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Republication, copying or redistribution by any means is expressly prohibited without the prior written permission of The Economist The Economist April 5th 2008 A special report on Israel 1 The next generation Also in this section Fenced in Short-term safety is not providing long-term security, and sometimes works against it. Page 4 To ght, perchance to die Policing the Palestinians has eroded the soul of Israel’s people’s army. Page 6 Miracles and mirages A strong economy built on weak fundamentals. Page 7 A house of many mansions Israeli Jews are becoming more disparate but also somewhat more tolerant of each other. Page 9 Israel at 60 is as prosperous and secure as it has ever been, but its Hanging on future looks increasingly uncertain, says Gideon Licheld. Can it The settlers are regrouping from their defeat resolve its problems in time? in Gaza. Page 11 HREE years ago, in a slim volume enti- abroad, for Israel to become a fully demo- Ttled Epistle to an Israeli Jewish-Zionist cratic, non-Zionist state and grant some How the other fth lives Leader, Yehezkel Dror, a veteran Israeli form of autonomy to Arab-Israelis. The Arab-Israelis are increasingly treated as the political scientist, set out two contrasting best and brightest have emigrated, leaving enemy within. Page 12 visions of how his country might look in a waning economy. Government coali- the year 2040. tions are fractious and short-lived. The dif- In the rst, it has some 50% more peo- ferent population groups are ghettoised; A systemic problem ple, is home to two-thirds of the world’s wealth gaps yawn. Israel is in conict with Many of Israel’s troubles stem from its Jewry and, as today, is four-fths Jewish it- a hostile Palestinian state that was de- political system. But can politicians x it? self. The other fth, its Arab citizens, have clared unilaterally; Islamic fundamental- Page 13 accepted the state’s Jewish identity, thanks ism in the region is on the rise; and any to eorts to end discrimination against peace deals between Israel and its neigh- The next Zionist revolution them and to the creation of a viable Pal- bourssome of which now have weapons estinian state next door. The country en- of mass destructionare looking shaky. Zionism is nearly twice as old as Israel. The joys a ourishing knowledge-based econ- Mr Dror’s future dystopia at rst sight debate about what it means continues to omy, a thriving cultural life and a just looks closer to today’s Israel. That, of shape the country. Page 15 society, and has good relations and strong course, is because he wants to catch his trade links with most of the Middle East. A readers’ attention and unsettle them. The Acknowledgments serene balance of Zionist and humanist way he associates failure with more Arabs Most of those mentioned in this report, though quoted values infuses both state aairs and every- and fewer Jews in Israel also reects the only briey, gave the author long interviews. Equally gen- day life. Reforms have stabilised the politi- audience he is aiming at (If you are in fact erous with their time were several others who are not quoted at all: Chagai Alon; Yoav Arad; Gavri Bar-Gil, secre- cal system. Fast public transport has mini- a ‘post-Zionist’then this epistle is not tary-general of the Kibbutz Movement; Gidon Bromberg, mised the country’s already small meant for you, and don’t bother to read it, co-director of Friends of the Earth Middle East; Carsten distances, encouraging mobility, and he explains in the introduction). Damsgaard, Denmark’s ambassador to Israel; Menachem Friedman of Bar-Ilan University; Adel Manna of the Van many of its citizens happily divide their Yet whether Jewish or Arab, Zionist or Leer Institute; Anshel Pfeer of Haaretz; Avia Spivak of the lives between Israel and other countries. otherwise, Israelis have good reason to Van Leer Institute; Yossi Wasserman, head of the Israel In the second scenario, Israel has only wonder what their country will look like Teachers’ Union; Stef Wertheimer, founder of ISCAR; and Ephraim Yaar of Tel Aviv University. The author is grateful half the world’s Jews, their majority in Is- in 2040or, for that matter, in 2020. Com- to all of them. rael itself is down to two-thirds and pared with much of its past, Israel’s shrinking, and Zionism has become a present is prosperous and secure. But its fu- A list of sources is at term of ridicule among the young. Jews ture is as uncertain as at any time in its 60 www.economist.com/specialreports abroad see Israel as increasingly backward years of history. and irrelevant to them, and Jews of dier- The country has emerged stronger