Will Netanyahu Be Able To Work With His Finance Minister This Time?

Likely next Finance Minister Kahlon making his case
Likely next Finance Minister Kahlon making his case
Shaul Amsterdamski

TEL AVIV — When the coalition agreement is signed and the next Israeli government is officially formed as expected next month, it will have exactly 107 days to pass the state budget that will chart the country's economic course.

So even while the rest of the world may focus on the profiles of the incoming foreign and defense ministers, Israelis will be just as concerned that Prime Minister Benjamin Netanyahu has the right candidate for finance minister.

The first condition is that the person must really want the job, which was not truly the case in the last government's Yair Lapid. And beyond the candidate's own ability to address the much needed economic reforms, he or she must be able to work in harmony with Netanyahu and have his full support.

Indeed one of the biggest weaknesses of the previous government was Lapid and Netanyahu's inability to work together. Their relationship was probably doomed from the outset when Lapid made it be known that the position was actually a stepping stone for himself to become prime minister in the next elections.

At that moment, Netanyahu understood that he not only had a finance minister from a different political party with 19 seats (out of 120) in Parliament, but that he also had in front of him a direct political rival eyeing his throne.

Two free market men

The most likely scenario is that the next finance minister will be Moshe Kahlon. Netanyahu announced his intentions earlier this week to give Kahlon the job, though negotiations continue to be difficult. If Kahlon winds up in the post, we are likely to see a completely different model of organization of the ministry than during the previous government.

Firstly, Kahlon’s party "Kulanu" has only 10 seats in parliament, and therefore is less threatening to the prime minister. Kahlon is also a very different person than Lapid, not in a hurry to win power, whomever the prime minister might be.

Moreover, back in 2012, Netanyahu and Kahlon reportedly worked well together to push through a major reform of the mobile telephone industry. Ideologically speaking, the two men share much in common, both declaring themselves firm believers in the ability of the free market to resolve many of the ills in the economy.

Still, a shared belief in the private sector over the state was also supposed to mean that Lapid and Netanyahu were supposed to work together just fine. Still, the difference is that unlike Lapid, Kahlon is an experienced and skilled politician.

But the question this time is how far Netanyahu will go to support his new finance minister. Back when Kahlon was the communications minister from the Likud party, Netanyahu wound up withholding support for him when he realized Kahlon was too popular. Many Likud ministers said that Netanyahu acts this way with everybody. The hope is that with 30 seats in his pocket this time, Netanyahu has no political threat in the horizon, so he could throw his full support behind Kahlon.

The bigger issue now is how can the pair, even if they work well together, push through much needed economic reform. Many of the most important proposals slated, in order to succeed, would require facing down powerful state and non-state actors. So even if Netanyahu has the right man for the job, there is much hard work ahead for all.

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Iran-Saudi Arabia Rivalry May Be Set To Ease, Or Get Much Worse

The Saudis may be awaiting the outcome of Iran's nuclear talks with the West, to see whether Tehran will moderate its regional policies, or lash out like never before.

Military parade in Tehran, Iran, on Oct. 3


LONDON — The Iranian Foreign Ministry spokesman Saeed Khatibzadeh said earlier this month that Iranian and Saudi negotiators had so far had four rounds of "continuous" talks, though both sides had agreed to keep them private. The talks are to ease fraught relations between Iran's radical Shia regime and the Saudi kingdom, a key Western ally in the Middle East.

Iran's Foreign Minister Hossein Amirabdollahian has said that the talks were going in the right direction, while an Iranian trade official was recently hopeful these might even allow trade opportunities for Iranian businessmen in Saudi Arabia. As the broadcaster France 24 observed separately, it will take more than positive signals to heal a five-year-rift and decades of mutual suspicions.

Agence France-Presse news agency, meanwhile, has cited an unnamed French diplomat as saying that Saudi Arabia wants to end its costly discord with Tehran. The sides may already have agreed to reopen consular offices. For Saudi Arabia, the costs include its war on Iran-backed Houthis rebels fighting an UN-recognized government in next-door Yemen.

The role of the nuclear pact

Bilateral relations were severed in January 2016, after regime militiamen stormed the Saudi embassy in Tehran. Amirabdollahian was then the deputy foreign minister for Arab affairs. In 2019, he told the website Iranian Diplomacy that Saudi Arabia had taken measures vis-a-vis Iran's nuclear pact with the world powers.

It's unlikely Ali Khamenei will tolerate the Saudi kingdom's rising power in the region.

He said "the Saudis' insane conduct toward [the pact] led them to conclude that they must prevent [its implementation] in a peaceful environment ... I think the Saudis are quite deluded, and their delusion consists in thinking that Trump is an opportunity for them to place themselves on the path of conflict with the Islamic Republic while relying on Trump." He meant the administration led by the U.S. President Donald J.Trump, which was hostile to Iran's regime. This, he said, "is not how we view Saudi Arabia. I think Yemen should have been a big lesson for the Saudis."

The minister was effectively admitting the Houthis were the Islamic Republic's tool for getting back at Saudi Arabia.

Yet in the past two years, both sides have taken steps to improve relations, without firm results as yet. Nor is the situation likely to change this time.

Photo of Iranian Supreme Leader Ali Khamenei in 2020

Iranian Supreme Leader Ali Khamenei in 2020

Riyadh's warming relations with Israel

Iran's former ambassador in Lebanon, Ahmad Dastmalchian, told the ILNA news agency in Tehran that Saudi Arabia is doing Israel's bidding in the region, and has "entrusted its national security, and life and death to Tel Aviv." Riyadh, he said, had been financing a good many "security and political projects in the region," or acting as a "logistical supplier."

The United States, said Dastmalchian, has "in turn tried to provide intelligence and security backing, while Israel has simply followed its own interests in all this."

Furthermore, it seems unlikely Iran's Supreme Leader Ali Khamenei will tolerate, even in this weak period of his leadership, the kingdom's rising power in the region and beyond, and especially its financial clout. He is usually disparaging when he speaks of Riyadh's princely rulers. In 2017, he compared them to "dairy cows," saying, "the idiots think that by giving money and aid, they can attract the goodwill of Islam's enemies."

Iranian regime officials are hopeful of moving toward better diplomatic ties and a reopening of embassies. Yet the balance of power between the sides began to change in Riyadh's favor years ago. For the kingdom's power has shifted from relying mostly on arms, to economic and political clout. The countries might have had peaceful relations before in considerably quieter, and more equitable, conditions than today's acute clash of interests.

If nuclear talks break down, Iran's regime may become more aggressive.

Beyond this, the Abraham Accord or reconciliation of Arab states and Israel has been possible thanks to the green light that the Saudis gave their regional partners, and it is a considerable political and ideological defeat for the Islamic Republic.

Assuming all Houthis follow Tehran's instructions — and they may not — improved ties may curb attacks on Saudi interests and aid its economy. Tehran will also benefit from no longer having to support them. Unlike Iran's regime, the Saudis are not pressed for cash or resources and could even offer the Houthis a better deal. Presently, they may consider it more convenient to keep the softer approach toward Tehran.

For if nuclear talks with the West break down, Iran's regime may become more aggressive, and as experience has shown, tensions often prompt a renewal of missile or drone attacks on the Saudis, on tankers and on foreign shipping. Riyadh must have a way of keeping the Tehran regime quiet, in a distinctly unquiet time.

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