Squash court: Israel’s controversial law reform

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Hello and welcome to the Intelligence from the Economist. I'm Ora Ogumbiyi.

And I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.

Vietnamese children are racing ahead of those in neighboring countries. We take a closer look at the secret source of their first class education system. Could the rest of the world take a leaf out of their books?

And Islamic scholars are divided on whether cryptocurrencies violate prohibitions on the charging of interest and speculation gambling, whether crypto ends up decreed as halal or haram. Plenty of Muslim investors and countries are already in the market. First up though, In Israel's parliament yesterday, opposition lawmakers chanted shame, shame, shame in Hebrew. Then they walked out, refusing to vote on legislation that will limit the powers of the country's Supreme Court. Their boycott meant the law was passed. 64 votes in favor, 0 against, 0 abstainers. The changes were pushed through by the most religious nationalist element of Prime Minister Benjamin Netanyahu's coalition government. Even after months of protests, we fear.

We gone down to a dictatorship.

Yesterday those protests intensified. The demonstrators were met with water cannon. The new law will crimp the Supreme Court's ability to strike down laws it sees as unreasonable and is just the first of a series of votes that threaten the country's democratic functioning.

For the first time in 40 years or so, since the Supreme Court began what was seen at the time as this judicial activism revolution, the powers of the Supreme Court to hold the Israeli government to account have been rolled back.

Anshul Pfeffer writes about Israel for the Economist.

The law passed by the Knesset yesterday takes away one of the main judicial review tools of the Supreme Court, the reasonableness standard. And it means that the Supreme Court now has a lot less power to intervene in government decisions or appointments, especially the ones which are most egregious. And this has been carried out by a government widely viewed as the most far right and the most religious in Israeli history. So obviously, this has a lot of Israelis very worried.

And so how has the government justified making this change?

So Benjamin Netanyahu, the prime minister whose government introduced this law, said, this is not the death of Israeli democracy, this is strengthening Israeli democracy. This, The argument coming from the coalition is that the Supreme Court has taken powers without any democratic mandate, and that the reasonable has put a group of unelected judges above the government. They are the ones who can decide what is reasonable and not the politicians who have been elected by the people. And this is, according to them, an imbalance between the Israeli powers. And all they've done is to restore the balance.

And according to others, there's a consensus.

Amongst almost all Israeli legal experts, even those of them which were not big fans of the reasonable standard as it was done, or as it was interpreted by the Supreme Court in past years and decades, there's a consensus that this is basically an attempt by the government to immunise it, to make any of its decisions almost impressive, impregnable to effective judicial review. And this gives the government almost unlimited power. We're talking about a country which doesn't have a written constitution, doesn't have a bill of rights. There's only one parliament, it's a unicameral system where the government basically controls the Knesset, Israel's parliament. And in this situation, the Supreme Court is the only form of checks and balances on the government's power. And once the Supreme Court is weakened, as it has been now by this law, democracy in Israel is, as a result, weaker as well.

And clearly the people didn't like the sound of this before it happened. What's been the reaction since?

Protesters against the law, and we've already been in Israel now for almost eight months in a prolonged campaign of protest against the government and against specifically these legal reforms, which were first rolled out at the beginning of January, the protesters took to the streets. There were massive protests outside the Knesset while the vote was ongoing. They spread throughout the afternoon and evening to other parts of Israel and culminated in a massive protest on the Aon highway, which is the main transport archery through Tel Aviv, where into the early morning there were pitch battles with police, water cannons mounted, police charging, And the road was blocked for about four or five hours. And this is, like I said, just one stage in a long period of protest which has been ongoing in Israel and will continue now because the government is planning to pass more of these laws. The protests are not just on the streets. We're seeing influential groups within Israel finding other ways also to voice their displeasure at the government. Business groups have closed down shopping centers. There's talk of a possible general strike. There already was a one day general strike in March which forced the government then to back down. And perhaps most crucially for Israel, there are thousands by now, perhaps tens of thousands of reserve officers in the Israeli army and the Israeli Air Force who are announcing that from now on they will not be turning up for their voluntary service. And since the Israeli military relies to a very large degree on its reserve officers, this could have some serious implications for Israel security.

So why is it that Mr. Netanyahu and his government want this so much if it is so clearly against the will of the people?

It seems that for Netanyahu, the motives now are more personal. The fact that he himself has been put on trial for corruption, charges of bribery and fraud, which he of course strenuously denies, but that does seem to be one of his main motives. There is a wider ideological issue for many parts of Netanyahu's coalition, both within his only Qud party. There is a very strong anti Supreme Court faction there led by the current Justice Minister Yariv Levin, who who's very obviously calling the shots right now. There are far right and religious parties who resent the very idea of there being a liberal minded Supreme Court which can hold the government to account. So these groups have come together in this new coalition which has been in office for less than eight months. And they're the ones who are egging this on. And even at times, Wendy Netanyahu, who is more cautious, is more risk averse, has been prepared to perhaps back down or to delay the votes and have some kind of process of dialogue with the opposition that they have been pushing Netanyahu to legislate. And we saw some of the more radical ministers arguing during the vote with their colleagues and basically beating them down. And Netanyahu sitting back, allowing this to happen. And yesterday it's clear that the hardliners in his government won the day.

