c ) the increased rate of participation in the labor market is evident in all parts of the country, including outlying areas ( the northern and southern districts ). d ) the rate of employment of israelis is rising in all industries, including the lowtechnology ones ( such as construction, agriculture, hotels and catering, and electricity and water ). e ) the average real wage is rising in all industries, including the low - technology industries. what conclusion do we draw from this? it ’ s very simple : the longer we stick to the path of rapid growth, the more people will be absorbed in the labor market, and the standard of living of all segments of the population will rise. hence the importance of rapid and continuous growth to the economy, society, and the country, as everyone enjoys its benefits. the need to maintain fiscal discipline in order to achieve rapid and continuous growth, the government ’ s strategy – which enables the economy to continue to grow and economic and financial stability to be maintained – must be adhered to. the essence of this strategy is fiscal discipline, alongside the bank of israel ’ s interest rate policy, and the continued process of structural reforms in areas that promote growth and improve the country ’ s social fabric. one such area, possibly the most important, is without doubt education ; hence the vital importance of a comprehensive reform in this field. i turn now to fiscal discipline. in order to escape from the recession that gripped the economy in the early 2000s, the government adopted a fiscal strategy aimed at reducing both the share of its expenditure in gdp, which had reached 52 percent, and also the budget deficit. there were two good reasons for doing so : the need to free resources for the private sector, which is the main source of growth, and the need to reduce the debt burden, which in 2003 had reached 102 percent of gdp and was threatening to undermine economic stability. the situation was so serious that we had to obtain us government guarantees so that we could borrow on the international markets. as a result of that policy, and with the extra advantage of global economic growth, since mid2003 the economy has been growing at an impressive pace of more than 5 percent a year, the debt burden has been reduced to 82 percent of gdp, the government ’ s interest payments on its debt fell by more than nis 10 billion, the government ’ s share of gdp has fallen to below 45 percent, exports are expanding swiftly, the current account of the balance of payments is showing a surplus

stanley fischer : tomorrow ’ s economic agenda address by professor stanley fischer, governor of the bank of israel, to the israel business conference, tel aviv, 10 december 2007. * * * the announcement in the newspapers about the israel business conference bears the slogan “ come and join us, so that you ’ ll be part of tomorrow ’ s economic agenda ”. and that is what i would like to talk about today, “ tomorrow ’ s economic agenda. ” the objective of such an agenda should be rapid and sustained growth, the benefits of which would be enjoyed by the whole population. such growth is critical for the future of the economy, the future of the society, and the future of the country. the reason is simple, and is like the effect of compound interest : if, for example, we manage to grow during the next 25 years at an average rate of 6 percent a year, in the year 2032 israel ’ s gdp will reach nis 2, 830 billion ( at 2007 prices ), compared with about nis 660 billion in 2007. if on the other hand the economy grows at only 3 percent a year over the same period, gdp will reach nis 1, 380 billion. that is a huge difference of more than 100 percent, and proves what my late friend professor herbert stein used to say : “ the difference between 3 percent growth and 6 percent growth is 100 percent. ” if we succeed in traveling along the path of rapid, sustained growth, we will have the means available to deal with the various problems confronting us – in the fields of education, the economy, the social fabric, security, etc. failure to do so will cost the country and society dearly. today i will speak about two important aspects of growth : ( 1 ) the fact that actual economic growth permeates the whole population ; ( 2 ) the need to maintain fiscal discipline. actual economic growth permeates the whole population growth of more than 5 percent a year, which the economy has been enjoying since 2003, significantly improves the standard of living of the whole population. a ) in 2006 the rate of poverty, based on the relative measure that relates mainly to income differentials, stopped rising. moreover, if we use the absolute measure of poverty, i. e., the ability to purchase a basket of basic goods, the rate of poverty actually declined in 2005 as well as in 2006. b ) the decline in unemployment since 2003 can be seen at all educational levels, including the lowest.