In Israel, recession pressures boil over into looting

Isolated outbreaks have erupted after beleaguered business owners or managers defaulted on debts, stopped paying workers and went into hiding.

An Israeli man takes items from the shelves of a God’s Blessing supermarket in northern Israel after the company declared bankruptcy.

Reporting from Hatzor Haglilit, Israel — First came the employees, shortchanged two months’ pay and laid off by the supermarket called God’s Blessing. They rifled through their shuttered workplace, helping themselves to crates full of groceries.

As word spread through the small town, the store’s jilted creditors joined in. They dismantled the light fixtures, ripped out wiring and absconded with the cash registers, even as television cameras rolled.

Within hours the parking lot was jammed with ordinary shoppers. They left car engines running and brought their children to help pick the shelves clean. Finally even the shelves were hauled away, leaving latecomers to scrounge the floor for leftover fruit.

The two-day spree shocked and puzzled Israelis, who assume that the rule of law prevails in their society. Yet this and other recent cases of looting have coincided with news that the economy, flattened late last year after half a decade of enviable growth, had slid into recession.

The outbreaks are isolated and few, but labor activists and social commentators warn that many Israelis are becoming desperate.

“What we’re seeing are small stories about collapsing businesses and layoffs that threaten their livelihoods,” said Dafna Cohen, a spokeswoman for the Histadrut, Israel’s trade union federation. “These small stories are the beginning of a big fire.”

For months, the spreading hardship has been obscured as Israel’s political discourse focused on regional security threats and the fight with Hamas in the Gaza Strip. But aides to Prime Minister-designate Benjamin Netanyahu say the economy will top his agenda after he takes office in the coming weeks.

The economy is expected to shrink 1.5% this year, according to the Bank of Israel, compared with growth rates of 4% or more in the previous five years. The global downturn is taking its toll; the bank forecasts an 11% decline in Israeli exports, which account for half the value of everything the country produces.

But as the crisis moves from one workplace to another, Israelis are blaming other Israelis: the tycoons who gambled in overseas real estate and lost, bringing down Israel’s financial markets; the bankers who tightened credit; the entrepreneurs who faltered under impossible debt burdens and started bouncing checks.

The anarchy at the supermarket is one of three well-publicized cases of looting that erupted after beleaguered owners or managers defaulted on debts to suppliers, stopped paying workers and went into hiding.

Victims intent on payback have taken matters into their own hands.

Nearly 200 workers locked themselves inside the Chicken of the Valley processing plant in Ramat Yishai last week after the principal owner vanished, having failed to pay their February wages.

To cut their losses, they raided the freezer and sold about 100 chickens to motorists in the streets of Haifa, a nearby city. Holding up protest signs along with red plastic packages of frozen fowl, they turned the looting into a televised rally against the remaining shareholders’ threat to close the plant.

“It’s a symbolic act,” said Moti Saar, the plant’s union representative, who has joined a round-the-clock encampment of protesters inside the workplace. Selling pilfered chickens “won’t cover our lost wages,” he added, “but it says something: ‘People want to work.’ ”

Like the supermarket, the chicken plant is in the Galilee, a northern region with higher unemployment and lower public investment than Tel Aviv and other wealthier areas in the center of Israel.

Many in the Galilee feel neglected and angry that policy discussions are mainly about bailing out tycoons who lost other people’s money.

“There isn’t much talk about saving people who do an honest day’s work, earn the minimum wage and don’t have much bargaining power,” said Barbara Swirsky, executive director of the Adva Center, a think tank specializing in economic and social issues.

Tel Aviv has its own tale of pain and retribution.

The Pine Garden banquet hall and its artificial lawn once hosted the weddings, bar mitzvahs and corporate dinners of the city’s elite. The business collapsed in January as wealthy Israelis began to feel the recession and thinned out winter social calendars.

The owner fled the country, reportedly leaving debts of nearly $20 million to banks, suppliers and families that had plunked down advances as high as $30,000 for their celebrations.

By Richard Boudreaux
March 19, 2009

Source: Los Angeles Times

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