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Seaport battle looms as Israel plans new competition
Israel is betting its economic future on high-tech exports but faces a low-tech bottleneck in state-owned seaports subject to work stoppages and slowdowns because of the enormous strength of their unions.
All that may be about to change.
The government, for years unwilling to risk a confrontation that could paralyze trade given that 99 percent of exports and imports are transported by ship, last month pledged to end the monopolies of the two main ports of Ashdod and Haifa.
By introducing private piers to compete with the two ports, service would improve and prices would drop across the board, Prime Minister Benjamin Netanyahu said.
The port unions - possibly the most powerful in the country with just 2,400 workers earning double the average public sector salary - are likely to be severely weakened and may have to make concessions or face layoffs.
At a time when the middle class is squeezed by slow economic growth and high costs, there is little sympathy for their plight among average Israelis, let alone businessmen.
“Labour unions in the ports are very strong, very belligerent, very egotistical and are using their control of a key state property against the state,” said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce.
The unions declined to speak with Reuters for this article and referred questions to the umbrella Histadrut labour federation.
But in a rare television interview in January, the head of the Ashdod union Alon Hassan defended the role of collective bargaining and the right to strike, protected by law, and said the port workers were misunderstood.
“I have no criminal background, and sadly, they point at me in the streets like some mafioso,” he told Israel’s Channel 10.
“I see and hear and read that on the outside they don’t like us, the port workers, and me specifically. That they paint me as an extortionist, a problematic person. Something I am not.”
The unions will not budge, he said: “I am protecting the workers’ agreements that have been signed for tens of years. Fanatically. I am not open to unilateral attempts to breach such agreements.”
Articulating the government’s position, Finance Minister Yair Lapid said simply: “Let there be war.”
Netanyahu was reelected in January with a mandate to do whatever it takes to fix the moribund economy, which grew 3.2 percent in 2012, its slowest pace in three years. Hundreds of thousands of Israelis staged unprecedented nationwide protests in mid-2011 over high housing costs and soaring prices.
Netanyahu has placed the blame for the high cost of living on monopolies and cartels that prevent competition and began cracking down, starting with the country’s most vital services.
On April 21 the government approved an open skies deal that liberalizes aviation between Israel and Europe and is expected to bring in more foreign airlines and lower air fares. A two-day strike at flag carrier El Al and two smaller Israeli airlines ended with the government agreeing to pay a higher portion of the airlines’ security costs.
Car importers and television operators are also in Netanyahu’s sights.
Few groups wield as much power as the port workers, as gatekeepers for Israel’s international commerce, however.
The Manufacturers Association of Israel said the country lost 25 million shekels ($7 million) directly and tens of millions more indirectly in a dispute at Ashdod port in April.
The workers, who held a 10-day slowdown in protest at a new rule requiring port navigators to stay on site throughout their shift even at quiet times, forced 32 cargo ships to wait hours off the coast.
Five ships were eventually redirected to Haifa about 80 miles to the north and five others simply “took off”, the manufacturers’ group said.
Netanyahu has faced off with the port workers befor
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