Economic Discontent, Soaring Prices Push Israelis Into Streets to Protest

The revolutionary spirit that has touched the entire Arab world may now have even reached Israel.

In the face of growing discontent with the economy and almost two weeks of protest over a housing crisis, Prime Minister Benjamin Netanyahu has introduced a series of reforms

The PM said his program will bring "huge changes" and alleviate the housing crisis that faces students, young married couples, and demobilized soldiers by making dwellings more affordable.

Acknowledging that housing was a “real problem,” Netanyahu also vowed to reduce the bureaucracy and improve public transportation.

Specifically, the Prime Minister said he will fast-track the application for the construction of more than 50,000 new houses over the next year and a half.

Israelis had been protesting the housing shortage outside of the parliament building and blocked off roads in major cities like Jerusalem, Tel Aviv and Haifa.

According to reports, home prices surged 35 percent (on an inflation-adjusted basis) from December 2007 to August 2010

The public is also concerned with rising costs – especially with gasoline, water and food staples like cottage cheese -- and many are unhappy with how Netanyahu has handled the economy.

Moreover, Israeli physicians are pushing for pay raises and better working conditions, while some who work in public hospitals have called a strike. The head of The Israeli Medical Association chief has said he will undergo a hunger strike to demand action from the prime minister.

On the surface, however, the Israeli economy appears to be surging. According to reports, since 2004 the GDP growth rate has averaged a healthy 4.5 percent, while jobless has almost been cut in half from 11 percent to 6 percent.

However, the wealth gap appears to be widening, and there are complaints about corruption in government and corporations.

For example, the Los Angeles Times reports that over the past five years, while average income of Israelis has climbed by 17 percent, food prices have jumped by 25 percent. Over that period, water rates have soared 40 percent and gasoline prices have risen 23 percent. The average apartment price has skyrocketed 55 percent and rent, by 27 percent.

On the other hand, while real wages have remained stagnant since 2000, the Israeli stock exchange has increased in value by 300 percent – suggesting the wealthy are getting richer leaving the rest of society behind.