Kibbutz crisis

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The Kibbutz crisis (Hebrew: משבר הקיבוצים) was an acute economic crisis experienced by many kibbutzim in Israel during the 1980s, with some still facing challenges today. The crisis began in the early 1980s and worsened after the Israeli economic stabilization program of 1985, during which the inflation rate dropped dramatically. It was characterized by the accumulation of large debts and low returns for the kibbutzim. In addition to the economic hardships, many kibbutzim also faced social and demographic crises.^[1]

In 1989 and 1996, the Israeli government, Israeli banks, and kibbutz movements agreed on two debt arrangements to help resolve the economic crisis. The demographic and social crises were significant catalysts for the changes that many kibbutzim have undergone since the 1990s.^[2]

While many kibbutzim experienced an economic crisis, a smaller group of kibbutzim managed to avoid it. These kibbutzim largely remained loyal to the traditional values and way of life of the kibbutz. Many of them played a significant role in helping to repay the debts of the economically weaker kibbutzim.