1965-1966: The Israeli market is in a planned recession after a decade of prosperity and growing economical gaps. The Israeli market is very centralized. There are high columns, strict regulation of consumer goods, and high restriction on foreign currency trade.
1967: After the Six Day War, American consumer goods (Coca-Cola, etc...) start entering the market. The occupied Palestinians become a market for its Israeli goods, as well as a poor, unorganized labor force. The war and the French embargo that followed created new Army/Security industries which grew out of the Israeli army's need for new technologies and bases in the occupied territories. This is considered the beginning of wealth accumulation in Israel.
1971-1972: Mizrachi activists create The Black Panthers to protest against growing poverty and its correlation between ethnical background. The government "social" budget grows - mainly in education and child support.
1973: As a result of the Yom Kippur War, the government military budget rises dramatically to 30% of spending. Money flows toward the parts of the Israeli market involved in the defense industries. The World enters an economic crisis as a result of the OPEC oil embargo.
1974: Golda Meir's government collapses after mass demonstration about the Yom Kippur scandal, Rabin takes the office as Prime Minister. This will be the last social democratic government in Israel.
1977: Hamahapch. After years of the left controlling the government, Begin's Likud win and take power by promising social reform and on anti-left propaganda
1977-1983: The Social Change. Taking after Milton Friedman's (who spoke to the Knesset shortly after Begin began his term) writing, and the Reagan and Thatcher example, the Likud initiates a new neo-liberal economic policy characterized by:
-Reducing limitations on foreign currency trade.
-Reducing import taxes and customs - "the merry days of Aridor" - imports expand and becomes cheaper, spurring a massive wave of consumption.
-Social projects like the "Poor Neighborhoods Rehabilitation Project" increase governmental stipends for the poor while allowing unemployment and poverty to rise.
-Liberalization of the market and refusal to increase taxes to pay for the growing budget.
-Mint more money to make up for deficits. Yearly inflation rises from around 40% in 1970, to around 200% in 1983.
The Histadrut cancels Hevrat Ovedim (The Workers Company) monetary plan - the self-financing system where Histadrut pension funds were used to finance new Histadrut factories without the need of financing from the banks.
1983: Banks' stocks, which had been promoted by banks and the government, and were heavily invested in by the public, crash. Many people's savings are ruined. To stop other sectors from crashing (and the loss of more savings) the government freezes the stock market for about 20 days. As a result, the banks are nationalized.
1984: The establishment of the "National Consensus Government" which continues until 1990. Shimon Peres (Labor) and Yitzchak Shamir (Likud) replace each other as Prime Minister every two years. Israel's inflation level rises to 400% per year.
1985: Prime Minister Peres, Financial Minister Moda'i, and the National Bank Treasurer Bruno, initiate the "Market Stabilizing Plan" under recommendations from the IMF. The plan's main points are:
-Downsizing the national budget, which mainly hurts the poor and limits the redistribution of wealth.
-Tying the shekel to the dollar (1200 shekel = 1 dollar)
-The "No-Printing" amendment to the Israeli National Bank Law.
-Inflation stops, but the banks did decrease the interest on money owed accordingly. So, in actuality, the interest paid on debts jumped to hundreds of percent rather than stabilizing at tens of percent. And accordingly, the debts of the manufacturing sector grow enormously, further hurting the working class.
From here on, every government in Israel (left or right) continues basically the same neo-liberal policies, although the right with much greater zeal.
The National Economic Arrangement Law is first used, and used every year since then. It's a law with hundreds of clauses that is attached to the budget bill every year. It is voted on as a whole, and usually the Knesset members don't really know what is really written in it.
1987-1991: The First Intifada. As a result, Israeli companies begin bringing foreign workers to replace Palestinian workers who now have a hard time entering Israel.
1989: The beginning of privatization. Bezeq (the Israeli telecommunication company) starts to be privatized. The process continues until 2005 when the government sells it's remaining stock in Bezeq for less than it's worth.
1991: The First Gulf War
1992: Rabin is re-elected into office. His time as Prime Minister is characterized with the continuation of privatization, a lot of investment in infrastructure, education, and wage raises in the public sector. Israel Chemical Co. one of Israel's biggest corporations starts it's privatization process. The process ends when the government sells it to Isenberg group fro half of it's value.
1994: The National Health Bill - separates The General Health Service (Kupat Cholim Klalit) from the Histadrut, causing a financial crisis for the Histadrut. The Health Service becomes supported by the government , which has cut it's budget ever since.
Chaim Ramon (close associate of Peres) is elected as chairman of the Histadrut and starts selling off it's assets, with the end goal of making the Histadrut only a union. The Hitadrut diminishes in power and membership, mainly because of the separation from it's health services, which had great appeal.
1995: Rabin is assassinated.
1996: Netanyahu is elected as Prime Minister. The first election done by the new election law, which separates voting for Prime Minister and voting for the Knesset. The law is soon after revoked.
1997: Bank Hapoalim is sold for less than it's worth, by a loan from another bank. The loan is paid back from the bank's profit right after.
The liberalization process that deregulates foreign currency trade is finished. There are no more rules regarding investment in foreign currency. This makes Israel very vulnerable to money speculation - a process which caused the East-Asian market collapse a few years back.
1999: Barak is elected as Prime Minister. The last government that is elected by the new election law.
2000: Israeli forces leave Lebanon.
Tzim, the national shipping company is privatized (finishes in 2004).
2001: The first Sharon government comes into office. It is characterized by harsh neo-liberal policies including cuts in the social budget, senior citizens, child support, and income support, bringing many people below the poverty line. The policies are created by Finance Ministers Netanyahu and Silvan Shalom.
The Wisconsin Welfare to Work plan starts.
The Israeli labor market moves towards unorganized labor and man power companies that exploit workers.
The unemployed are accused of cheating and laziness and social security is cut more as an incentive for them to work.
High level income taxes are cut, further helping those who are well off.
2003: El-Al is privatized. The postal service starts it's privatization process.
2004: The privatization of prisons start - first private prison starts being built.
2005: Disengagement from the Gaza Strip.
Dovrat report is issued to the government, an attempt (that failed for now) to start privatizing education.
Histadrut pension plan is nationalized.
The Decrease National Debt Law is initiated, which obligates the government to decrease the national debt.
Amendment to the budget law says that the national budget can grow a maximum of 1% a year - which is less than Israel's natural growth - and means a decrease in the budget in reality.
2006: Bazan - Israeli refinery is privatized.
18% of the employees in Israel are poor.
2007: The nationalized pension plans are sold off. A new pension system is established linking pensions to the stock market.
2008: Israel privatizes remaining oil refineries and Agrexco, Israel's largest exporter of agricultural products.
In 2011, Agrexco goes bankrupt.
2010: Israel's government, under Benjamin Netanyahu, makes plans to sell land that is held by the Israel Land Authority in trust for the people of Israel. Israel continues with it's plans to privatize the national ports of Eilat, Ashdod, and Haifa.
2011: Hundreds of thousands of citizens go out to the streets protesting against inequalities in class, shouting "who is that coming? It's the Welfare State!" and "the people demand social justice!"
2012: Israel Aerospace moves more towards privatization.
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