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Policy Brief September 2020
www.shoresh.institute
Changing the paradigms SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deck Israel’s lethal and horizon-less mix at the half year mark
Dan Ben-David and Ayal Kimhi
Abstract
Israel’s health system entered the Covid-19 pandemic with the developed world’s
most overcrowded hospitals, a relatively small and aging healthcare workforce, and
mortality rates from infectious diseases far higher than in every other developed country.
These opening conditions mandated a nationwide lockdown quickly after the pandemic
reached Israel, which in turn led to a near eradication of the virus within the country by
the end of May. Instead of utilizing this opportunity to implement policies in preparation
for future waves, while gradually opening the economy, the government developed no
strategic plan for the future. Significantly compounding the situation, the prime minister
broadly announced that it was then possible for the public to resume its normal activities.
Almost immediately thereafter, the second, considerably deadlier, virus wave began, with
almost twice as many deaths in August alone as in the entire first wave, while Israel
plunged into the worst recession in its history.
Extensive governmental dysfunction and a complete lack of leadership led to
often contradictory – and completely ineffectual – patchwork policies costing huge
amounts of public money. The policy disarray at the top led to considerably less
compliance among the Israeli public, particularly in ultra-Orthodox and Arab-Israeli
communities who lead the list of most infected municipalities. Only after nearly five
months into the pandemic did the government appoint a person to coordinate its policies
for combating the virus. Within days, cabinet ministers and other leading politicians
from the governing coalition began to undercut his authority and call for his firing.
Professor Dan Ben-David is President of the Shoresh Institution for Socioeconomic Research and a member of the
faculty of Tel Aviv University’s Department of Public Policy. Professor Ayal Kimhi is Vice President of the Shoresh Institution for Socioeconomic Research and Head of the Department of Environmental Economics and Management at the Hebrew University.
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Introduction
As the world awaits a vaccine for Covid-19, countries struggle to find a balance between
minimizing the number of deaths from the contagious disease and minimizing the economic
damage wrought by the health safety measures. The degrees of success on both counts vary
widely across countries and even within countries over time.
At the six-month mark, the number of Covid-19 deaths per capita in Israel place the
country at the center of the OECD, with 108 persons per million population dying from the
disease (Figure 1). There are developed countries with 5-fold (and above) more deaths per capita
and there are developed countries with 5-fold (and above) fewer deaths per capita.
While there is no particular
difference in mortality rates between large
and small countries, half of the eight
OECD countries with the lowest mortality
rates are island countries (New Zealand,
Japan, Australia and Iceland). Ireland and
the UK are major exceptions to this general
rule of thumb since relative isolation alone
is no substitute for public health policies.
While not island countries, Israel and
Korea’s geopolitical circumstances provide
them with degrees of physical isolation
relatively similar to those of the island
countries.
New ZealandSlovakia
KoreaJapanLatvia
GreeceAustralia
IcelandLithuania
Czech RepEstoniaNorwayPolandFinland
SloveniaHungary
TurkeyAustria
DenmarkIsrael
GermanyPortugal
LuxembourgSwitzerland
CanadaIreland
NetherlandsFranceMexico
United StatesSweden
ItalyChile
United KingdomSpain*
Belgium
New ZealandSlovakia
KoreaJapanLatvia
GreeceAustralia
IcelandLithuania
Czech RepEstoniaNorwayPolandFinland
SloveniaHungary
TurkeyAustria
DenmarkIsrael
GermanyPortugal
LuxembourgSwitzerland
CanadaIreland
NetherlandsFranceMexico
United StatesSweden
ItalyChile
United KingdomSpain*
Belgium
56610182626293240484954616264
7681
108108111
179198199
242360363
469500
555575
587591
611622
854
56610182626293240484954616264
7681
108108111
179198199
242360363
469500
555575
587591
611622
854
Figure 1
Covid-19 deaths in OECD countries Total deaths per million persons, as of September 1, 2020
* August 31, 2020.
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Our World in Data
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Background
The case of Israel is particularly unique when it comes to infectious diseases in recent
years. Prior to the recent coronavirus outbreak, the country’s recent mortality rates from
infectious diseases made it an outlier in the developed world as a result of increasing prolonged
neglect and mismanagement of its healthcare system.
This was not always the case in Israel. For example, the country’s founding generation
managed to increase the number of hospital beds at roughly the same pace as Israel’s
extraordinary population growth during the early decades. Thus, the number of hospital beds per
capita remained relatively steady from
Israel’s birth in 1948 until 1977 (Figure
2). Since then, the number of hospital
beds per capita has been in a continuous
multi-decade free-fall. This was part of
an overall shift in national priorities as
Israel moved to new, and similarly
steady, multi-decade socioeconomic
trajectories in additional realms, such as
productivity, education and physical
infrastructures – trajectories that are
unsustainable in the long run (Ben-David
and Kimhi, 2017).
While many other developed countries have implemented alternative healthcare policies
that enabled them to reduce the number of hospital beds, the extent of the decline in Israel, and
the concurrent ineffective development of alternative options raised the country to the top of the
OECD in terms of hospital occupancy (Figure 3). An average 94.4% occupancy rate for an
entire country over the course of an entire year means that there are some hospitals with
1.7
1.9
2.1
2.3
2.5
2.7
2.9
3.1
3.3
3.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
3.1
3.3
3.5
1948 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2018
1977
2015
* Curative (acute) care hospital beds.
