Photographer: Marji Lang/LightRocket via Getty Images

Israel Faces Up to Arab Inequality as Its Growth Stalls

  • Government investing 13 billion shekels to correct budget gaps
  • Arab leaders skeptical the promised funds will be enough

A donkey rummages through a trash heap outside an elementary school in the Israeli Arab city of Tira as children toss a soccer ball at a rimless backboard. Squatters, drug dealers and prostitutes have laid claim to an unfinished housing complex a few blocks away.

Just a 15-mile drive from the Jewish city of Ra’anana, with its leafy parks and top-notch schools, Tira is emblematic of the ills that have made so many Israeli Arab communities economic underachievers.

With more than half of Israel’s 20-percent Arab minority living under the poverty line of 7,876 shekels ($2,080) a month for a family of four, their plight is a key reason the country’s economy is growing at half the rate of its peak years. The government’s pledge to redress decades of budgetary discrimination by adding an estimated 13 billion shekels to existing spending to build roads, clinics and schools in Arab communities, and billions more to improve law enforcement, could help reverse that trend.

“Unlike past plans, this program is very serious. It was led by Finance Ministry officials who really want to do what’s best for the economy” said Ayman Odeh, chairman of the Arab parliamentary bloc, the Joint List. “I hope the political class won’t find a way to ruin what are decent intentions."

Shortly after the program was approved four months ago, Prime Minister Benjamin Netanyahu moved to attach strings to the funding, which is to be spread over five years. Conditions under consideration include better law enforcement in Arab areas, where seven people have been murdered in the past two weeks, according to the Haaretz newspaper.

Israel’s economy is forecast to expand 2.8 percent this year, compared with more than 5 percent just five years ago. Its productivity is falling behind wealthy nations’ in part due to low investment in infrastructure and human capital, especially for disadvantaged groups, the Organization for Economic Cooperation and Development said in a report this year.

“There is a consensus that if we do more to address Arab productivity, we can get growth back to rates we haven’t seen in a long time,” said Michael Sarel, a former Finance Ministry chief economist. “If we don’t do anything about this, the problem will only fester.”

Conflicted Ties

Israeli Arabs are Palestinians who remained in Israel after the Jewish state’s establishment in 1948, and their relationship with the state has been fraught. Their loyalty has been questioned because of their Arab identity and occasional involvement in attacks and espionage against Israel. Some of their leaders have fed this distrust through visits to enemy states and, recently, by paying condolence calls on the family of a Palestinian who killed Israelis. The decades-long Israeli-Palestinian conflict has also deepened the sense of alienation among some.

Israeli Arabs’ aspirations, meanwhile, have been marginalized in a country focused on its Jewish identity.

On paper, they’re citizens of equal standing: They serve in parliament, vote in Israeli elections and travel freely. But since the state’s founding they’ve suffered discrimination in employment and housing and have been denied the same level of educational, health and infrastructure services that Jewish communities enjoy. On average they earn about 70 percent of what their Jewish counterparts make, and are involved in more than 40 percent of murders and violent robberies.

“The government realizes it needs to change its approach to the Arab community if it wants to better integrate them,” said Michal Tzuk, deputy director-general at the Ministry of Economy. “We understand that getting minorities to work will not only boost the economy but address social problems.”

To remedy the community’s maladies, the government must invest more than 60 billion shekels over the next five years, Odeh estimated.

Slow Release

The promised money is being released slowly. At least 1 billion shekels are to be allocated this year, according to Finance Ministry officials. About 100 million shekels have already gone to Arab municipalities, according to Sikkuy, a not-for-profit organization promoting equality between Arabs and Jews.

An additional 200 million shekels are earmarked for extra-curricular school programs and teacher training, ministry officials said. Despite additional spending to build classrooms and add teaching hours in recent years, Israel has the largest gap in student achievement in the bloc, with Jewish students in metropolitan Tel Aviv outperforming youngsters in Arab schools, Education Ministry figures show.

“The achievements of Arab-Israeli children in education are below those of many third-world countries,” according to Dan Ben-David, president of the Shoresh Institution research center. “When children who did not receive the tools grow up, it’s no wonder that they have difficulty succeeding in a modern, competitive economy.”

Smaller special funding programs for the Arab community have withered in the past, and Arab leaders are worried that politics will trump economics this time too. Netanyahu has appointed a committee to draft conditions for some of the money, including improved law enforcement and an end to illegal construction, which Arabs blame on the government’s failure to issue enough building permits. Financing for housing and other money has been stalled by government debate over the conditions, Finance Ministry officials said.

Tira’s mayor, Mamon Abdalhai, says the government’s failure to treat his city of 25,000 like a Jewish community has hindered growth. He says no new land has been approved for construction since the 1990s, and he wants a new industrial zone to help raise taxes.

“We’ve heard of many plans before,” Abdalhai said. “Let’s see any of this money actually coming in.”

Abed Kanaaneh, co-director of equality policy at Sikkuy, is more optimistic.

“Most government decisions aren’t always implemented all the way,” he said. “But there is an understanding in Israel that if it wants to take care of itself, it has to take care of the Arabs.”

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