Saturday, November 01, 2008

Israel's Brain Drain; The plight of newspapers; Barak opposes 'piggish' capitalism; Livni says no to Shas

BELOW IS A 'WRAP' covering Sunday, Oct 26 thru Friday, Oct. Oct 31

Bold on brainpower

A threatened strike this Sunday at Israeli universities which would have delayed the start of the winter semester was averted thanks to the belated intervention of the prime minister, who largely sided with the university presidents and the education minister over the finance minister and Treasury officials.

Ehud Olmert ordered the Treasury to release NIS 465 million in supplementary funding to the universities. He even promised another NIS 50 million for "development."

Education Minister Yuli Tamir was ecstatic: Finally, there will be money to hire young faculty, invest in research, improve infrastructure and subsidize tuition.

This is all good news. Of course, had the state not cut higher education funding six years in a row and not done away with the municipal tax abatements once enjoyed by universities, they might have had a bit more cash on hand.

A new complicating factor is that university financial portfolios have lost hundreds of millions of shekels in value due to the global economic downturn. Moreover, no one yet knows how the recession will affect donations from "friends" organizations abroad. The Technion, for instance, raises some $80 million a year that way.

MUCH NOW depends on how the Treasury implements the premier's order. Will the universities be able to spend the promised monies at their discretion - on everything from salvaging their humanities departments to paying for pensions - or will their expenditures be micro-managed?

The Finance Ministry had been insisting that any additional monies be funneled to programs promoting the Shochat Committee's vision. That's the body tasked with rethinking how Israeli higher education should be funded and administered. As part of its package of recommendations, Shochat called for investing NIS 2.4 billion in the universities over five years. The aim? To reverse the country's dramatic brain-drain, which has seen too many of our best and brightest emigrating because they can't find work in their fields here.

Shochat also advocated investing in young scholars. Universities want to do that, but they're under internal pressure to support established academics. They are also saddled with huge personnel and pension costs - the annual budget bite at Hebrew University, for example, is 64 percent.

Shochat advocated a merit-based pay-scale, but how are universities to reconcile that with their obligations to the tenured? It recommended that students pay more: At Hebrew University, for instance, tuition fees comprise only 11 percent of income. The government provides another 43%. Yet how much more can students realistically afford? Many are in their early 20s when they reach campus, having done army or national service, and already work part-time. Means-testing might be an equitable way to determine how much individual students should pay. Some private universities in the US have eliminated tuition altogether for students whose family income falls below a certain level.

WE'RE GRATIFIED that the threat of a university strike appears to have been removed. And we urge all sides to work together in good faith to implement the premier's instructions.

But let's not lose sight of the bigger challenge. If we do not invest more and better in education - from elementary school through post-graduate studies - our pool of educational talent will simply dry up. It's already beginning to happen.

We spend roughly 6.9% of our GDP in education - on a par with the US and UK - yet a recent OECD survey suggested we're not getting a sufficient return on this investment. Israeli teachers are underpaid, our classrooms are overcrowded and our students no longer excel in math and science.

Israel's economy is a technologically advanced one. Even those who run our farms, dairies and agricultural enterprises use state-of-the-art equipment. When people think of Israeli industry, they think of our hi-tech exports in such fields as aviation, communications, software design, medical electronics, fiber optics and pharmaceuticals. All this takes brainpower.

We need to press our politicians, civil servants and university presidents - as well as the heads of all teachers unions - to make the courageous strategic choices that will allow Israel to sharpen its intellectual qualitative edge for the 21st century. When it comes to nurturing our nation's brainpower, our ambition must exceed the Shochat recommendations.

Hug your newspaper
These are tough times for those of us who are passionate about newspapers. Yediot Aharonot, the biggest Hebrew-language tabloid, is reportedly planning to cut its budget. The circulation of Ma'ariv has fallen below that of Yisrael Hayom, a free handout. Ma'ariv's management is said to be planning yet another round of cuts.

Overseas, The New York Sun has ceased publication. The Star-Ledger of New Jersey plans to cut its newsroom staff by a staggering 40 percent. The Los Angeles Times is cutting 75 newsroom jobs. The Gannet chain, which owns 85 newspapers, has announced more layoffs (in addition to 1,000 jobs cut over the summer). Even The New York Times has instituted a partial hiring-freeze.

The combined weekday circulation of America's top 500 newspapers now averages 38 million - 4.6% below last year.

Apart from USA Today and The Wall Street Journal, whose readership numbers are flat, all of America's leading newspapers - including the Times, Washington Post, New York Daily News, New York Post and Los Angeles Times - lost readers in the past year.

Newspaper advertisement revenues worldwide are declining; Web site income has generally failed to make up the difference. Virtually all newspapers have spent years economizing. Some have been cut to the bone.

Now comes news that the well-regarded Christian Science Monitor will be suspending daily publication in April 2009 and, instead, emailing paid subscribers its paper in PDF form.

