The EconomistFebruary 6th 2021 Middle East & Africa 391H
e was hardlya household name, but
the funeral of Rabbi Meshulam Dovid
Soloveitchik on January 31st may prove a
turning-point in Israel’s election cam-
paign. The event drew some 20,000 ultra-
Orthodox mourners, in defiance of a na-
tionwide lockdown to combat covid-19 (see
picture). “It’s wrong to break the lockdown,
but when a man like this passes, there is an
uncontrollable urge to demonstrate our re-
spect for the life he led,” says Chaim Wal-
der, an ultra-Orthodox writer.
For more secular Israelis, the funeral
was yet another reminder of the govern-
ment’s failure to enforce covid-related re-
strictions on the ultra-Orthodox, who are
12% of the population. The devout contin-
ue to pray in packed synagogues and hold
big weddings. Some ultra-Orthodox
schools and yeshivas remain open, despite
all other schools being closed. Many of
those angry about the disparity have
blamed Binyamin Netanyahu, the prime
minister, and thrown their support behind
the party of Yair Lapid, a secularist.
Mr Netanyahu’s coalition relies on the
backing of two ultra-Orthodox parties, so
he goes easy on the group. “There are gath-
erings on all sides, in all communities,” he
said after the funeral. The prime minister
would rather talk about how Israel leads
the world in vaccination per person. Over a
third of the population have been jabbed.
Still, covid-19 cases and deaths have been
rising. The main reason appears to be the
arrival of a more infectious variant. But the
ultra-Orthodox account for nearly a quarterof the new cases.
In a recent poll, 61% of Israelis said they
did not want ultra-Orthodox parties in the
next government. Many voters believe Mr
Lapid is the only contender who would de-
finitely leave them out. His own party, Yesh
Atid, has moved up to second, behind Mr
Netanyahu’s Likud, in the polls. The vote is
on March 23rd. “I don’t want my campaign
to focus on [ultra-Orthodox] against secu-
lar,” says Mr Lapid. “It’s about a return to
normalcy versus a sense of chaos, which is
what most Israelis are now feeling.”
Mr Lapid, a former television talk-show
host, created Yesh Atid in 2012. He served as
Mr Netanyahu’s finance minister from 2013
to 2014. But for years he was seen as lacking
the experience and gravitas to be prime
minister. He seemed to acknowledge that
in 2019, when he teamed up with Benny
Gantz to create the Blue and White list of
candidates—led by Mr Gantz. It battled to a
virtual draw with Likud in an election last
year, but split after Mr Gantz broke his pro-
mise not to serve under Mr Netanyahu,
who faces charges of bribery and fraud.
Early in this campaign it seemed as if
the main threat to Mr Netanyahu would
come from his right. A former ally, Gideon
Sa’ar, formed a party for disgruntled Likud-
niks. But Mr Sa’ar is also wary of antagonis-
ing the ultra-Orthodox, whom he would
like to draw away from Mr Netanyahu. Mr
Lapid is better placed to capitalise on the
prevailing mood—and, perhaps, to put to-
gether a coalition that does not include Li-
kud or the ultra-Orthodox parties. 7JERUSALEM
Will his alliance with the ultra-Orthodox doom Binyamin Netanyahu?Israeli politicsA sea of trouble
I
n most placesa new car is a bad store of
value. Its resale price plummets the mo-
ment it is driven out of the dealership. But
not in Algeria. Hassan Houicha has been
getting offers to buy his Volkswagen for the
same sum he paid for it in 2013. Still, he re-
fuses to sell. “What if I can’t find another
car?” he says.
Algeria has a problem. It does not pro-
duce cars. Yet, in an effort to keep hard cur-
rency in the country, it banned car imports
in 2016. To no one’s surprise, this caused a
shortage. Such shoddy policies are typical
of how the government is handling a stub-
born current-account deficit and resulting
hard-cash crunch (see chart). Its capricious
actions increase volatility in a country that
toppled its autocrat in an uprising two
years ago, and where the economy shrank
by 5.5% in 2020.
Over 90% of Algeria’s foreign-currency
receipts come from oil and gas exports. But
receipts have been on a downward trajec-
tory for years. (A slump in energy demand
because of the pandemic has not helped.)
Meanwhile, over the past decade Algeria
has spent more than 28% of its gdpeach
year on imports. As a result, its foreign re-
serves have fallen from almost $200bn in
2014 to under $50bn today. Economists say
they could run out in two years.
So the country has been trying to spend
less hard cash. It significantly cut its im-
port bill in 2020. Sonatrach, the state ener-
gy firm, which does much of its business in
foreign currency, has been told to slash
spending for this year by half. The govern-
ment has levied tariffs of up to 200% on
everything from chocolate to mobileCAIRO
Why Algerians cannot hitch a rideAlgeria’s car shortageBroken-down
country
Dollars and deficits
AlgeriaSources:IMF;RefinitivDatastream20100-10-20-30
20152010Current-account
balance, $bn
200150100500
20152010Foreign-exchange
reserves, $bn