Despite its many economic successes, Israel is plagued by an unusual high cost of living relative to wages, making life difficult, especially for young people and recent immigrants. Simona Weinglass writes:
[The economists] Gilad Brand and Eitan Regev surmised that these [market] problems are caused by government regulation that allows industry after industry . . . to be very concentrated [in the hands of a few businesses].
“An Israeli importer has an agreement with a global producer and the global producer works only with him,” explained Brand. “He is not willing to sell his products to other importers. . . . In other countries, . . . other entrepreneurs [would] come along and buy products in a secondary market, but in Israel the government ministries don’t make this possible.” . . .
“Many people think the problem of the Israeli market is that it’s too capitalistic,” said Regev. “Actually, it’s the exact opposite. It’s not competitive enough. It’s controlled by oligopolies and monopolies that reduce productivity and raise prices. Many Israelis blame the wrong address and think the problem is the improper distribution of public funds, when actually the real robbery is in the private sector.”
Read more on Times of Israel: http://www.timesofisrael.com/sure-you-can-make-it-in-israel-if-your-parents-help-say-economists/