company,
preservation of the social community. A state which dis-
etc.)
claims those responsibilities violates its own principles.
• Lapidot (and its subsidiary Metsada)
The method which has become customary in Israel in
• Magen gas and crude oil resources company (מגן
the last decades is selling the control of the public assets
)משאבי גז ונפט
into the hands of capital owners, while other countries
• Nefta ()נפטא חברה ישראלית לנפט
rather choose to issue the company shares to the public
• Paz Oil ()פז נפט
and company employees.
• National Coal Supply Company
• Oil Refineries Ltd ()בתי זיקוק לנפט
Technology, Industry and telecommunication:
• Bezeq
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From Wikipedia, the free encyclopedia Privatization in Israel
•
•
Koor Industries ()כור תעשיות
MALAM Systems ()מלם מערכות
Privatizations planned in the
• Beit Shemesh Engines Ltd. (BESL) ()מנועי בית שמש near future in Israel
• Rafael Advanced Defense Systems Ltd. – partial
• Gapim ()גפים
privatization
• The Company for automation in the management of
• Shore-Van screenings ()שור-ואן הקרנות
the local government (החברה לאוטומציה במנהל השלטון
Governmental Authorities:
• Prisons – at this stage a single privately-operated )המקומי
prison is approved. • Tadmor ()תדמור
General: • Israel’s Postal Services Ltd. ()חברת דואר ישראל
• The Israeli Tourism School ()בית הספר לתיירות בישראל • Israel’s Postal Bank ()בנק הדואר
• The governmental company for medallions and coins
()החברה הממשלתית למדליות ולמטבעות See also
• Tourism Development Corporation (חברה לפיתוח מפעלי
• The Shakshouka System – an Israeli documentary
– )תיירותwas dismantled
film from 2008 which focuses on the allegedly Crony
• Katit ()כתית
capitalism in Israel.
• Weizmann Institute Press ()מוסד ויצמן לפרסומים
• Shekem Ltd. and Shekem real estate (שקם בע"מ ושקם
)נדל"ן
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Categories: Economy of Israel, Government of Israel, Privatization in Israel
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