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 Lich eld. 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 con ict 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 e orts to end discrimination against peace deals between Israel and its neigh- The next Zionist revolution them and to the creation of a viable Pal- bours some of which now have weapons estinian state next door. The country en- of mass destruction are 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 a airs and every- and fewer Jews in Israel also re ects the only brie y, 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 Pfe er 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 2040 or, 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 di er- 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 con icts, 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 years between 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 Jews seem 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 cease res. the subsequent intifada convinced most Is- bles. It is a café. The security barrier part fence, part raelis that it was best to shut themselves A few short years ago, only a lunatic concrete wall that 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. Suicide-bomb- curity checks at many of its crossings are But nearly three years after the Gaza ings had emptied the city’s restaurants and extremely lax, so as not to inconvenience disengagement, that too has proved a false brought security guards to every door. Yet the settlers who commute between their hope. The Islamists of Hamas, which of- since then the bombings have dropped to homes and Israel proper. Instead most fers a long-term cease re but not full- an average of one a year, and the most re- would-be bombers are caught or deterred edged peace with Israel, wrested Gaza cent two were in the south, far from most by over 550 checkpoints and roadblocks from the PA forces loyal to the more secu- Israelis’ consciousness. The guards are still within the West Bank itself, much of lar Fatah last June. Crude rockets are red there, but now they look bored. which is o -limits to Palestinians (see from Gaza on to neighbouring Israeli The reasons are several. At the intifada’s map, next page). The gunman who shot towns almost daily, causing few casualties1 The Economist April 5th 2008 A special report on Israel 3
2 but keeping the population terrorised. least three years and cost around $5.4 bil- backed by Israel and America, tried to de- And for the new peace process now un- lion, of which only a few hundred million stabilise the Hamas government. Israel as- der way, the system that keeps central Is- have been pledged. sassinated two centrist Hamas leaders, rael safe is proving a liability. The talks Hamas, for its part, has turned the star- Ahmed Yassin and Abdel Aziz Rantisi, dur- launched at the Annapolis summit in No- vation of Gaza to its advantage. When ing the second intifada, and led an interna- vember between Israel and Fatah’s Mah- widespread power cuts turned the world’s tional boycott of the Hamas government moud Abbas, the Palestinian president, media spotlight on to the Gazans’ plight, elected in 2006, which was headed by an- who remains in charge of the West Bank, militants blew down the border wall with other centrist, Ismail Haniyeh. As a result, are based on a simple theory. If they reach Egypt, a move they had been plotting for those now calling the shots in Gaza are an agreement to create an independent months under the nose of Israeli surveil- from the group’s hardline wing. Palestinian state in most of the occupied lance. As hundreds of thousands of des- Similarly, Israel’s attempt to destroy the territories, and if Israel allows the West perate Gazans ooded across the border to Palestinian leadership in exile by invading Bank’s economy to thrive while imposing buy supplies, Hamas’s standing across the Lebanon in 1982 fuelled support for Hiz- a near-total blockade on Gaza, then Mr Ab- Arab world swelled. Recent polls show its bullah, a Shia group that shooed the army bas will grow stronger whereas Hamas popularity among Palestinians once again out of Lebanon 18 years later and gave it a will be weakened. catching up with that of Fatah. drubbing in the summer war of 2006. And The practice is something else. Leaving Israel’s killing in 1992 of Abbas Musawi, aside the fact that collectively punishing Helping the extremists win Hizbullah’s leader, opened the job to the 1.5m Gazans in a crude attempt at electoral Hamas won parliamentary elections in charismatic Hassan Nasrallah. engineering is cynical, unethical and pro- 2006 by a landslide partly because Israel Though Hizbullah took a severe beat- hibited by international law, the very had spent years sidelining Fatah’s leader, ing in 2006, it showed that Israel was workings of Israeli security doom the plan Mr Abbas, and before him Yasser