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Thursday, June 22, 2006
PM Olmert's 22.6.06 Caesarea Conference Speech

PM Olmert's 22.6.06 Caesarea Conference Speech
www.pmo.gov.il/PMOEng/Communication/PMSpeaks/speechcas220606.htm

My Colleagues,
Members of the Government,
Distinguished Guests,
Participants of the Caesarea Forum, which has become well-known in our
public, economic lives

By the way, on my way here, it occurred to me that it is time to call the
Caesarea Forum by its rightful name, the "Jerusalem Forum". I hope this will
happen.

I wish to thank you for the interesting survey I heard - and I noted
everything that was said for future discussions - and I welcome the fact
that the topic of the opening lecture of this conference is dedicated to the
connection between poverty and economic growth. This is an issue that
troubles me, and discussing it at the opening lecture is an indication of
its centrality and importance.

From a macro-economic viewpoint, the Israeli economy is currently on the
right track. We have a surplus in the ongoing account of balance payments.
We have satisfactory foreign currency reserves, inflation is low, and within
the limits of the target set by the government, the tax burden is much lower
than in the past and the state budget deficit is lower than in many
developed countries. The challenge in this field, and it is real and
extremely important - as you well-know, is to keep the engine of the economy
on the right track.

In 2005, real investment in the Israeli economy reached an unprecedented
record of over $6 billion. These are investments from all over the world.
During the past year, the overall investment - including financial
investment in the Israeli economy - reached over $11 billion.

Two days ago, at the venture capital funds conference, I noted with great
satisfaction that in the 13 years since the venture capital industry in
Israel began operating, it acquired a leading status in the world - second
only to the American venture capital industry, raising a capital of over $10
billion.

These funds' experts, primarily foreign investors in Israeli venture capital
funds, are no gamblers. They know very well what they are doing when they
invest in Israel, and we are glad to see them here, and want even more to
come. And they will.

These investments are, of course, a salute to the spirit of Israeli
entrepreneurship and to the quality and ingenuity of our hi-tech industry,
but it is also a vote of confidence in the strength, stability and future of
Israeli economy. It is no less a decisive answer to and a crushing defeat of
terror - which is attempting to sow fear and incite panic. The international
economic community says it in a clear voice - we are not afraid to invest in
Israel.

There is no better testimony to the manner in which the Israeli economy is
perceived in the world today than Intel's decision to invest $5 billion in
the establishment of a new factory in Israel and improve the existing
factories, or Warren Buffet's decision to purchase 80% of Yiskar stocks for
$4 billion, based solely on a review of the company's performance, without
even visiting Israel.

It is impossible to think of this stream of investment removed from the
general picture of the Israeli economy, an economy with relatively high
growth rates, of which there are few like it among developed nations. Last
year, we achieved a growth rate of over 5.2%. The updated forecast for this
year is 5.3%, after incredible growth of 6.6% in the first quarter of 2006.

These impressive data should be a source of pride - but not complacency.
They were achieved after many years of struggle and difficulty, hardships
which struck especially hard at a significant portion of Israeli society,
specifically the weaker sectors. It is our duty to continue in the efforts
to achieve growth, in order to make certain that the fruits of growth are
felt everywhere, and not only by specific sectors of Israeli society. I will
not cease my efforts in this regard. We must persist in the effort to
correct the structural problems which the economy still suffers from, and
continue the reforms which greatly contributed to the growth rate. This is
the only way to ensure sustainable growth.

The Government of Israel's economic vision is the enhancement of growth,
simultaneously with the reduction of social gaps, and I believe that this
vision could be realized if we achieve the following goals:

- Stable and viable growth, economic independence, continued transformation
of the Israeli economy into a modern and competitive economy which
appropriately grapples with the challenges of a world which is becoming more
global and competitive every day. In the economic field, we must not, nor do
we wish to, be "a people who dwell alone".

- Enhancement of Israel's economic standing in the international arena,
transforming it into a source of attraction for foreign investment, while
advancing and improving Israeli competitiveness in both the industry and
services fields.

- Reduction of the tax burden in the framework of the multi-year plan.