So what next for this law amidst all of this chaos?

So there are a number of questions now. First of all, will the government take advantage of the fact that this limitation on its powers has been taken away? What will they do with that? There's a big question about the independent minded attorney general. Will the government now replace her? And the new attorney general will be much more friendly towards anything the government wants to do. So that's one action if the government takes will certainly cause a further eruption of protests. And then the question is, what next for the protest movement? Do all these Israeli officers who said that they won't turn up for service actually follow through with their threat? What does that mean for the Israeli military? Will there be a general strike? Can the government withstand serious pressure from the business sector? And then the Supreme Court can still play a role here.

How so? How can this Supreme Court, with its powers stripped back, have a role here?

They have already been petitioned by a number of civil rights groups by opposition parties to disqualify this law. If that happens, is Israel is basically in a constitutional crisis. And even if the next couple of months, things somehow calm down, in October, the Clinton will be back in session. It needs to elect two new Supreme Court justices, including the new president. There's going to be another very big clash between the coalition and the opposition over the way in which those justices are appointed. Currently there's a commission in which there are both judges represented and members of the Israel Bar association alongside politicians. The coalition wants politicians to be in charge of that process. And that is going to be, I think, the next major battle for the future of Israel's democracy.

Thanks very much for your time, angel.

Thank you for having me.

Vietnam's prosperity has been on an upward trajectory for years. Rapid economic growth means the country's GDP per person now stands at just over $3,750. That's still lower than its regional peers, Malaysia and Thailand. But Vietnam has one particular strength that could help it close that gap further its education system.

So to understand how well an education system is performing, you need to look at how well the students are doing in that system.

Vishnu Padmanabhan is a data journalist at the Economist.

And when you look at the performance of Vietnamese students in international assessments of reading, maths and science, they score really, really well.

Tell me more about that.

There are two things that really stand out about Vietnam. The first is Vietnam's great performance in education comes at a relatively lower level of income. So across the world, richer countries tend to have better education systems. But data from the World bank shows that Vietnamese students perform better not only than their richer counterparts in the region, like Malaysia and Thailand, but even countries such as Britain and Canada that are far richer. And then the second standout feature, I think, is that the quality of Vietnam schools have actually improved over time. A study published last year by researchers at the center for Global Development found that in more than two thirds of the developing world, the quality of education deteriorated since the 1960s. But Vietnam is one of the few countries where schools have actually improved over time.

And how have they managed to do that?

Well, the secret lies in the classrooms. Children in Vietnam learn far more at school, especially in the early years. A study published in 2020 by Abhijit Singh, who's an economist at the Stockholm School of Economics, demonstrated this quite well. He basically examined data from identical tests taken by students in Ethiopia, India, Peru, and Vietnam. And he found that between the ages of 5 and 8, Vietnamese children race far ahead than children from the other three countries. Just one more year of education in Vietnam delivered far more to children. Specifically, he found that a year of schooling increases the probability that a child can solve a simple multiplication problem by 21 percentage points. And for comparison, in India, the uplift is six points. So that's a huge difference.

And what accounts for that disparity? What is Vietnam doing that the rest of the world isn't?

Several studies have shown that the caliber of teachers in Vietnam is just far better than in other countries. And that's not because they are better qualified, but because they're simply more effective at teaching. So, for example, one study which compared Indian students with Vietnamese students showed that Vietnamese students perform much better than Indian students in maths. And much of the difference could be attributed to the fact that Vietnamese teachers were better at teaching maths to students.

And how did Vietnamese teachers get so good?

For a variety of reasons. One is that they're managed very well, so they receive frequent training. They have the freedom to make classes more engaging. They're incentivized quite well as well. Teachers posted to rural areas are paid more than those working in cities. But I think the most important factor is that teachers are assessed based on the performance of their students. So teachers whose pupils do well are rewarded with titles. For example, there is a title called the Teacher. Excellent title, which is quite prestigious. And then another important factor is the threat of running foul of the ruling Communist Party. The government in Vietnam is really committed to education, and that's an obsession that goes back all the way back to Ho Chi Minh, the country's founding father. And many of the principals and schools are Communist Party members. So that adds to the scrutiny of teacher performances. And then a final other important factor, I think is the fact that Vietnam's society is also quite obsessed with education. People I spoke to in Vietnam said much of this is down to ingrained Confucianism, which means families really value education. Even in poor villages, households spend money to send their children to tuition classes and private lessons to supplement their school education. And all of these factors, I think, come together to help explain why Vietnamese children do so well in school.