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: Israel’s Central Bureau of Statistics
Figure 2
Hospital beds in Israel* per 1,000 population, 1948-2018
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
occupancy rates well over 100% capacity
over the course of the year – especially
during the flu season. This entails the
placement of patients in hospital corridors,
dining areas and a host of other non-
hygienic and non-sterile areas.
As if these hospitalization
conditions were not enough, Israel has also
invested minimally in the training of health
care professionals. While its physicians
and nurses are among the world’s best in
terms of their training and personal
abilities, there are simply not enough of
them.
Instead of investing in its future, the
country relied on the influx of physicians
from the former Soviet Union in the 1990s
to bolster its ranks. As the country’s
physicians age, the number of medical
school graduates in Israel fell to the bottom
of the OECD (Figure 4). Not only is the
number of practicing physicians per capita
in Israel below the OECD average, the
country’s stock of physicians is aging
rapidly. While the share of physicians that
are 75 years old and above is 1.3% in the
OECD, that share is 10.3% in Israel.
52.4%63.2%
65.1%66.8%67.4%
68.3%69.4%69.6%70.3%70.9%71.4%71.6%
73.1%73.6%74.0%
74.8%75.0%75.3%75.8%
77.3%77.5%77.8%78.3%
79.6%81.2%
82.5%83.3%
84.0%84.3%
91.4%93.7%
94.4%
40% 50% 60% 70% 80% 90%
52.4%63.2%
65.1%66.8%67.4%
68.3%69.4%69.6%70.3%70.9%71.4%71.6%
73.1%73.6%74.0%
74.8%75.0%75.3%75.8%
77.3%77.5%77.8%78.3%
79.6%81.2%
82.5%83.3%
84.0%84.3%
91.4%93.7%
94.4%
52.4%63.2%
65.1%66.8%67.4%
68.3%69.4%69.6%70.3%70.9%71.4%71.6%
73.1%73.6%74.0%
74.8%75.0%75.3%75.8%
77.3%77.5%77.8%78.3%
79.6%81.2%
82.5%83.3%
84.0%84.3%
91.4%93.7%
94.4%
40% 50% 60% 70% 80% 90%40% 50% 60% 70% 80% 90%
NetherlandsUnited States
PortugalTurkey
LuxembourgSlovak Rep
LatviaHungaryEstonia
SloveniaCzech Rep
Korea2Lithuania
GreeceFinland5AustriaJapan
FranceSpain
MexicoSweden4
ItalyChile
GermanyBelgiumNorway
SwitzerlandDenmark3
United Kingdom1CanadaIrelandIsrael
NetherlandsUnited States
PortugalTurkey
LuxembourgSlovak Rep
LatviaHungaryEstonia
SloveniaCzech Rep
Korea2Lithuania
GreeceFinland5AustriaJapan
FranceSpain
MexicoSweden4
ItalyChile
GermanyBelgiumNorway
SwitzerlandDenmark3
United Kingdom1CanadaIrelandIsrael
1 2010, 2 2003, 3 2001, 4 1996, 5 1995
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: OECD
Figure 3
Hospital occupancy rates in OECD countries as percent of available beds, average for 2012-2016
6.86.8
7.67.77.7
8.99.49.5
10.110.2
10.710.810.910.911.1
11.912.0
12.913.113.3
13.914.214.3
15.215.715.7
16.116.316.516.7
17.718.6
19.321.5
24.7
6.86.8
7.67.77.7
8.99.49.5
10.110.2
10.710.810.910.911.1
11.912.0
12.913.113.3
13.914.214.3
15.215.715.7
16.116.316.516.7
17.718.6
19.321.5
24.7
6.86.8
7.67.77.7
8.99.49.5
10.110.2
10.710.810.910.911.1
11.912.0
12.913.113.3
13.914.214.3
15.215.715.7
16.116.316.516.7
17.718.6
19.321.5
24.7
IsraelJapanKorea
United StatesCanada
ChileNew Zealand
FranceTurkeyGreecePoland
SwedenSwitzerland
EstoniaNorway
GermanyFinland
United KingdomMexico
ItalySpain
AustriaHungaryIceland
NetherlandsAustralia
Czech RepublicPortugal
Slovak RepublicSloveniaLithuania
LatviaBelgium
DenmarkIreland
IsraelJapanKorea
United StatesCanada
ChileNew Zealand
FranceTurkeyGreecePoland
SwedenSwitzerland
EstoniaNorway
GermanyFinland
United KingdomMexico
ItalySpain
AustriaHungaryIceland
NetherlandsAustralia
Czech RepublicPortugal
Slovak RepublicSloveniaLithuania
LatviaBelgium
DenmarkIreland
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: OECD
Figure 4
Medical school graduates in OECD countries per 100,000 population, averages for 2016-2018
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
The picture with regard to practicing
nurses is even bleaker. The number of nurses
per capita in Israel is near the bottom of the
OECD (Figure 5). As if this were not
enough, the inflow of new nurses is also
minimal, with the number of nursing
graduates per capita in Israel among the
lowest in the OECD.
Under such cirumstances – with
overcrowded hospitals and less than hygienic
hospitalization conditions, and with minimal
healthcare staff that is overworked and
unable to handle the lack of capacity – it
should come as no surprise that deaths from
infectious diseases in Israel have risen
significantly over the years.
