Executive Summary

Pandemic adds to
political instability
Israel has experienced a year full of positive and negative developments. 2021 was characterized by the last of four elections in two years; confrontation with Gaza; the fragility of the education system, with teaching split between in-person instruction and online learning; multiple developments related to the ongoing COVID-19 epidemic; and an economic rebound due largely to the country’s ongoing COVID-19 vaccination campaign, a recovering labor market and a booming tech sector.
Strong pandemic management -
followed by communications difficulties
Regarding the COVID-19 crisis, on 17 March 2021, Israel became the world leader in the number of citizens vaccinated (Simon 2021). The COVID-19 vaccination campaign – combined with the complete ban on commercial flights to Israel, and the closure of schools, commercial centers and other places of public gatherings – made it seem like the pandemic was under control. The Green Pass Policy was introduced to allow for the reopening of the economy, the education system and the cultural sphere with a minimum risk of elevating morbidity, as well as to encourage vaccinations. However, during the second part of the year, the public began to experience a sense of confusion, which was reflected in constantly changing regulations and government difficulties in explaining the regulations. The new government introduced softer restrictions, and granted residents greater freedom of choice and room for discretionary decision-making to navigate the complexity and inherent uncertainty of the pandemic.
Government formed
after fourth election
Regarding Israeli politics, after three rounds of elections that failed to produce a government, a new government with a very narrow majority was formed following a fourth round. Naftali Bennet was appointed prime minister, sending Benjamin Netanyahu – Israel’s longest-reigning premier who is currently standing trial on corruption charges – into opposition. The new coalition is Israel’s most diverse government to date, and includes parties from both ends of the political spectrum and, for the first time since the country’s establishment in 1948, an Arab party. Moreover, at the end of 2021, having failed to approve a state budget since the end of 2019, Israel’s parliament approved a state budget for 2021–2022, providing the country with some prospect of economic and administrative stability.
Unprecedented level
of conflict
In the national security arena, an Israeli-Palestinian conflict escalated yet again, when a barrage of rockets from Gaza hit Israel in May. The level of intensity was unprecedented: more than a thousand missiles were launched, leaving six dead and many injured. This round of confrontation also generated internal tension, instability and riots inside the country, with mobs of Jews and Arabs targeting each other in southern Israel and in Israel’s mixed cities.
Lockdowns undermined student learning
Regarding the education system, although the system formally returned to in-person teaching in 2021, the Education Ministry reported that – with the 2020–2021 school year overshadowed by the pandemic, and associated school closures and remote learning – students’ basic learning and reading skills declined by 30% compared to previous years (Kashti 2021). These major gaps in learning are most clearly seen among children from low socioeconomic backgrounds.
High-tech success
divides labor market
Finally, in economic terms, Israeli high-tech demonstrated a profound resilience in the face of the COVID-19 crisis thanks to its ability to identify current and potential global opportunities created by COVID-19, and to react quickly to the new work environment and conditions of uncertainty. The tremendous success of the high-tech scene, however, introduced a higher level of polarization to the Israeli labor market, where sectors characterized by lower wages and less-sophisticated skills (e.g., agriculture, tourism, hospitality and food services) showed a major decline in employment and their recovery has lagged behind the rest of the economy.
Kashti, Or. 2021, “COVID’s Untold Impact: Israeli Elementary Schools Witness a One Third Drop in Learning Skills” Haaretz. January 12, 2022. Retrieved from:

Simon, Ben. 2021, “With much of country vaccinated, Israeli leaders able to head out to meet voters,” The times of Israel, 12 of January 2022, retrieved from:
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