And how will this stellar education system help Vietnam's economy in the long run?

It already has. So Vietnam's economy has grown significantly in recent years, and a lot of that is down to the solid education children receive, especially in the early years. But now there's also several challenges. Growth, for example, is testing the education system. Firms in Vietnam want workers with more sophisticated skills, such as team management and softer skills, which Vietnamese students are currently not trained for in the education system. There are criticisms that Vietnamese schools focus too much on tests. And then the other challenge with growth has been that a lot of people have moved to cities, which means schools in urban areas are increasingly overburdened. And then more and more teachers are forsaking jobs in schools for higher paying jobs in the private sector. So for Vietnam's education story to continue, the government will have to tackle all of these issues.

Vishnu, thank you so much for joining us.

Thanks, Lorraine.

Thanks for having me.

He told us a while back, bitcoin, we bit our fingers, didn't we? You know why they call it bitcoin? It bit all of us. Subhanallah. I was bitten too, by the way.

Ismail Ibn Musa Menk is a Muslim scholar in Zimbabwe with a substantial online following. In one of his videos, he ventures into the topic of cryptocurrency and whether it's an acceptable form of finance.

That doesn't make it haram. That's another ruling all on its own.

Haram, meaning forbidden.

But we were bitten. Mashallah. Those into crypto. It's the future. Allah bless you. I hope you got that little message. Okay.

He's far from the only one to be grappling with questions around this relatively new financial instrument.

Scholars have been debating for a couple of years now whether cryptocurrency is permissible in Islamic finance, but it's still quite a novel topic of discussion.

Anne Hanna is a news editor at The Economist.

And there are some that say it is permissible. But there are quite a few heavy hitters like Shaw Ihem, who's Egypt's grand mufti, who think it's haram or forbidden. He issued a fatwa in 2018 endorsing a ban on a mainstream cryptocurrency.

And so what is the heart of the debate about whether it is halal or haram?

There are a couple of things that are completely forbidden in Islamic finance, and two of those things are riba, which is interest, and gharar, which is uncertainty or speculation. So any interest based loan, for example, is prohibited. And gambling is also haram. Scholars that say cryptocurrency doesn't inherently involve either of those things say that it's permissible. And some of them even say that it's better than traditional currency because crypto doesn't involve charging or paying interest at all. But other scholars are more divided on the kind of aspect of gharar. Some say that the crypto market is too volatile, so there's too much speculation, there's too much uncertainty. But there are some that say that qarar isn't inherently a part of trading crypto and that's why it remains permissible.

So what you're describing sounds like a debate between Islamic scholars. What about people more widely?

So I think people are divided on that. I think it depends on a, their interest in finance, their interest in that kind of space, and also their levels of piety. But what we can say for sure is that people in Muslim countries haven't been deterred from trading in crypto. Last year, the Middle east and North Africa had the fastest growing cryptocurrenc market in the world. It's still small, but it's definitely growing. Egyptians spurred that growth, spurred by the inflationary pressures on their economy and the devaluation of their currency as well. And a growing proportion of remittances to the country were crypto remittances.

Okay, and what about at the sort of national level for countries whose leadership is tied strongly to Islam?

Yeah, so governments are having those kind of debates internally as well, and they've taken different approaches. So as already mentioned, Egypt banned Bitcoin in 2018, but they are showing signs of warming to crypto. The national bank recently announced that it's going to be working on a project to build a crypto based remittance corridor between Egypt and the uae, where a lot of Egyptians work. And the Gulf is kind of a standout in this area. A few countries there were early adopters. So Bahrain was quite an early pioneer in the region. Its central bank was the first in the Middle east to issue a regulatory license to a crypto exchange, and it also declared it Sharia compliant. Dubai in the UAE has become a hub for crypto companies that serve companies across different parts of the world as well. And there's a few signs there that big players are keen to promote more local adoption, too. So Islamic Coin, which is a new local cryptocurrency backed by several ruling family members, is set to be publicly traded in September. They've been marketing it as 100% halal, and they're saying that 10% of any issued amount is going to a Muslim charity. In terms of what governments do, they will move in the way of the world, but I think they will regulate things more than in other countries, and I think that's what they're setting out to do. I think scholars think if it's regulated, there's less chance that people will fall into uncertainty.

So where do you think this is going? You say that it's still being debated. Where do you think the debate ends?

It's going to be an ongoing and conclusionless debate. Ultimately, I think people are going to disagree on that aspect of Garrod for a very long time. Where is the line on speculation? And yeah, I think scholars are saying still that they need to understand the ins and outs of crypto and the levels of uncertainty in the markets before they actually decide whether it should be embraced or damned.

And thanks very much for your time.

Thank you.

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