While the number of deaths per capita
from infectious and parasitic diseases in
Israel was never low in comparison with the
rest of the developed world, the take off in
recent years has been extraordinary (Figure
6). In just two decades, mortality rates have
doubled. Consequently, Israel’s death rates
from infectious diseases became unparalleled
in the developed world. It is perched far
above all other OECD countries, with 69%
more deaths per capita from infectious
2.9
3.3
4.6
5.0
5.1
5.6
5.6
6.1
6.5
6.8
6.9
7.7
7.8
8.1
9.8
9.9
10.0
10.2
10.8
10.9
11.0
11.3
11.6
11.7
12.9
14.3
14.5
17.1
17.7
2.9
3.3
4.6
5.0
5.1
5.6
5.6
6.1
6.5
6.8
6.9
7.7
7.8
8.1
9.8
9.9
10.0
10.2
10.8
10.9
11.0
11.3
11.6
11.7
12.9
14.3
14.5
17.1
17.7
2.9
3.3
4.6
5.0
5.1
5.6
5.6
6.1
6.5
6.8
6.9
7.7
7.8
8.1
9.8
9.9
10.0
10.2
10.8
10.9
11.0
11.3
11.6
11.7
12.9
14.3
14.5
17.1
17.7
MexicoGreece
LatviaIsrael
PolandItaly
SpainEstonia
HungaryAustriaKorea
LithuaniaUnited KingdomCzech Republic
SloveniaCanada
DenmarkNew ZealandNetherlands
SwedenBelgium
JapanAustralia
LuxembourgGermany
Finland*
IcelandSwitzerland
Norway
MexicoGreece
LatviaIsrael
PolandItaly
SpainEstonia
HungaryAustriaKorea
LithuaniaUnited KingdomCzech Republic
SloveniaCanada
DenmarkNew ZealandNetherlands
SwedenBelgium
JapanAustralia
LuxembourgGermany
Finland*
IcelandSwitzerland
Norway
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: OECD
Figure 5
Practicing nurses in OECD countries per 1,000 population, averages for 2016-2018
10
15
20
25
30
35
40
10
15
20
25
30
35
40
1975 1980 1985 1990 1995 2000 2005 2010 20161975 1980 1985 1990 1995 2000 2005 2010 2016
Israel
OECD
Israeli mortality rates doubled
in last two decades alone
* Adjusted by the ratio of standardized population to actual population.
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: OECD
Figure 6
Deaths from infectious and parasitic diseases per 100,000 population*, 1975-2016
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
diseases than the OECD’s number two
country, Greece (Figure 7).
To put this in perspective, while
250 to 350 Israelis are killed in traffic
accidents each year, the country’s
comptroller’s office reports that 4,000 to
6,000 Israelis die annually (prior to the
Covid-19 outbreak) from infectious and
parasitic diseases. This is some 16 orders
of magnitude greater than the traffic
fatalities toll.
The first and second Covid-19 waves
These were the underlying conditions when the worldwide Covid-19 pandemic struck
Israel. As its lethal combination of an extremely contagious disease with very high mortality
rates became increasingly clear, Israel was faced with some particularly difficult decisions to
make. Already home to one of the most neglected healthcare systems in the developed world,
the degrees of freedom available to Israel were extremely limited. It did not have any excess
capacity to deal with extraordinary emergencies – with a looming healthcare crisis about to
become the world’s most severe since the Spanish flu a century ago.
Thus, when the coronavirus reached Israel in early March, the country shut down quickly
and extensively to minimize contagion as much as possible. The lockdown was thorough and
relatively effective healthwise. The epidemic peaked during the first half of April and then
receded just as quickly as it had initially escalated. 198 people died from Covid-19 in April, and
that number fell to 69 in May and 35 in June.
FinlandPoland
SloveniaHungary
Slovak RepIcelandAustria
SwitzerlandEstonia
New ZealandUnited Kingdom
IrelandLuxembourg
JapanSpain
AustraliaFrance
CanadaLatvia
DenmarkPortugalNorway
GermanyItaly
BelgiumSweden
Czech RepNetherlands
TurkeyKoreaChile
MexicoLithuania
United StatesGreece
Israel
FinlandPoland
SloveniaHungary
Slovak RepIcelandAustria
SwitzerlandEstonia
New ZealandUnited Kingdom
IrelandLuxembourg
JapanSpain
AustraliaFrance
CanadaLatvia
DenmarkPortugalNorway
GermanyItaly
BelgiumSweden
Czech RepNetherlands
TurkeyKoreaChile
MexicoLithuania
United StatesGreece
Israel
4.04.7
6.17.37.47.57.57.7
8.38.48.58.7
10.111.311.511.712.2
13.213.914.2
15.315.615.815.915.9
16.716.716.7
17.818.4
19.419.8
21.521.9
23.439.6
4.04.7
6.17.37.47.57.57.7
8.38.48.58.7
10.111.311.511.712.2
13.213.914.2
15.315.615.815.915.9
16.716.716.7
17.818.4
19.419.8
21.521.9
23.439.6
4.04.7
6.17.37.47.57.57.7
8.38.48.58.7
10.111.311.511.712.2
13.213.914.2
15.315.615.815.915.9
16.716.716.7
17.818.4
19.419.8
21.521.9
23.439.6
State Comptroller’s Report (2013):
For comparison purposes:
4,000-6,000 Israelis die each year from infectious
and parasitic diseases
250-350 persons killed each year in traffic accidents
* Mortality rates from infectious and parasitic diseases adjusted by the ratio of standardized population to actual population.