Arafat, sorely unprepared for the new kind of war to failure. Between June 2007 and mid- for their failure to crack down on militants. being waged in the Middle East, against a March 2008 at least 170 Palestinian civil- Hamas took control of Gaza after Fatah, guerrilla force supplied with the weapons ians were killed, 70 of them children, as of a conventional army. The Israeli forces, unlucky bystanders or mistaken targets of after years of dealing with Palestinian mil- what Israeli military jargon breezily calls itants, thought they were facing the same targeted elimination . All of them will sort of thing in Lebanon. The Winograd serve as martyrs to the extremists’ cause. commission, which probed the army’s So do the more than 8,000 Palestinians in performance in painstaking detail, con- Israeli jails. Some are indeed murderers, cluded that it fought most of the war as a but many are serving long sentences on series of routine anti-terrorist operations. minor or dubious charges. The UN-supervised cease re has kept the The checkpoints in the West Bank border quiet since, but has not stopped hugely increase travel times between Pal- Hizbullah from re-arming. estinian cities, turning them into virtual However, the rise of Hamas and Hiz- enclaves and sti ing the economy. Prom- bullah is also part of a trend that Israel can- ises to remove even a handful of the check- not control. Political Islamism is growing points have gone largely unful lled, partly across the Middle East, stoked by anger because local army commanders, who en- with corrupt local autocrats, resentment of joy considerable autonomy and fear get- the West, schisms within Islam and the ting the rap if a suicide-bomber slips Arab-Israeli con ict itself. George Bush’s through, err on the side of caution. war on terror , by deliberately blurring Meanwhile, the peace talks are oun- the distinction between political Islamism dering. One rightist political party, Yisrael and the nihilist jihadism of people like Beiteinu, has already left Ehud Olmert’s Osama bin Laden, adds to the enmity. governing coalition and another, the reli- This is starting to chill Israel’s already gious Shas, threatens to do so if the talks lukewarm peace with two of its neigh- broach the sharing of Jerusalem, as they bours. Egypt’s ageing president, Hosni eventually must. Israeli o cials, contra- Mubarak, now looks fearfully over his dicting what Mr Olmert signed at Annapo- shoulder at the Egyptian Muslim Brother- lis, now say that the aim is not a full peace hood, Hamas’s parent organisation. Jor- treaty, just the outline of one. dan’s King Abdullah, likewise, cannot ig- All this makes it politically hard for Mr nore the rise of the Islamists in his own Abbas’s forces to crack down on militants, mostly Palestinian population. Israel has which Israel insists on as a precondition to refused to hold peace talks with the auto- implementing any peace deal. But it is just cratic but less ideological Syrian president, as politically hard for Israeli leaders to Bashar Assad, unless he rst renounces hand over responsibility to PA forces that ties to Israel’s arch-enemies, Iran and Hiz- cannot do the job as well as the Israeli bullah. But nding a peace partner will be- army can. With foreign aid, getting the Pal- come even harder if the Muslim Brother- estinian forces up to scratch would take at hood in Syria brutally repressed by1 4 A special report on Israel The Economist April 5th 2008
Policing the Palestinians has eroded the soul of Israel’s To ght, perchance to die people’s army
HE army medical test had given N, an tween in the top ranks. Religious Zionists ians o from their land in the West Bank. T18-year-old from Jerusalem, a clean tend to be pro-settlements, and there is Moshe Hager Lau, who runs a mek- bill of health, making him eligible for a concern that the army is becoming more hina, or pre-army academy, for religious combat unit. But he did not want to ght. sympathetic to the settlers. cadets in the southern West Bank, So I went and cried to the mental health Not that it is hostile now. Military col- strongly opposes the removal of settle- o cer, told him I had some kind of pro- lusion was crucial to the establishment of ments. Not that he tells his young charges blem. When he began his military ser- many West Bank settlements that were to refuse an order to evacuate settlers: I vice recently, he landed a desk job. built without permission and made o - tell them to use their conscience. But the More and more people are nding cial only later. There are also over 100 number of young Israelis who spend a ways to evade tough duty, or duty alto- small settlement outposts , unauthor- year in a mekhina before military service gether. Medical, psychological and reli- ised but nonetheless enjoying mains wa- is growing, and their consciences are gious exemptions are on the rise. Army ter, electricity and army