- Continuation of the revolution currently taking place in Israel in the
field of infrastructures, with the goal of achieving an infrastructure which
is worthy of a modern economy within five years - a widespread rail and road
network of global quality; energy based on natural gas; desalination
facilities and so forth.

- Reduction of gaps, introduction of equal opportunity - giving each and
every one the option of enjoying the fruits of economic recovery.

I know these are ambitious goals, but they are all attainable through a
multi-year process.

However, at this point I wish to deviate from the data presentation and
openly ask a number of questions pertaining to the human capital in the
systems in question.

When I sit alone, I am repeatedly amazed by how the most simple, well-known,
basic and almost axiomatic things, agreed upon by all sensible people, do
not exist in our society as they should.

Can anyone argue with the fundamental assumption that education is the key
to social mobility and to the fulfillment of individual potential?

Can anyone argue with the fact that some of the children in Israel meet the
education system for the first time only at the age of 5 because their
parents cannot finance educational frameworks prior to this age? And here,
we must emphasize empirical truths, which again are not new, that the age
which determines the crucial development of a person is between birth and
age 3. Up until the age of 6 is the most critical phase. We must not ignore
it.

In other words, by the stage at which the child reaches the formal education
system, certain facts have already been set, which will determine his
character, personality, his chances and his ability to function in society.

Can anyone argue with the fact that this child's parents who we are
discussing, and who are busy with physical survival, are not always
available to nurture their child's basic living qualifications and provide
her with the "tool box" necessary for entering a normative educational
system?

Can anyone argue with the fact that these children's starting point in
relation to other children who are raised in an environment which is aware
of the need to realize their developmental potential from infancy, will be
lower?

Can anyone argue with the fact that a child who joins the education system
in a situation of relative disadvantage is a child sentenced to a path of
obstacles, which are often too overwhelming for him to bear?

Can anyone argue with the unfortunate assumption that only when this child
is a hindrance in class - a class which is a reflection of the society in
which he lives - will someone notice and acquire professional help for him?

When will we acknowledge the gap this child faced from infancy? When will we
categorize him as different? When he becomes a hindrance? When he threatens
to bring down the school's average? When we are forced to bear the costs of
special education?

And then we will ask ourselves, "what do we do with the child"? And we will
not always have a ready reply. Then, suddenly, our heart's desire would be
to rehabilitate him, but the finances will not always be available to us.
The psychological service will try to confront his problematic self-esteem
and the education counselor will try to "reinstate him in class" and the
expert on learning disabilities will not understand why the impairments were
not traced at the age of 2, and an entire system of experts will mobilize to
analyze the reasons, minimize the damage and maybe - and I emphasize maybe -
correct it.

Let us put aside the costs for a minute. Let us address our duty towards
this child from the human aspect - his birthrights under the Convention on
the Rights of the Child, to which Israel is a signatory, and our duties as
parents, educators, professionals in the fields of social and educational
sciences, to provide him with the best tools at a critical age when his mind
is being developed and his personality is being shaped, to prepare him from
the beginning for the challenges faced by those born into a western,
achievement-oriented, technological society.

I, like many of you, am a father and grandfather of children and
grandchildren. I have seen my children go through every stage, and my small
grandchildren develop skills and abilities from the day they were born. When
I am with my grandchildren, when each one of you are with your small
children or grandchildren, when they gaze and smile at us, only then are we
reminded of how this treasure is the center of our lives.

Our knowledge as leaders obligates us. What it carries with it is
responsibility.

With regard to the costs, as this is an economic conference, we know that we
will eventually have to allocate resources which are always limited, and do
so in accordance with our list of priorities, with forethought and
responsibility:
A child who is defined, according to the parameters of the Welfare Ministry,
as a high-risk child, costs the State of Israel between 1,000 and 2,000
dollars a month. An overall investment in the developmental skills of an
infant, including the cost of diagnosis, treatment, ongoing developmental
monitoring, parents' training and raising awareness, amounts to 1,000
dollars per annum.