Source: Dan Ben-David, Shoresh Institution and Tel Aviv University
Data: OECD
Figure 7
Deaths from infectious and parasitic diseases per 100,000 population*, average for 2014-2016
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Although Israel was caught unprepared in March, its quick nation-wide lockdown
thwarted the kind of major surges in deaths experienced by other countries. With the epidemic
continuing to be as contagious and as deadly as before, with no vaccine on the horizon in the
foreseeable future – at least until the end of 2020 – and with increasing economic damage
limiting further options of the kind implemented during the first wave, it was clear that Israel
needed to utilize the time that it had bought with the lockdown to prepare for the future.
In April, at the height of the first wave, the Shoresh Institution published a study (Ben-
David, 2020) on Israel’s unique innate conditions, not available in most countries, which would
enable the country to open up all places of employment, all schools, all entertainment venues, all
of the elderly and retirement homes, and to do this without masks or special restrictions on social
distancing. The study detailed how Israel could utilize its unique characteristics to completely
rid the country of the virus for as long as necessary, even in the event of catastrophic future
Covid-19 waves abroad. Among Israel’s comparative advantages:
Israel is a very small country the size of New Jersey with a population smaller than
metropolitan Chicago;
furthermore, it is one of the most isolated countries in the world, with extraordinary
control of its borders and those who cross them;
and finally, Israel has exceptional capabilities and experience in dealing with unexpected
security crises. The current problem is not security-related in the conventional sense, but
for all practical purposes, Israel is in a war and Israelis are dying.
From the domestic Israeli level, all that’s needed to significantly limit damage from the
coronavirus war is
a sufficient number of labs, with all of the ingredients, technicians and test kits;
and the ability to quickly find, trace and identify all infected persons in the country.
This would then enable treatment of all those who are sick and full isolation of the remainder for
the requisite days, with full oversight and immediate testing of all persons entering Israel.
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
What’s needed to implement a project on this scale is money – a lot of money. But when
put in the perspective of the huge and rising economic, social and psychological costs at the
national level, this is an almost negligible amount.
According to recent finance ministry forecasts, Israel’s GDP is expected to fall by 80-100
billion shekels this year. In other words, Israel’s economy is hemorrhaging at a rate of 400-500
million shekels per work day from April through the end of this year. This daily economic cost
from Covid-19 dwarfs any expenditure necessary to rid the country of the virus – even before a
vaccination becomes available in the next year or two. Thus, any amount needed to do so is
feasible from an economic standpoint, and certainly from social and health perspectives.
Success of such an effort requires a serious professional at its helm, an individual granted
the authority provided to the army’s chief of staff during a war. The government needs to set the
goals while the Knesset must provide oversight on the activities of the coronavirus chief of staff
and the operation that he/she heads. But in a war, like in a war, they should not intervene or
interfere with the professional activities.
Nothing approaching such a plan of action was even considered after infection rates fell
in May. In fact, just the opposite occurred. To make room for the largest Israeli government
ever, with 36 cabinet ministers and 16 deputy ministers (comprising nearly half of the country’s
legislative branch, the Knesset), existing cabinet ministries were divided into additional silos that
further reduced much needed coordination and planning.
As if the lack of planning and strategic perspective were not enough, Israel’s prime
minister appeared on primetime national TV on May 26, a week after forming his new
government, to announce: “We received great news today. The government is allowing
restaurants, pubs and bars, the large parks, swimming pools. You can return as closely as
possible to your daily routines. Drink a cup of coffee, drink some beer – and enjoy life!”
That is exactly what Israelis did – and the outcome of that behavior is clearly visible in
Figure 8. After the number of new Covid-19 cases nearly bottomed out by the date of the prime
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
minister’s May 26th
announcement, the number of new cases began to soar almost immediately
thereafter.
Since Israel began to administer
more tests during the summer months –
though not nearly enough, and with very
limited efficiency in terms of very long
lag times for results alongside high
numbers of lost tests and test results – it
stands to reason that many infected
persons who would have otherwise gone
undetected now appear as new cases.
An alternative approach is to
focus not on the total number of
infected persons but rather on the daily
percentage of positive results from the
Covid-19 tests (Figure 9). While more
accurate than simply looking at the total
number of cases, this is also not a fool-
proof measure of the virus spread. It is
more than likely that the less available
tests during the early weeks of the
epidemic were given only to persons
with the highest likelihood of being
infected while the increasingly available
tests over the summer have been
administered to many more individuals
who are less likely to be infected. To
26
May
Percentage of daily positive test results
0%
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3%
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5%
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8%
Percentage of daily positive test results
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8%
1-Mar
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daily deaths from Covid-19
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daily deaths
percentage of daily
positive results
Figure 9
Daily deaths from Covid 19 and percentage of daily positive results from Covid-19 tests in Israel*
* 7 day moving averages.
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution for Socioeconomic Research
Data: Our World in Data
Ma
y 2
6
0
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24-Aug
1-Sep
Figure 8
Daily new Covid-19 cases in Israel*
* 7 day moving average.
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Our World in Data
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
the extent that this is indeed the case, this measure provides an overestimate of infection rates
during the first wave.
And yet, even if these drawbacks did indeed exist, the behavior of infection rates during
the first wave (the blue curve in Figure 9) mirrors the behavior of the curve in Figure 8 showing
the total number of infections. The share of positive test results shot up to about 7.5% by the
first half of April, and then fell close to zero by May 26th
. Following the prime minister’s public
green light for the population to return to its daily routines, the share of infected person shot up
once again, reaching 8% in August.1
Possibly the most accurate way to gauge fluctuations in the epidemic’s severity is to
focus on the daily number of deaths from Covid-19. Since deaths occur – if at all – several days
after infection, this lag is depicted vividly by the red curve in Figure 9. It is a fairly similar
facsimile of the blue curve showing infection rates, but shifted to the right by a few days. The
fact that the daily peak of deaths in the first wave was lower than the daily peak in the current
wave is a testament to the much greater severity of the second wave in Israel.