protection. The bound to be a ected. sources estimate that around half of army’s de ance of the law can be shock- General Stern, who came under attack those who obtain a medical certi cate to ing, as when it waited nearly a year before from fellow religious Zionists for taking avoid or cut short their service are actu- heeding an order by the Supreme Court part in the Gaza disengagement, believes ally shirkers. The statistics for the 2006 to take down a barrier that cut Palestin- such refusals will remain rare. For him the Lebanon war show that religious Zionists changes in conscription patterns carry and soldiers from kibbutzim, the crucibles other dangers: they contribute to the ato- of secular socialist Zionism, were over- We’d rather not 2 misation of Israeli society and leave him represented among the dead. Jewish men exempted from army conscription short of good soldiers. His recipe for re- It has always been these, the most % of total, by year of birth storing the people’s army includes ideological, who were the readiest to die Medically unfit Religious* Other more sparing use of exemptions, dishon- for their country. But with the ultra-Or- ourable discharges for suspected shirkers 30 thodox (who get religious exemptions) and preferential treatment at universities 25 and Arab populations swelling, and for ex-combat troops. qualms growing among the secular cen- 20 Most controversially of all, he com- tre, the institution that has traditionally 15 plained publicly that the army’s ethos of been Israel’s melting pot is slowly becom- 10 self-sacri ce had deterioriated to the ing less and less so. Major-General Elazar 5 point where it valued soldiers’ lives too 0 Stern, the army’s head of personnel and a 197980 81 82 83 84 85 86 87 88 89 highly to get the job done. He was skullcap-wearing religious Zionist him- *1979-84 self-declared religious; roundly criticised. But later the Winograd self, is a living testament to it; in the past 1985-89 studying in yeshiva. commission investigating the second Leb- people like him were few and far be- Source: Israel Defence Forces Conscription usually at age 18 anon war reached the same conclusion.
2 Assad’s father revives, destabilising the intelligence agency, argues that Hamas are capable of running it themselves. For already much weaker son. has already shown the potential to be- as long as it takes. It sounds extreme. But Farther a eld, Israelis are worried that come more moderate. There has been a as long as talking to Hamas is o the table, America’s next president will be less slav- movement in its priorities from ‘educa- anything less than a total assault will not ishly pro-Israel than George Bush. Public tion, charity and jihad now’ to ‘education, change the strategic balance. opinion in Europe has shifted against Is- charity and jihad-can-wait’, he says. Perhaps Israel can contain the Palestin- lam, which many Israelis think is to their Within the establishment, though, that ian problem inde nitely though at a terri- advantage. But like Mr Bush’s backing, a remains a minority view. And in any case, ble cost to the Palestinians, and also to its more supportive European position also thanks to Israel’s energetic e orts to keep own army that used to be the glue of Israeli risks turning Israel into more of a target. A Hamas down, there may not be any in u- society (see box). Would it be able to con- real peace deal with the Palestinians could ential moderates left to talk to. At the other tain a nuclear Iran? yet sap the Islamists’ power, but as long as end of the spectrum from Mr Ayalon, Israeli hopes that the United States it is predicated on eliminating Hamas rst, Moshe Ya’alon, a former head of the army, would lead an attack on the suspected Ira- it seems unlikely to happen. argues that the only way to deal with Ha- nian weapons facilities have dimmed. Afew senior Israelis therefore say that it mas is to send the army in to retake the Within the Israeli government, secret de- is better to talk to Hamas and even agree, Gaza Strip sector by sector, street by bates rage over whether, and when, Israel for now, to peace on its non-binding terms. street, house by house, the way it did in the should strike Iran alone. Outside it, squad- Ami Ayalon, a government minister and a West Bank during the intifada. rons of ex-spooks and retired generals former head of the Shin Bet, the domestic And then? Wait until the Palestinians hold conferences on the future of a poly-1 The Economist April 5th 2008 A special report on Israel 5