This year, approximately 150,000 children will be born in Israel (and my
facts are similar to those of David Brodet). 50,000 of them will be born
into a life below the poverty line. Life below the poverty line is not
necessarily a platform for raising children at risk. Some will cope
successfully, despite the difficulties. However, a childhood below the
poverty line is a basis for the development of a lack of equal opportunity,
the erosion of human potential and that of the right to childhood, which is
something that we, as a society, must not tolerate.

What, therefore, is the unequivocal conclusion we reach from what I have
said so far?

For a relatively low investment, we will establish support systems for
infants. My vision is that in every community in Israel, a universal,
professional and updated service will be established for the benefit of
children and parents; that children will enter the formal education system
equipped with the tools to do so; that the earliest possible response will
be given to developmental needs; that parents will learn to acquire services
for their children from the beginning. We will have more happy children, and
more smiling children, and you will, of course, agree that this is worth
everything.

I believe that if 88% of the budget which we are currently investing in
children at risk is for correction, and the remaining 12% is for prevention,
then this pyramid can and should be reversed. We will greatly benefit from
this.

I believe that the formative effects begin long before the age of 3 - the
age which is currently under discussion as the starting age for formal
education. There is consensus among experts that ages 0-3 are the most
crucial in the development of a child. I wish to announce here that in the
framework of the comprehensive change which we will introduce in the
education system in Israel, the 2007 budget will already include resources
for improving the nation's approach towards children from the age of 0-3.

The "infancy revolution" will be a fundamental pillar of my government's
policy over the next four years. The fruits of this policy, and the
strategic decisions behind it, will be reaped by us, as a society, in the
more distant future. In this field, like the other fields the Government and
I deal with, patience and planning are the keys to success.

Reform is, of course, also needed in the elementary and high schools. I have
recently been holding talks and discussions with Education Minister, Prof.
Yuli Tamir, and with senior officials at the Ministries of Finance and
Education and the Prime Minister's Office, and soon we will formulate a
comprehensive plan for a substantial improvement in the education system in
the State of Israel.

We will improve the status and qualifications of the teacher and educator
and act to ensure excellence among high school principals. On this issue I
wish to emphasize: in the decade that I served as Mayor of Jerusalem, I
visited dozens of schools and maintained close and continuous contact with
school principals. I realized that a school principal is the central axis of
the education system. There is no excellent school with a bad principal, and
there is no bad school with an excellent principal. We must set a target,
according to which only the most excellent will be worthy of managing our
children's schools.

We will create a more respectable and proper learning environment; we will
transform the curricula into a more relevant, interesting and challenging
one; we will support the weaker ones and give them the tools to allow them
to successfully tackle their school assignments.

Dealing with education is our job, but first and foremost, it is our
mission. I know that the business sector has been following not only the
government policies and measures but also its makers and executors. The
country's economic leadership at this time -Avraham Hirchson as Minister of
Finance and Stanley Fisher as the Governor of the Israel Bank, and I as
Prime Minister - is united, cohesive and decisive. We have an excellent
Finance Minister, and I trust him implicitly. My friend Stanley Fisher
enhanced the standing and prestige of the central bank immeasurably, and I
thank him for that.

At the same time, I wish to tell you that we have a united and responsible
educational leadership, which views education as a sacred mission.

Education Minister, Prof. Yuli Tamir, brings with her the experience of many
years, and comprehensive knowledge. Since she assumed office she has been
highly motivated to succeed in this position and has rallied to this mission
with all her strength. Together with her, I assure you that we will make
every effort, with the help of the Ministry of Finance, to generate the
sought-after change in the education system, and I call upon all those
relevant bodies - teachers' organizations, parents' organizations, student
organizations - and to my friend Chairman of the Histadrut, Ofer Ayni, who
has, and will continue to play a crucial role in shaping the atmosphere for
working relations, and the ability to create an infrastructure for economic
and social reforms, and I thank him with all my heart, and all those who
have the good of the nation in their hearts - to join forces and efforts for
the sacred goal of improving education in the State of Israel.

With your permission, I wish to conclude by returning to the socio-economic
issues:

Socio-economic issues at a national level are crucial issues - and therefore
the decision-makers must receive the best counsel, not only from the
administrative level in government offices - as talented as they are - but
also from experts, who have a broad and long-term view.