Add to this the fact that the peak is not only higher, but the area under the curve during
the second wave is considerably greater than in the first wave, denoting just how much more
serious the situation has become in late summer than during the April peak.
This is borne out in Figure 10a. While 198 Israelis died from Covid-19 in April, the July
total very nearly reached that first wave peak while over twice as many Israelis died in August
than in April. Figure 10b, highlights the rapid increase in mortality rates over the past month,
with the inflection point just a few days after the prime minister’s address to the nation on May
26.
The small decline in infection rates in late August (in Figure 9) – and what appears to be
the beginning of a subsequent decline in mortality rates a few days later – may signal that the
second wave’s peak has passed. But the very high number of new daily cases in early September
1 In light of the large daily fluctuations in the reported numbers, the graphs depict seven-day moving averages to
smooth out the curves and provide a better visual indication of the changes over time.
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
(surpassing 3,000 for the first time ever, and doing so twice within the first three days of the
month), with infection rates at the time of this writing exceeding 9% for the first time ever, it is
entirely possible that any such conclusions regarding a change in direction may be premature and
misleading. This is especially true in light of the fact that schools reopened on September 1 and
the education ministry’s lack of preparedness for the new school year may yet heighten infection
and mortality rates even further.
Even with the currently spiking mortality rates from Covid-19, Israel is still below half of
the other OECD countries in this regard (Figure 1). A comparison with the United States, a
country that has fared far worse thus far, can provide some perspective.
Since the onset of the pandemic, the number of infections per capita in the United States
has been 35% higher than in Israel (Figure 11) – though, as noted earlier, this is highly related to
the number of tests administered. More indicative of the gap between the two countries is the
percent of positive results, with the American average equaling 2.4 times the Israeli infection
rate. The tremendous disparity between US states in dealing with the epidemic has led to the
situation spiraling out of control in different states at different times. Overall, the number of
1717
198198
6969
3535
184184
416416
March April May June July August
Figure 10a
Monthly Covid 19 deaths in Israel
0
100
200
300
400
500
600
700
800
900
1,000
0
100
200
300
400
500
600
700
800
900
1,000
1-Mar
9-Mar
17-Mar
25-Mar
2-Apr
10-Apr
18-Apr
26-Apr
4-May
12-May
20-May
26-May
5-Jun
13-Jun
21-Jun
29-Jun
7-Jul
15-Jul
23-Jul
31-Jul
8-Aug
16-Aug
24-Aug
1-Sep
1-Mar
9-Mar
17-Mar
25-Mar
2-Apr
10-Apr
18-Apr
26-Apr
4-May
12-May
20-May
26-May
5-Jun
13-Jun
21-Jun
29-Jun
7-Jul
15-Jul
23-Jul
31-Jul
8-Aug
16-Aug
24-Aug
1-Sep
26
Ma
y
Figure 10b
Total Covid-19 deaths in Israel
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Our World in Data
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Americans who have died from Covid-19
(relative to the population size) is over five
times the mortality rate in Israel since the
pandemic’s outbreak.
The red bars in Figure 11 provide a
more up-to-date comparison of the two
countries, with the number of total cases per
capita and infection rates in the US falling
below Israeli levels during the last week of
August. The gap in mortality rates has
declined substantially as well – though it’s
still a huge gap – with 80% more Americans
per capita dying in the last week of August
than Israelis. But as Figure 12 indicates,
there is more here than meets the eye.
In fact, the recently falling gap in
mortality rates between the US and Israel is
not due to a declining number of persons
dying, per capita, in the States. This
number has actually been increasing since
June – albeit in considerably lower numbers
than during the initial Spring peak period.
The gap in mortality rates between the two
countries has been falling because these
rates are rising even more quickly in Israel
than in the States in recent months (Figure
12).
22
2323
8844
2121
4848
1010
175175
129129
6868
7878
9494
March April May June July AugustIsrael US Israel US Israel US Israel US Israel US Israel US
Figure 12
Monthly Covid 19 deaths in Israel and US average monthly number of deaths per million persons
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Our World in Data
Israel = 100
total casesper capita
deathsper capita
percent positive test results
63most recent
7 day period*
63most recent
7 day period*
93
most recent 7 day
period**
93
most recent 7 day
period**
180
most recent 7 day
period*
180
most recent 7 day
period*
240
since beginning of Covid19
240
since beginning of Covid19
511
since beginning of Covid19
511
since beginning of Covid19
135
since beginning of Covid19
135
since beginning of Covid19
Figure 11
Covid-19 comparison of US and Israel in US relative to Israel (Israel=100)
* August 26 – Sept 1. ** August 18 - 24.
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Our World in Data
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Some insight on the differences between the first and second waves of Covid-19 in Israel
can be gained by examining socioeconomic attributes related to infection rates across different
municipalities. While public perception during the first wave was that predominantly ultra-
Orthodox (Haredi) municipalities had the highest infection rates per capita, Kimhi (2020) found
two socioeconomic attributes in particular that explain most of the difference in infection rates
between Israeli municipalities at the top and bottom of the infection rate distribution. These
were population density and the fraction of residents living in religious boarding schools (not
necessarily Haredi boarding schools). Predominantly Haredi municipalities are ranked high
according to both attributes, but some non-Haredi municipalities with large religious boarding
schools also had relatively high infection rates. Most Arab-Israeli municipalities, on the other
hand, had much lower infection rates during the first wave, despite relatively high population
density.