2 nuclear Middle East. Soothing voices ten years, when mutually assured destruc- risk that an Iranian bomb, even if it seems counsel that for all the in ammatory state- tion hadn’t been established yet. Besides, likely to stay in its silo, will prompt the best ments about wiping Israel o the map, he argues, that kind of deterrence will not and brightest Israelis, who are also the Iran wants a bomb for national pride and work in this region. The chain of com- most mobile, to emigrate and tip the econ- self-defence, not unprovoked aggression. mand over Iran’s nuclear programme is omy into an irreversible decline. A survey But in a country obsessed with secu- too di use, other states will want to get commissioned for the IDC’s annual Herz- rity, the hawks tend to have more sway. their own weapons, and the Middle East’s liya policy conference this year found that Shmuel Bar, a former agent of the Mossad, multiple fracture lines Sunni versus Shia, 14% of Jews in Israel (and some 40% of Ar- Israel’s foreign-intelligence service, and an Iran versus Arabs, Israel versus the rest abs there) would consider leaving the Iran expert at the Interdisciplinary Centre make for an unstable balance of forces. country if a hostile state acquired nuclear (IDC) in Herzliya, points out that the most However, the more probable threat to arms. The country’s greatest vulnerability volatile period in the cold war was the rst Israel is not that Iran will bomb it. It is the is not military but economic. 7 Miracles and mirages
A strong economy built on weak fundamentals
OR a country with so many wars, Israel slightly worn. True, the country has some Fstill has an economy with the power to How does it do it? 3 successful industrial giants and does well astonish. Having taken a beating during GDP, % change on previous year in a few export niches such as generic the intifada, GDP growth per person has drugs, weapons systems and agricultural Israel All developed countries stayed above 3% for the past four years, and water-treatment technology. Water well above the rich-country average (see 10 scarcity has already led Israel to build the chart 3), despite the costs of the 2005 Gaza 8 world’s biggest desalination plant, and pull-out and the 2006 Lebanon war. around ten more are planned. However, 6 Israel has spent years peeling back lay- much of the country’s traditional industry ers of its once-socialist economy. In 1985 4 (eg, machinery, chemicals, clothing and reforms to the central bank and nance 2 food), which accounts for more than half ministry reined in hyperin ation. In the + of its jobs, is lacklustre. Average industrial 0 1990s a heady mix of military communi- * † – productivity is around half that in Amer- cations technology, policies that encour- 2 ica. One reason: Israel leads the world in 1995 97 99 2001 0305 07 08 R&D GDP aged entrepreneurship, a wave of immi- † spending as a proportion of , but grant engineers and technicians from the Source: Israeli Finance Ministry *Estimate Forecast this is heavily concentrated in high-tech. In former Soviet Union and the then-promis- more traditional industries the rate is just a ing peace process allowed Israel to hitch its change, basic policy doesn’t. Last year Is- quarter of America’s. fortunes to the global technology boom. It rael was invited to join the Organisation Moreover, Israel’s ability to capitalise now has the most NASDAQ-listed compa- for Economic Co-operation and Develop- on the internet boom was a lucky one-o . nies after Canada and America. ment (OECD), o cial con rmation of its The big innovations of this century, argues More recently privatisations, pensions status as a developed country. Ze’ev Tadmor, of the Technion, a univer- reforms and deregulation have contrib- However, the engines of growth are pu- sity in Haifa, will be in biotech, nanotech, uted their bit. Bene ts were cut in 2003 in nier than they look. Israel excels at creating smart materials, alternative energy and favour of a welfare-to-work scheme start-ups, but is less good at turning them other things that the army’s well-funded dubbed the Wisconsin programme , after into big companies. Our main natural re- research units are not particularly inter- the American state that pioneered it. A cap- source is human capital, says Israel Ma- ested in. Much of this kind of work must ital-markets reform in 2005 reduced the kov, a former CEO of Teva, the world’s big- be done in academia, where Israel is banks’ dominance and boosted national gest generic-drugs maker, but we treat it weaker. Its seven big universities have a savings. The government has introduced just like other natural resources: we export combined government research budget of commercial budget-management sys- it at a low point in the value chain. In the around $100m, whereas America’s Massa- tems, put a 1.7% cap on budget growth and other direction, global technology giants chusetts Institute of Technology alone gets committed itself to gradual cuts in taxes, such as Intel have long been putting ad- $950m from the federal government. thus providing a cushion against Israel’s vanced production facilities like chip-wa- chronic political instability. According to fer fabrication plants in Israel, but now The power of prayer Yarom Ariav, the nance ministry’s