President Reuven Rivlin launched the 2014 'Shmitta project' on Sunday, which aims to use the values of the traditional Sabbatical year to aid poor families in need nationwide.
During the course of the project, which was initiated by MK Ruth Calderon (Yesh Atid), five thousand families deep in debt will work closely with the government to follow - and implement - programs designed to better both their own lives on the personal level and the large-scale problem of poverty in Israel.
Rivlin opened the launch event, which was held at the Presidents' House in Jerusalem. The event was attended by 150 guests including MK Dr. Ruth Calderon, Professor Eugene Kandel, Head of the National Economic Council, Elhanan Glatt, Director General of the Religious Services Ministry, Knesset Members, representatives of NGOs participating in the project, and representatives from the business and public sector.
“During the last few ‘Shmita’ years, the discussion focused mainly on the agricultural significance of the mitzvah (commandment) itself. The mitzvah around the ‘remission of debts’, which is embodied in the biblical sabbatical year was hardly discussed in the public or religious debate," he stated. "The significant initiative presented by MK Ruth Calderon and the various partners in the initiative, revolved around restoring the relevance of the ‘Shmita’ principles, in its economic and social aspects. These are principles that Israeli society needs at all times, now, just as much as in biblical times."
“We share a common responsibility towards the world, and especially towards the society in which we live," he added. "Mutual trust, which originates in shared responsibility, was the glue that held the people of Israel in exile. It was eventually discovered that this fabric was particularly significant in the establishment of the State of Israel and in the building of this country."
"Were it not for mutual guarantees we would have been washed away in the rough waters of history," he continued. "Mutual responsibility saved us and consolidated our identity as a people. We are used to saying that ‘All of Israel's people are responsible for one another’. And indeed, all of Israel's people are responsible for each other, meaning, that the debt of the individual, (whether it be a moral, economic or another kind of debt), becomes in a sense a public debt."
Rivlin added, however, that the program aims to end the problem of deb accumulation on the large scale - through financial education, not only short-term reforms.
"It is important to emphasize that I am not naive," he said. "Debt accumulation takes a toll and the arbitrary erasing of that debt is not only unjust, but also disrupts the order of economic life. A healthy economy cannot enable limited resources to be provided for free. Therefore the ‘Shmita’ project translates the principle of fiscal relief into to the sharing of responsibility - by families in debt, creditors (the business sector) and by the general public.”
The President emphasized that there are actions that can be taken to help families with lesser financial means to improve the economy.
He said, “Let me suggest economic principles that are in the spirit of the ‘Shmita’ year. These principles can be applied at the macroeconomic level and not just dependent on the good will of caring citizens."
"Firstly, we have to minimize the worrying phenomenon of increasing debt in households (which endangers so many families) so that it will be lowered in advance. Part of the solution most likely lies in training and financial education, but the extent of the problem indicates that action by the regulator should also be considered. Such action might restrain to an extent, the motivation to lend money on the part of the relevant bodies."
"Secondly, we should examine the consequences of establishing a credit association (cooperative banks), which give expression to the values of mutual guarantees and trust in the credit system itself (in the spirit of the teams' recommendations to increase competition in the banking sector). In this framework, there is a pre-existing higher obligation between the borrower and the lender which can lower the cost of debt. In this regard we can find inspiration in the models developed in the hareidi community, which manage to translate mutual guarantees into an effective economic-consumer force."
"Finally, there needs to be a more significant and responsible mobilization of the business sector (particularly large companies) toward the economy in which they operate. These companies are not exempt from asking themselves moral questions regarding concern for their customers, their employees' welfare and the society in which they operate."
“The sabbatical year is an opportunity to create confidence-building measures in the triangular relationship between the regulator, the companies and the public consumer - trust, which was damaged in recent years, especially on the part of the consumers," he concluded. “The sabbatical year offers us justice, which is not merely charity. It carries the voices heard around the country during the social protests that took place in the summer three years ago. Let's find out what individual part we all play in establishing trust and strengthening mutual guarantees, between the different parts of the economy and Israeli society. Thank you to all the people involved, and all the partners in this blessed project.”
MK Calderon said, “This project is the actual implementation of the values of the Jewish Sabbatical, whose goal is to help families deep in debt and at the same time to realize the Jewish biblical values in a contemporary and groundbreaking way. Through this, we can show that it isn’t by turning our backs on Jewish traditions but rather by serious action and commitment to Jewish culture, that will allow us to move forward as a united society.
"It should be noted that the project will support approximately five thousand families in debts that do not allow them to proper function economically," she continued. "These families are prepared to commit to a comprehensive process, which includes considering to sources of income, income and expense management, professional training and acquiring tools for the correct economic control - personally and as a family.”
Israel's poverty problem has become headline news over the past several months, after it was revealed Israel has one of the highest poverty rates of OECD countries and that 50% of Holocaust survivors live below the poverty line.
Recently, the Knesset allocated 1.7 billion shekel ($550 million) to fight poverty nationwide, which Welfare Minister Meir Cohen (Yesh Atid) hailed as a "historic moment."