The situation has changed in the second wave. While predominantly Haredi
municipalities are still among the most infected municipalities, they have been joined at the top
of the distribution by many Arab-Israeli municipalities with very high infection rates. In fact,
among the 32 municipalities declared as “red zones” (as of September 3rd
), 24 are Arab-Israeli
(including more than a third of the population in predominantly Arab-Israeli municipalities) and
five are predominantly Haredi (including roughly 80% of the population in predominantly
Haredi municipalities).2
The difference between the first and second waves may be rooted in behavioral changes.
The complete lockdown during the first wave yielded a sense of emergency resulting in higher
compliance with government orders almost everywhere – except the religious boarding schools –
including in the Arab-Israeli sector. The evidently-too-rapid exit from the lockdown alongside
the very inconsistent and contradictory government policies and statements has since led to
considerably less compliance during the second wave. This was particularly true in the Arab-
Israeli sector, with mayors of several large Arab-Israeli towns publicly testifying to this effect.
2 Twelve Arab neighborhoods in East Jerusalem have also been declared red zones.
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Compliance in the Haredi sector was far from perfect during the first wave, and it became
even worse during the second wave, with Haredi leaders exacerbating the situation even further.
For example, one of Israel’s most influential Rabbis commanded his followers to avoid
coronavirus testing altogether while Haredi cabinet ministers and other leading Haredi politicians
publicly attacked their own government’s policy measures aimed at protecting the Haredi
population. The public statements by government ministers against government policies were
not condemned or rebutted by the prime minister.
The economic impact of Covid-19
The economic toll that both Israel and the US have begun to pay is huge, though it’s far
from being among the worst in the OECD (Figure 13). Projections made on the basis of the first
half of 2020 – these may yet change dramatically in light of the huge unknown awaiting in the
second half of 2020 – indicate drops in GDP ranging from -4.6% (in annual terms) in Korea to
nearly a quarter of GDP lost in Spain, with the UK not far behind at -22.1%. Current projections
for a 10.6% fall in American GDP place
the country at around the middle of the
OECD in percentage terms – though the
immense size of the US economy makes
the loss in dollar terms (as opposed to
percent) far higher.
While the currently expected
9.7% decline in Israeli GDP may be
relatively small in comparison with most
other OECD countries, it is nonetheless
the greatest fall in GDP in Israeli history
– and that includes periods of major
wars.
-4.6%
-5.0%
-5.4%
-6.7%
-8.4%
-8.5%
-9.2%
-9.3%
-9.7%
-9.9%
-10.2%
-10.6%
-10.6%
-11.5%
-11.5%
-12.9%
-13.0%
-13.9%
-14.8%
-15.3%
-17.1%
-17.3%
-18.3%
-18.9%
-22.1%
-22.7%
-4.6%
-5.0%
-5.4%
-6.7%
-8.4%
-8.5%
-9.2%
-9.3%
-9.7%
-9.9%
-10.2%
-10.6%
-10.6%
-11.5%
-11.5%
-12.9%
-13.0%
-13.9%
-14.8%
-15.3%
-17.1%
-17.3%
-18.3%
-18.9%
-22.1%
-22.7%
-4.6%
-5.0%
-5.4%
-6.7%
-8.4%
-8.5%
-9.2%
-9.3%
-9.7%
-9.9%
-10.2%
-10.6%
-10.6%
-11.5%
-11.5%
-12.9%
-13.0%
-13.9%
-14.8%
-15.3%
-17.1%
-17.3%
-18.3%
-18.9%
-22.1%
-22.7%
KoreaFinlandLithuaniaNorwayJapanSwedenDenmarkPolandIsraelNetherlandsLatviaChileUnited StatesCzech RepublicGermanyAustriaSlovak RepublicCanadaHungaryBelgiumItalyPortugalMexicoFranceUnited KingdomSpain
KoreaFinlandLithuaniaNorwayJapanSwedenDenmarkPolandIsraelNetherlandsLatviaChileUnited StatesCzech RepublicGermanyAustriaSlovak RepublicCanadaHungaryBelgiumItalyPortugalMexicoFranceUnited KingdomSpain
KoreaFinlandLithuaniaNorwayJapanSwedenDenmarkPolandIsraelNetherlandsLatviaChileUnited StatesCzech RepublicGermanyAustriaSlovak RepublicCanadaHungaryBelgiumItalyPortugalMexicoFranceUnited KingdomSpain
Figure 13
GDP decline in OECD countries over first half of 2020 (in annual terms, seasonally adjusted)
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: OECD
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
According to the Central Bureau of
Statistics (2020a), nearly half of Israel’s
private businesses reported a drop of at
least 50% in their revenues during the
Spring lockdown period (Figure 14). The
share of such firms declined to about one-
sixth of the total in June and the beginning
of July (the most recent numbers currently
available).
During the initial outbreak of the
virus, the share of persons out of work
skyrocketed, though not formally under the
conventional method of measuring
unemployment (the share of individuals
seeking work but unable to find it).
