efforts to increase the participation in employment of those population sectors which are still characterized by low employment. the expected demographic trends do not support a high rate of growth in the coming years, and we will need to act to offset the effects on growth of those trends in order to continue to grow at a satisfactory rate. high growth rates are not enough ; it is very important that the fruits of growth are divided more equally by all parts of the population, so that they will support the reduction of poverty and of inequality in income distribution. we want inclusive growth, which supports the cohesion between various population groups, and within the groups themselves. social cohesion is a prerequisite for national strength, and for forming a society in which our children, as well, will want to live and raise their children. increasing labor force participation has an important role in this regard as well. in recent years, the cost of living has also been placed the top of the public agenda. this is partly related to the issues i already mentioned. improvements in productivity and the rate of growth will necessarily bring with them an improvement in the purchasing power of the israeli worker, in particular if the growth will be distributed more equally. but the cost of living is also partly related to the structure of the economy, to the level of competitiveness and the level of concentration of the economy. we must continue to strive toward an economy with a competitive environment, in which every producer can rely on its relative advantages and offer the best products and services, and in which every consumer has the access and ability to choose the cheapest and most appropriate goods and services. in recent years, we have seen important reforms in this area, and we must continue to carry out reforms which will reduce the concentration and increase competition. in the banking industry, as well, changes are occurring which increase competitiveness and the consumer ’ s ability to compare and choose the best and cheapest service. alongside these changes, it is important to continue the efficiency measures in the banking system, so that competitiveness will increase while maintaining the stability of the system – stability which is a necessary condition for a growing and thriving economy. housing prices have increased in recent years at an accelerated pace, and have also been a significant component in the rise in the cost of living. the bank of israel, in the framework of its economic advice to the government, assists with diagnosing the barriers and recommending the policy required to increase the supply of housing at a rate which can meet demand.

and we are witness to important initiatives in the area of academic education, mainly among the ultraorthodox sector. the israeli education system ’ s achievements in the international pisa tests are below average. we have recently had better achievements in tims tests, and i hope that they will also be reflected in the other tests. we must improve the achievements of the education system in order to achieve higher economic success. the world bank conducts a survey of the ease of doing business in all countries each year. in 2013, we were in 38th place, a very unsatisfactory placing. we have fallen significantly in this ranking during the past decade, not because our situation has deteriorated, but because the bureaucratic burden in other countries has lessened. the bureaucracy affects not only the ease of doing business, but also the cost of living. for instance, we see its effect on the ability to adjust the supply of housing and on housing prices. the concentration committee made two important recommendations on the matter of breaking apart pyramids and separating financial and real holdings. in this context, i note that if we require the immediate complete separation of financial and real holdings, there would be no people who would be able to be controlling owners of banks, since they would not be able to obtain the required capital through their activities in the real industries. it is possible that in another few decades, we will reach the conclusion that controlling owners are not necessary for banks. but in the meantime, i suggest not to conduct such large experiments on the financial system. i usually don ’ t make comparisons to greece, but this time i will do so : for hundreds of years, we have seen the ramifications that an unstable financial system has on the market. we have a strong banking system, which was of tremendous assistance in our ability to withstand the crisis. we must not endanger its stability, so i suggest not to limit cross - holdings of financial and real entities for now beyond what the concentration committee recommended when it set a benchmark of nis 6 billion for holdings of a real company by someone who holds controlling interest in a financial entity. i understand the logic behind the other suggestions, but i think that we must first of all examine the ramifications of lowering the number of entities that can hold controlling interest before we continue advancing in this field. labor productivity in the israeli economy is 20 percent lower than the oecd average. while we are a wealthy economy, it is a mistake to compare ourselves to the us and