The news is no better in the UK. For instance, five years ago The Independent was selling 218,567 copies daily; today, revamped as a tabloid, it sells roughly 144,050. Similarly, paid circulation is down at The Times, which also went tabloid, and at The Guardian, which moved to a "Berliner" size, somewhere between broadsheet and tabloid. The Daily Telegraph, which maintained its broadsheet format, has also lost readers. Even the give-away Metro, distributed in 16 cities across Britain, is laying off staff.

THE DARK clouds hanging over the "old media," however, give way to a bright future for "new media." Google this week announced a "historic" arrangement, the outcome of a court settlement between the search engine and representatives of publishers and authors that will allow readers - so far only in the US - to purchase full digital access to millions of copyrighted books. The deal protects intellectual property while dramatically expanding Web access to the printed word.

Perhaps the biggest clue about where the future may be headed comes from, which is marketing a wireless reading device - again for use in the US only - known as Kindle, which it insists "looks and reads like real paper." The gadget makes it possible to purchase books or newspapers and have them auto-delivered wirelessly (without the use of a computer or telephone line) in less than one minute.

Even before 1450, when German inventor Johannes Gutenberg introduced the movable-type printing press, mankind had sought to improve how the written word was disseminated. Over five centuries later, we're well into an epoch which will see paper and ink largely disappear, replaced by digitized "content."

Some insist that readers of traditional newspapers absorb more of what passes before their eyes than those who rely on click- and-scroll. Perhaps. What is certain is that quality journalism is being underfunded as advertising revenue falls in the shift to cyberspace.

Still, you won't find Luddites here at The Jerusalem Post. In fact, was the first Web site to provide news and comment from Israel, and it remains the most-read English site in Israel. Fortunately, we are also blessed with a strong and faithful readership in hard-copy.

As we survey the changes affecting our industry worldwide, we can't help but feel a twinge of sadness at the thought that one day the thump! of a newspaper being delivered will be forgotten, as will the smell of newsprint. The hope is that disciplined, carefully prioritized content and elegant, efficient presentation of traditional newspapers will live on in the PDF format. At the very least, there will be no one to complain of smudged fingers...

Ours is perhaps the luckiest of generations. We can relish the traditional newspaper, even as we reconcile ourselves to the technologies that are replacing it.

Barak, social democrat?

Kicking off the Labor Party's campaign for the 18th Knesset on Monday, party chair Ehud Barak denounced "piggish capitalism."

"We differ from other parties because we understand that it's time to do away with the capitalistic greed that the Right has been a proponent of, while offering solidarity, sensitivity and social responsibility."

Playing to the proletariat has worked for Barak in the past. In the 1999 campaign, which saw him defeat the Likud's Binyamin Netanyahu, the Labor leader predicted that Netanyahu's government "will fall because of the trampled honor of the unemployed, because of one child's crying into his pillow at night, and another child, and another child, and another child..."

It's an approach that may not work now.

Ten years on, Labor aspires to represent the working man and woman; it maintains its membership in the Socialist International. Yet the party is so closely identified in the public mind with many of Israel's top entrepreneurs, industrialists and moguls as to make an anti-greed electoral strategy problematic.

Over the years, for instance, Labor has raised money abroad from the Bronfman family, from Swiss industrialists Nissim Gaon and Bruce Rappaport, from Slim-Fast diet company founder S. Daniel Abraham and the late Swiss-British billionaire Octav Botnar. Local benefactors have included Gad Ze'evi, Muzi Wertheim and Stef Wertheimer.

These supporters may see themselves as progressives, but could voters reasonably think of them as enemies of "capitalist greed"?

As for the party leader himself, it's true that Barak was raised on a kibbutz - Mishmar Hasharon - but he has since graduated to an entirely different life-style, exemplified by his spacious home on the 31st floor of Alfred Akirov's Tel Aviv tower. It's an apartment purchased for $2.5 million in 2006, which Barak is now trying to sell for $11 million. Plainly, the Labor leader has engaged in capitalist enterprise (serving on corporate boards and the like).

We do not begrudge him his comfortable lifestyle. He would do well, however, to explain to Israelis where enterprise ends and greed begins.

Labor's origins are traceable to the Zionist socialism of the Mapai Party, which dominated our politics and our economics first through the pre-state Jewish Agency, and then in government.

Today's Labor Party encompasses the remnants of the neo-Marxist Achdut Avoda Party as well as David Ben-Gurion's splinter Rafi Party. The factions merged in 1968, though the Labor Party as we know it now emerged only in 1991. Ever since, it has struggled to refine its identity. In 2003, several of its more dovish luminaries quit to join Meretz; and in 2006 others who in the wake of the second intifada saw themselves as centrist or pragmatists quit to join Kadima.