Instead, the relatively minor – in the past –
classification of persons absent temporarily
from work expanded significantly (Figure
15). While not formally classified as
unemployed since they are still formally
employed, such persons are nonetheless
unemployed from a practical perspective
since they are not working and do not
receive compensation. Using this broader
definition of unemployment, including
persons formally listed as temporarily
absent from work, over a third of Israel’s
18%12% 15%
29%24% 20%18%
12% 15%
29%24% 20%
14%20%
30%
30%
30%29%
14%20%
30%
30%
30%29%
26% 23%
26%
23%
23%28%
26% 23%
26%
23%
23%28%
20%17%
17%
7%10% 9%
20%17%
17%
7%10% 9%
23%26%
9% 7% 8% 7%23%26%
9% 7% 8% 7%
2%5% 5% 5% 7%
2%5% 5% 5% 7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mar 31 Apr 22 May 7 Jun 3 Jun 17 Jul 8
unknownunknown
51%-75%51%-75%
26%-50%26%-50%
up to 25%up to 25%
nonenone
76%-100%76%-100%
Figure 14
Percent drop in business revenues in Israel
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Israel's Central Bureau of Statistics
Jul 16-31
Jul 1-15
Jun 16-30
Jun 1-15
May 16-31
May 1-15
Apr 16-30
Apr 1-15
Mar 16-31
Mar 1-15
Feb 16-29
Feb 1-15
Jan 16-31
Jan 1-15
Jul 16-31
Jul 1-15
Jun 16-30
Jun 1-15
May 16-31
May 1-15
Apr 16-30
Apr 1-15
Mar 16-31
Mar 1-15
Feb 16-29
Feb 1-15
Jan 16-31
Jan 1-15
0% 5%0% 5% 10% 15% 20% 25% 30% 35% 40%10% 15% 20% 25% 30% 35% 40%
percent unemployedpercent unemployed
percent absent temporarily from workpercent absent temporarily from work
Figure 15
Percent unemployed and absent from work in Israel
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Israel's Central Bureau of Statistics
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Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
working age adults were unemployed
during the first half of April (Central
Bureau of Statistics 2020b). That
share fell to approximately one-tenth
by June and current projections are
that this will be the unemployment
rate at the end of 2020 as well.
Aside from persons employed
in education, who tend to have a
substantially high number of persons
formally on leave each summer (the
share of persons on leave in the sector
during July 2020 was actually 9% below the share in July 2019), the two sectors taking the
hardest hit are also sectors that typically employ lesser skilled and more poorly paid workers
(Figure 16). These are primarily sectors affected by tourism and leisure activities, which were
particularly hard hit.
The impact on these two sectors was the largest in May – with over three and a half times
more people on leave in 2020 than in
2019 in the accommodation and food
services sector and 2.2 times as many
on leave in the arts, entertainment and
recreation sector (Figure 17). The gap
between the two years declined in
June, a month with relatively low
infection and mortality rates, only to
rise again in July to gaps similar to
those in April.
3.3
5.9
6.9
8.0
8.7
12.2
13.6
14.7
15.3
15.8
16.1
16.2
17.0
25.9
26.2
26.7
31.7
41.5
42.9
3.3
5.9
6.9
8.0
8.7
12.2
13.6
14.7
15.3
15.8
16.1
16.2
17.0
25.9
26.2
26.7
31.7
41.5
42.9
3.3
5.9
6.9
8.0
8.7
12.2
13.6
14.7
15.3
15.8
16.1
16.2
17.0
25.9
26.2
26.7
31.7
41.5
42.9
Agriculture, forestry and fishing
Local, public and defence administration and social security
Water supply, sewerage and waste management
Households as employers
Electricity supply
Information and communications
Manufacturing; Mining and quarrying
Wholesale and retail trade and repair of motor vehicles
Financial and insurance activities
Construction
Real estate activities
Professional, scientific and technical activities
Human health and social work activities
Other service activities
Transportation, storage, postal and courier activities
Administrative and support service activities
Accommodation and food service activities
Arts, entertainment and recreation
Education
Agriculture, forestry and fishing
Local, public and defence administration and social security
Water supply, sewerage and waste management
Households as employers
Electricity supply
Information and communications
Manufacturing; Mining and quarrying
Wholesale and retail trade and repair of motor vehicles
Financial and insurance activities
Construction
Real estate activities
Professional, scientific and technical activities
Human health and social work activities
Other service activities
Transportation, storage, postal and courier activities
Administrative and support service activities
Accommodation and food service activities
Arts, entertainment and recreation
Education
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution for Socioeconomic Research
Data: Israel's Central Bureau of Statistics
Figure 16
Percent of persons on temporary leave of absence in Israel by economic sectors, July 2020
Arts, entertainment
and recreation
Arts, entertainment
and recreation
Accommodation and
food service activities
Accommodation and
food service activities
April 157%April 157%
114%April 114%April
May 258%May 258%
122%May 122%May
June 35%June 35%
66%June 66%June
157%July 157%July
109%July 109%July
Figure 17
Increase in number of persons on temporary leaves of absence in economic sectors with highest rates of leave (except education),
2020 compared to same month in 2019
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Israel's Central Bureau of Statistics
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
Israel’s policy disarray
Just as the government was unable to determine a coherent policy to deal with the health
aspects of the epidemic going forward, the government’s response to the economic downturn
was haphazard at best. Seemingly entering election mode (which would make this Israel’s fourth
in a year and a half), the government began to massively increase its expenditures without
articulating any long-term strategy for dealing with an extremely serious crisis that is clearly not
going to dissipate anytime soon.
