In order to increase economic growth, enhance individual liberty, and secure greater economic opportunities for all Israelis, the new administration of Prime Minister Netanyahu should give immediate priority to four policy measures.

1. Reenact the original Free Processing Zone Law of June 20, 1994, by repealing the killer amendments of 1996, which reversed the law from a free zone for business to a government-dominated, Israeli-style industrial park. Upon reenactment, immediately issue the tender. The benefits include direct foreign investment, enthusiastic support from the American Jewish business community, and Congressional support for Israel’s honoring its oft-stated, but rarely implemented, promises of free-market reform.

2. Undertake systematic sale of state-owned land. The benefits include expanding private property holdings dramatically, improving housing affordability for Israeli families, billions of shekels in fresh government revenues, all the while reducing the scope of government domination in the important land market.

3. Commence massive privatization of state-owned enterprises, services, and banks by Czech-style vouchers through investment privatization funds (IPFs). The benefits include: giving ordinary Israelis a stake in the country’s industrial structure and profitability; eliminating budget-draining, government subsidies to money-losing, state-owned firms; eliminating political patronage/corruption in staffing; and receiving billions of shekels in fresh government revenues.

4. Reduce marginal tax rates, culminating in comprehensive reform of Israel’s income tax and social insurance systems. The benefits include dramatic simplification, improved returns to work, saving and investment, and reduction in tax evasion and avoidance.

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