WHERE DOES all this leave Labor now? Polls show the party garnering 11 Knesset seats, compared to the 20 it holds now. The global economic crisis notwithstanding, voters are telling pollsters that security tops the economy as the issue that most animates their preferences. Assuming Shaul Mofaz plays a critical role in Kadima's campaign and Moshe Ya'alon - another general - runs with Likud, Barak's appeal to voters on security grounds is diminished.

The ethnic and working-class vote is likely to go to Shas; sincere neo-Marxists troubled by "capitalistic greed" will probably be more comfortable voting Meretz. Thus Barak's "capitalist greed" rhetoric is unlikely to be Labor's salvation.

Britain's Labor Party spent its "wilderness years" (1979-1997) - while Margaret Thatcher and her successors kept the Conservatives in power - reinventing itself as New Labor. The Israel Labor Party never gave itself much time for that. When it wasn't ruling the country for 29 consecutive years, it was, for roughly 17 years, a coalition partner. Arguably, the party became little more than a vehicle for seeking office.

At this stage, it's far from obvious that even a spell in the opposition could rebrand Labor as Israel's "social democratic party." In its post-Amir Peretz incarnation, it is outflanked on its economic left by Meretz and Shas, while the center is held by Kadima.

Should Kadima flourish under Tzipi Livni - championing, moreover, a centrist approach to negotiation with the Palestinian Arabs - many will wonder whether Labor, led by Ehud Barak, has any future at all.

Bye-bye, bazaar?

The Knesset's winter session opens today, but there will be no keynote address by Prime Minister Ehud Olmert, who announced Sunday that, under "the current circumstances," he would not press for a legislative agenda.

Following her election five weeks ago as Kadima's new chair, Foreign Minister Tzipi Livni struggled to pull together a Knesset majority so that she could replace Olmert without going to the polls. Yesterday, on live television, Livni told President Shimon Peres: I can't do it.

She started out with Kadima's 29 mandates. To this, Ehud Barak added Labor's 20. But for a majority in the 120-seat Knesset, Livni still needed Shas's 12 mandates. She also wanted the Gil Pensioners Party's seven seats for a more comfortable, 68-seat majority. But the old-timers backtracked.

The Sephardi Shas Party demanded budget-busting allocations for child allowances; it fancies itself the champion of the working poor. More accurately, however, it mainly champions patronage to its own institutions.

Livni refused to play by the old rules. Nor would she pledge, as Shas demanded, not to negotiate with the Palestinian Arabs on what to do about Jerusalem in the context of Israel's commitment to a "shelf agreement."

Now what? Peres could, over the next several days, try to use the prestige of his office to bring Shas and Kadima together. He could even give opposition leader Binyamin Netanyahu three weeks to try his hand at building a governing coalition. Opinion surveys show the Likud - which has only 12 seats - as now being the most popular party.

But the most likely scenario is that Peres will call for new elections, which could take place as early as February 17.

Then the cycle of haggling to form a government begins anew.

OLMERT, who still faces possible indictment, remains in place as Israel's caretaker premier.

There are those on the Right who worry that he will use the coming months to cut a bad deal with Palestinian Authority President Mahmoud Abbas (himself under pressure to step down when his term expires in January). Critics worry that Olmert will do anything not to be remembered chiefly for the collection of scandals which led to his resignation, and for his inept handling of the Second Lebanon War. He wants to be remembered for his commitment to peace.

He's lately gone on record as breaking with the Israeli consensus by essentially calling for a withdrawal to the 1949 Armistice Lines.

Post diplomatic reporter Herb Keinon has pointed out, however, that Olmert's ability to reach a deal with the Palestinians or the Syrians is severely constrained. Any accord would need cabinet and Knesset approval - something he's unlikely to get. Moreover, Olmert's Arab partners are unlikely to publicly commit to what for them would be "concessions," fearing that a new government might reject these as insufficient.

On the other hand, Israel cannot freeze its diplomatic and security agenda. Hizbullah, Hamas and Iran can be expected to exploit the perception of an Israeli leadership vacuum. The global economic crisis isn't going away. Neither is the growing lawlessness among extremist elements in the settler movement.

We would like to think that Olmert will rise to the occasion and navigate the country with wisdom until his successor can finally take over. During this period, he needs to work as much as possible in concert with Livni, Netanyahu and Barak on any decision that would bind the next government.

It would be entirely appropriate for him to travel to Washington after America's November 4 election to meet with the president-elect; and to maintain open channels with our Arab interlocutors.

LIVNI is being criticized for mishandling the negotiations by those who say that a more skilled bargainer could have cajoled Shas into joining a coalition.

This misses the point. Whatever the details of the 17th Knesset's premature demise, the more substantive lesson to be learned is that our political system needs reforming. The stranglehold sectarian parties have over the allocation of resources must be broken. We applaud Livni for saying that she refuses "to pawn Israel's future for the prime minister's seat."

The new Kadima leader might just have steered the country in the direction of representative democracy, and away from "government by bazaar."

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