As of August, corona-specific allocations comprised 28.3% of the 2019 budget (Figure
18).3 That alone is more than the combined amount that Israel spends on its two largest budget
items (until this year), education and defense. Despite this, the prime minister pushed the nation
towards the brink of elections in
late August by reneging on a
coalition agreement to pass a
budget for 2021 and the remainder
of 2020. As of this writing in early
September, Israel still has no
budget even on the planning table
for the current year that is about to
end, nor a budget for next year.
The situation has become so politicized and so disconnected from reality that the
country’s most senior civil servant in charge of the budget division resigned on August 30th
(this
on the heels of an earlier resignation by the civil servant heading the government’s accounting
division) stating that “policy is characterized by narrow, irrelevant and short-term decision-
3 The 2019 budget was the most recent one approved by Israel’s government and is used here to provide a common
benchmark for the other budgetary expenditures.
Figure 18
Government expenditures as percent of total budget
28.3%28.3%total corona-specific budget
allocations as of 8-2020
12.4%education
12.4%educationeducation and defense
ministry budgets in 2019 11.5%defense11.5%
defense23.9%
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution for Socioeconomic Research
Data: Israel's Finance Ministry
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
making while professional staff are silenced, blatant disregard is shown toward staff work,
policies are rash and normal budgetary tools and norms are ignored.”4
The magnitude of the economic
problem facing Israel is highlighted in
Figure 19. While the corona-specific budget
is currently slated to cost nearly 10% of
GDP, the ability to pay for this will decline
as well – with a nearly identical decline in
GDP expected at this time. If the current
absence of policy continues, these could
both be under-estimates for an economic
disaster with enormous future social consequences.
In late July, nearly five months after the Covid-19 outbreak in Israel, the government
finally decided to appoint Prof. Roni Gamzu to lead the country’s efforts in combatting the virus.
However, the government is still unwilling to define what powers and what authority Gamzu has
to actually deal with the epidemic. As a result, there is an incessant flow of contradictory
directives by leading cabinet ministers – not to mention persistent calls for his resignation from
top politicians from the ruling party – that undermine his ability to manage the government’s
efforts.
This is the current state of affairs as Israel head into its new year and High Holidays. The
degree of governmental dysfunction is unparalleled at a time when Israel faces one of the worst
crises in its history. Cabinet meetings, held weekly even during periods of wars, are being
habitually cancelled week after week. No budget for the country is in the offing while the
country’s top civil servants from across the spectrum, from the economic through the health to
4 Haaretz, Avi Waksman (August 30, 2020). https://www.haaretz.com/israel-news/business/.premium-israel-s-
treasury-budget-chief-resigns-accusing-minister-of-crossing-red-lines-1.9114296
Figure 19
Cost of Covid-19 as percent of GDP
seasonally adjusted loss in
Israeli GDP in first half of 2020
(in annual terms)
total corona-specific budget
allocations as of 8-2020
-9.7%-9.7%
9.6%9.6%
Source: Dan Ben-David and Ayal Kimhi, Shoresh Institution
Data: Israel's Central Bureau of Statistics
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Policy Brief September 2020 SHORESH Institution for Socioeconomic Research
Anarchy at the helm with Covid-19 on deckDan Ben-David and Ayal Kimhi
the law enforcement and judicial systems are coming under increasing personal attacks by the
very politicians who appointed them.
This is a period unlike any other that Israel has undergone. The Covid-19 pandemic has
severely strained matters across the world. In the case of Israel, it has only exacerbated problems
that have been escalating for years. As this powder keg heads toward an explosion, one can only
hope that in its aftermath – if such an explosion does indeed materialize – a viable new
framework will emerge that can finally return Israel to socioeconomic trajectories that are
sustainable in the long run.
References
Ben-David, Dan (2020), “Ensuring an almost fully operational economy in Israel during additional waves
of the pandemic in the coming year,” Shoresh Institution for Socioeconomic Research, Policy Brief.
Ben-David, Dan and Ayal Kimhi (2017), “Israel’s primary socioeconomic challenges and policy areas
requiring core treatment,” Shoresh Institution for Socioeconomic Research, Policy Brief.
Central Bureau of Statistics (2020a), “Survey of Businesses in Israel during the Coronavirus Crisis (7th
Wave),” Press Release.
Central Bureau of Statistics (2020b), “Labour Force Survey Data, Second Half of July and July 2020”,
Press Release.
Kimhi, Ayal (2020), “Socioeconomic aspects of Coronavirus infection rates across Israeli municipalities,”
Shoresh Institution for Socioeconomic Research, Policy Brief.
Our World in Data (2020), Coronavirus (COVID-19) Testing, Research and data by Hannah Ritchie,
Esteban Ortiz-Ospina, Diana Beltekian, Edouard Mathieu, Joe Hasell, Bobbie Macdonald, Charlie
Giattino, and Max Roser. https://ourworldindata.org/coronavirus-testing#tests-per-confirmed-case
The Shoresh Institution is an independent, non-partisan policy research center. The institution conducts
impartial, evidence-based analyses of Israel’s economy and civil society. Its objective is to assist in moving the
country towards a sustainable long-term trajectory that raises Israel’s living standards while reducing disparity
among its citizens. To further this goal, the Shoresh Institution informs Israel’s leading policymakers and the
general public, both inside and outside the country, through briefings and accessible publications on the source,
nature and scope of core issues facing the country, providing policy options that ensure and improve the well-
being of all segments of Israeli society and create more equitable opportunities for its citizens.
Findings and points of view expressed in Shoresh publications are the authors’ alone.