We have therefore decided, following recommendations presented by this
forum, to establish a council, at the Prime Minister's Office, named "the
National Council for Economy and Society", headed by Prof. Manuel
Trachtenberg of the Tel Aviv University, who is sitting here with us.

The council will supply me and the entire government with the tools for
analysis and data, not only on the most burning issues on the agenda, but
also tools needed for reviewing long-term processes. This will enable us to
lead economic and social steps, and not merely to respond to developments
and extinguish fires.

The council will also serve as a forum for dialogue with a variety of
sectors whose voices are not heard sufficiently in public discourse, such as
the periphery, the ultra-orthodox, the Arab sector, working mothers, etc.

Distinguished Guests,

The implementation of the Disengagement Plan and our extensive political
activity with world countries over the past few years have created the
stable economic base on which we stand today. It is my intention to continue
on this significant and pragmatic political path. I will abide by the
principle which I have outlined since the establishment of the Government:
leadership is the ability to lead change and be willing to take risks and
powerfully generate processes. We want to achieve the beginning of the end
to the Israeli-Palestinian conflict.

At my meetings with the Presidents of the United States, France, with the
Prime Minister of Britain and with leaders in this region, I announced that
we would make every effort to explore the possibility of reaching
understandings with the Palestinians - of course first and foremost with
Chairman Mahmoud Abbas, also known as Abu-Mazen, and not with the Hamas
Government, which is supported by terror - to advance the Roadmap. I
reiterated that only if we realize that we have no partner on the
Palestinian side, will we take the necessary unilateral measures, which are
vital for ensuring the Jewish character of the State of Israel.

These efforts to renew negotiations and reach understandings with the
Palestinians, for the benefit of both parties, will be conducted regardless
of our war on terror, a war which we will pursue firmly and unhesitatingly.
We will target anyone who tries to carry out terror, fires Qassam rockets,
prepares explosive charges and dispatches suicide terrorists. We will find
them wherever they are and foil any attempts to harm Israeli citizens.

I genuinely regret the unplanned injury of innocent civilians in Gaza and
Khan Yunis. Who else understands the pain of bereavement as we do and who
else suffers the loss of these innocent victims? At the same time, I must
say that the Government of Israel under my leadership will continue to carry
out preventative strikes against planned terrorist attacks and against all
those involved in the attempt to harm our citizens. I am deeply sorry for
the residents of Gaza, but the lives, security and well-being of the
residents of Sderot is even more important. I reject the attacks on the IDF
and its commanders. No one is more dedicated or more cautious, and will
continue to be so in the future.

In the field of security, as in the political and economic fields, we will
continue to act with logic, responsibility, equanimity and caution, but
determinedly and strongly.

Distinguished guests,

The world praises the Israeli spirit of ingenuity, which characterizes our
hi-tech industry. But ingenuity is nothing new in Israel. The Jewish people,
the first people to believe in one G-d, contributed many great innovations
to civilization. The most important of all, in my opinion, is faith in the
future - a better future for all nations. While other nations preferred to
languish in yearning for a golden era which was lost forever, the people of
Israel preferred to look ahead to a better tomorrow and to strive
relentlessly to get there.

However, even for a better future we must not wait idly. The best way to
guarantee that the future will look the way you want it to look is to mold
it today, with your own hands.

This is what we intend to do in the coming years - create the future in
which the State of Israel will remain the state we want nd love so much: an
open, thriving state, living in security on its land, developing an
enlightened, humane and just society, a creative society, a society of
culture and quality, absorbing immigrants and constituting a magnet for all
Jewish diasporas, a society which acts justly towards all the sectors which
are part of it.

I wish to conclude with appreciation to the members of the forum for your
willingness to help us fulfill this goal and for dedicating your time and
effort to contribute to the shaping of an appropriate national economic
policy.

I especially wish to thank my friend of many years, Prof. Arik Carmon,
chairman of the Institute for Democracy, whose excellent reputation is
proven again by this conference, as in previous conferences.

I guarantee that what I heard, and the special instructions you gave me at
the end of this conference fell on attentive ears.

Thank you.

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