"I've again become relevant after I was forgotten," said former Ministry of Finance director general Yossi Bachar at a "Forbes" conference today. He made the comment in response to his critics who blame his capital market reforms for the current pension savings crisis.
In another barb at his detractors, Bachar continued, "I'm not running for political office, so I'll stick more closely to the facts. The trend of taking the government out of the capital market and the use of the capital as the main component for growth of the real economy is a welcome trend. It didn’t begin six or four years ago, but in the 1980s, and included Labor Party governments, when at the same time there were problems subsidizing pension savings."
Bachar said, "We brought in a number of measures that included tax changes, but we said that restructuring also necessary to create diversification, which in time came to be called the Bachar reform, for which I accept full responsibility. Let us not get confused; serious people sat on that committee and they decided what was decided, and I am ready to argue today on the link between this and what is happening now in the international market.
"We're now looking at a crisis that we did not create, and we're asking how it is affecting us. Let's note some facts about long-term savings. Something has happened in international markets, and there is no reason why that should not affect us. It affects everyone in every country that comes to mind. The moment we decided to become part of the global market, we became part of the story."
Bachar added, "Some people claim that that the capital market reform contributed to the fact that we're reached a crisis as a strong economy, whose growth is driven by the private sector. I'm not saying that there were no flaws, because there are flaws everywhere.
"People are saying that if there was regulation, it would have solved the problem. We advised making changes in capital market regulation, but let's admit the truth: it is sometimes difficult in Israel to enact legislative changes that depend on regime stability. Two weeks after the Bachar reform was passed, Israel's finance minister [Benjamin] Netanyahu resigned, and I must tell you that he had a very strong role in the Israel's economic boom in recent years."
