One of the graver ills afflicting the world, Israel included, is the scourge of protectionism. A combination of a lack of economic understanding and pressure from interested parties means countries seek to "protect" local producers against external competition by prioritizing domestic goods. In Israel, this affliction is known as "buying blue and white."
What's so bad about buying blue and white? Generally speaking, nothing is wrong with it. The problem begins when the public is forced to pay more for locally produced goods, thus harming Israelis far more than helping them. There's no logic behind it.
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Take for example the Mandatory Tenders Law, which among other things prioritizes the purchase of Israeli-made goods, even if their price quotes are 15% higher than their competitors. Supposedly, this is a matter of patriotism and favoring Israelis over foreigners. In actuality, however, we need only ask ourselves: Who is footing the bill for this 15% difference? And the answer, of course, is Israelis – you and me.
Thus, under the pretext of helping Israelis, it is Israelis who are harmed. We don't always notice it, because the payer is often the "state," as if this entity is completely detached and independent of taxpayer money, and because the losses are dispersed over a great many people, each one of whom incurs only a minute loss.
On the other hand, the main beneficiaries are a clearly discernible and usually very exclusive group of people who make a large profit off the "blue and white" policy. The damage to regular Israelis, though, is undeniable.
Just last week we saw one example of this injustice when the Jerusalem District Court re-delayed public transportation tenders intended to ease the situation for commuters, add buses and improve service. The Transportation Ministry's tenders committee had decided that the Mandatory Tenders Law did not apply in this case and only stipulated a modicum of preference for Israeli companies. The court ruled in favor of "Haargaz," an Israeli company which demanded that the tender favor it in accordance with the Mandatory Tenders Law. The committee was forced to amend the tender and include such a preference, and add a "reciprocal procurement" clause against foreign companies that would necessarily make their bids more expensive (and again, award Haargaz a hefty payday).
This, incidentally, was not the first time the public paid the price for favoring Israeli factories over Israeli importers. Two years ago, too, Haargaz and another Israeli bus-making company, "Merkavim," won an Egged bus tender in which their buses were chosen – even though the chassis they use for their buses are imported from abroad and are considerably more expensive, and just as good as buses that could have been imported from China.
You'll say: But we want to help local factories. Which is all well and good; but are importer jobs not local? Do they not employ workers who want to make a living? What's the difference between a company that employs Israelis to import buses and a company that imports bus chassis and builds the rest here? And if you argue that one company employs more people than the other – then the numerical advantage of an entire public, which has to pay to for this difference, is certainly overwhelming.
Imagine a family in which the parents require all their children to buy expensive furniture from one sibling, even though he himself purchases the raw materials from abroad. This would certainly be viewed as discrimination, not fairness. Support from family is important, but the other siblings are equal members of the family, so why should they suffer for the sake of their brother's business? And if his company can't survive without his family's help, perhaps it's a sign that he needs to choose a new, more profitable line of business?
The state's deference to "blue and white" products at a huge mark-up is equally discriminatory and outrageous, even if comes nicely wrapped in noble rhetoric. In essence, the state is favoring a small group of Israelis over another group – the importers – and an entire public that must foot the bill.
