Israel’s Economy Thrives While the Middle East Disintegrates

Jan. 19 2018

Now that the data have come in from 2017, it is clear that the Israeli economy had another successful year, expanding at a rate higher than that of any other advanced country. Israel’s per-capita GDP also grew, placing it above those of France and Japan. Daniel Kryger notes some of the implications regarding the Jewish state’s place in the Middle East:

The contrast between first-world Israel and the surrounding third-world Arab states is larger today than ever before. Israel’s GDP per capita is almost twenty times the GDP per capita of impoverished Egypt and five times larger than semi-developed Lebanon.

Like any human project, Israel is a never-ending work in progress and much work remains to integrate ḥaredi Jews and Israeli Arabs into Israel’s knowledge economy. Properly addressing Israel’s high costs of living requires more economic and legislative reforms and breaking up inefficient oligopolies that keep the prices artificially high. However, by any standard, the reborn Jewish state is a remarkable success story. . . .

Much has changed since OPEC launched its oil embargo against the West after the failed Arab aggression against Israel in October 1973. Before the collapse of the pro-Arab Soviet empire, China and India had no official ties with Israel and many Western and Japanese companies avoided doing business with Israel. Collapsing oil prices have dramatically eroded the power of oil-producing countries. It has become obvious that the future belongs to those who innovate, not those who happen to sit on oil. Israel has today strong commercial ties with China and a thriving partnership with India. Business delegations from Jamaica to Japan are eager to do business with Israel and benefit from Israel’s expertise. . . .

[For its part], the boycott, divest, and sanction (BDS) movement may bully Jewish and pro-Israel students on Western campuses. However, in real life, BDS stands no chance of succeeding against Israel. The reason is simple: reborn Israel has . . . become too valuable a player in the global economy.

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Read more at Mida

More about: BDS, Israel & Zionism, Israeli economy, Middle East, OPEC

Jerusalem’s Economic Crisis, Its Arabs, and Its Future

Oct. 18 2018

The population of Israel’s capital city is 38-percent Arab, making Arab eastern Jerusalem the largest Arab community in the country. Connected to this fact is Jerusalem’s 46-percent poverty rate—the highest of any Israeli municipality. The city’s economic condition stems in part from its large ultra-Orthodox population, but there is also rampant poverty among its Arab residents, whose legal status is different from that of both Arab Israelis and Palestinians in the West Bank. Haviv Rettig Gur explains:

Jerusalem’s Arab inhabitants are not Israeli citizens—in part because Palestinian society views acceptance of Israeli citizenship, [available to any Arab Jerusalemite who desires it], as acceptance of Israeli claims of sovereignty over the city, and in part because Israel is not eager to accept them, even as it formally views itself as having annexed the area. Nevertheless, they have a form of permanent residency that, unlike West Bank Palestinians, allows them unimpeded access to the rest of Israel. . . .

There are good reasons for this poverty among eastern Jerusalem’s Arabs, rooted in the political trap that has ensnared the Arab half of the city and with it the rest of the city as well. Right-wing Israeli political leaders have avoided investing in Arab eastern Jerusalem, fearing that such investments would increase the flow of Palestinians into the city. Left-wing leaders have done the same on the grounds that the Arab half would be given away in a future peace deal.

Meanwhile, eastern Jerusalem’s complicated situation, suspended between the Israeli and Palestinian worlds, means residents cannot take full advantage of their access to the Israeli economy. For example, while most Arab women elsewhere in Israel learn usable Hebrew in school, most Arab schools in eastern Jerusalem teach from the Palestinian curriculum, which does not offer students the Hebrew they will need to find work in the western half of the city. . . .

It is not unreasonable to argue that Jerusalem cannot really be divided, not for political reasons but for economic ones. If Jerusalem remains a solely Israeli capital, it will have to integrate better its disparate parts and massively develop its weaker communities if it hopes ever to become solvent and prosperous. Arabs must be able to find more and better work in Jewish Jerusalem—and in Arab Jerusalem, too. Conversely, if the city is divided into two capitals, that of a Jewish state and that of a Palestinian one, that won’t change the underlying economic reality that its prosperity, its capacity to accommodate tourism and develop efficient infrastructure, and its ability to ensure access for all religions to their many holy sites, will still require a unified urban space.

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More about: Israel & Zionism, Israeli Arabs, Israeli economy, Jerusalem