from An audio interview with the author is at ent streams within Israel are at logger- the second Palestinian intifada, which be- www.economist.com/audiovideo heads. Pressure is rising, both at home and tween 2000 and 2004 killed 946 Israelis1 2 A special report on Israel The Economist April 5th 2008 pation and a sometimes sclerotic public An unequal struggle 1 sector. A volatile political system makes Palestinians Israelis killed by Palestinians these reforms hard to achieve. Killed by Israel: Killed by: Moreover, talks on a Palestinian state Security forces Civilians militants civilians internal look doomed to failure. If they do succeed, unknown fighting 1,200 the need to give up the West Bank will re- 1,200 1,000 ignite internal Jewish conicts, but if they don’t, fears will grow that a separation 1,000 800 800 from the Palestinians may no longer be 600 possible, forcing Israel to choose between 600 400 enshrining a form of apartheid and relin- 400 quishing its Jewish character. Arab-Israelis 200 200 are increasingly angry about being treated 0 0 as second-class citizens. 2001 02 03 04 05 06 07 2001 02 03 04 05 06 07 Many Jews from the diaspora already Source: B’Tselem view Israel as spiritually impoverished and uninviting. And when Israelis look at 2 and over 3,100 Palestinians. Israelis are the intifada but gone from strength to their neighbourhood, they see looming now much safer, though Palestinians cer- strength, fuelling impressive economic threats: a potential nuclear bomb in Iran; tainly are not, thanks to aggressive security growth. Tourism is rebounding and prop- one of the world’s most powerful guerrilla measures in the West Bank and Gaza (see erty prices have shot up. The massive in- armies in Lebanon; growing extremism chart 1). The Gaza disengagement in 2005 ux of immigrants from the former Soviet among the Palestinians; and everywhere broke a taboo on removing Israeli settle- Union is melting slowly but smoothly into the rise of popular Islamist parties that ments from the occupied territories. The Israeli society. Even some of the social con- threaten to topple reluctantly pro-Western war against Hizbullah in south Lebanon in icts of the early yearsbetween religious Arab autocrats. For the rst time since 1948, 2006 was botched, but served to shake up and secular, and between eastern and real existential threats to Israel, at least in the army. In the autumn of last year peace European Jewsseem to be settling down. its Zionist form, are on the horizon. talks with part of the Palestinian leader- On the other hand, economic growth Some of these things are out of Israel’s ship began again for the rst time in seven has widened wealth gaps rather than eas- hands, but Mr Dror reckons that what hap- years, though as this report went to press ing poverty. And growth will slow inex- pens to the country in future will depend they were looking increasingly shaky. orably unless several serious structural mostly on its own decisions. This report Meanwhile, the high-tech boom that weaknesses are xed, including a faltering will consider how well equipped it is to began in the 1990s has not only survived education system, low workforce partici- take the right ones. 7 Fenced in Short-term safety is not providing long-term security, and sometimes works against it STRIKING new construction has height Israel reoccupied the West Bank dead eight students at a Jewish seminary Asprouted on King George Street, in the towns that had been under Palestinian Au- in Jerusalem in March had Israeli resi- centre of West Jerusalem, the Jewish side thority (PA) control. Since then it has been dency, which allowed him to move freely. of the city. It is round, glass-walled from energetically killing or arresting militants. This system is born of the post-peace oor to ceiling, and set back from the road At various points some militant groups era. The collapse of the Oslo process and so as to leave plenty of room for outside ta- have observed their own ceaseres. the subsequent intifada convinced most Is- bles. It is a café. The security barrierpart fence, part raelis that it was best to shut themselves A few short years ago, only a lunatic concrete wallthat Israel began building o from the Palestinians and pull out of would have contemplated building such a around and through the West Bank con- the occupied territories unilaterally, as thing there. The second intifada, following tributes too, though less than Israel likes to they did from Gaza in 2005. If the PA could from the failure of the Oslo peace process claim. Not only is it still incomplete, but se- not deliver security, Israel would instead. of the 1990s, was raging.