direc- other countries are nipping at its heels. The Israel’s workforce also has its peculiarities. tor-general, this is one reason why the tech sector employs a small proportion of Overall, the proportion of the population economy rode out the shocks of the 2005 the workforce, and its workers can most in the labour market is 56%, considerably Gaza disengagement and the 2006 Leba- easily leave the country if things get sticky. lower than in America, though almost the non war so well; businesses now have And beneath its gleaming high-tech same as in the rst 15 European Union con dence that even if the leaders skin, the body of Israel’s economy is members. However, in two subgroups it is1 6 A special report on Israel The Economist April 5th 2008
2 much lower than that: haredim (ultra-Or- thodox Jews), many of whose young men spend years in the yeshiva, the religious seminary, and then nd it hard to get jobs because they have no secular training; and Arab-Israelis, whose women are less likely to seek work, and who also su er job dis- crimination. O cially, only about 40% of these two groups take part in the labour market, although the counting method is awed and the real rate may be a bit higher. Together they account for 29% of the population, and rising. Economists fear that unless more of them start work- ing, growth will be sluggish and the taxes of those who do work will have to support an ever heavier burden. Lastly, the country’s bureaucrats still Doing his bit to reduce income inequality have a lot of catching up to do. In its latest annual ranking for the ease of doing busi- an o cial with papers on his desk piled so were only recently given the right to de- ness in di erent countries, the World Bank high you can’t see him, and more on the cide on launching new study programmes. found vast disparities in Israel (see table 4): oor, he fumes. It drives me nuts. As a result, says Mr Tadmor, they cannot credit and investor protection are excel- Perhaps the most serious threat to Is- compete globally by attracting the best lent, but bureaucracy is overweening. The rael’s long-term prosperity, and the one sta to excel in particular elds. Tenured World Economic Forum’s global-competi- that most troubles ordinary Israelis, is the lecturers held their own three-month tiveness index rated Israel 17th out 131 state of the education system. Israel’s strike last autumn over a pay dispute with countries last year, but again found big spending per student is close to the OECD the nance ministry. gaps between the high quality of innova- average, yet in the OECD’s PISA rankings The unions’ powers of disruption are tion and technological readiness on the of 57 countries in 2006, which focused on another socialist legacy. Israel’s Histadrut one hand and mediocre institutions, infra- science education, Israeli 15-year-olds union federation used to run most of the structure and labour-market e ciency on came 39th overall. Israel also had the big- health-care system, the pensions system the other. gest gap between the best and the worst and the schools, as well as some of the big- Part of this is a legacy of the socialist students. Both are bad signs for a country gest rms in banking and construction. To- past. For example, 93% of Israel’s land is with few natural resources that relies on a day it is far weaker but still holds a lot of owned by the state, so everybody leases. knowledge-based economy. What they sway in the public sector. Ports, airports Part dates back to the centralised control of learn here in 9th grade is what I was doing and other essential services all su er peri- the British Mandate. Moti Sasson, the in Moscow in 7th grade, grumbles a teen- odic strikes. The government deals with mayor of Holon, a satellite city of Tel Aviv, ager who recently arrived from Russia the unions by working around them, says has spent ten years trying to pass a by-law (ranked 34th). Ozer Carmi, a professor of business ad- that would allow him to tow away illegally What is needed, said the government- ministration at the Ono Academic College. parked cars, as other cities do. He is still appointed Dovrat commission in 2004, is Israel’s public sector is a world leader in waiting for approval from the interior min- not more money but better-quality teach- employing contract workers, who have istry. You go to the ministry and you nd ing. According to a study published last au- fewer bene ts and less job security. tumn by McKinsey, a consultancy rm, that is what has made all the di erence in The Gini is out of the bottle Mixed bag 4 many other countries. The Dovrat recom- All this means that Israel’s new wealth is How businesspeople see Israel mendations included giving school princi- highly concentrated. Despite four years of 2007 pals the right to sack poor teachers and re- strong growth, the proportion of families Ranking* ward the better ones with higher pay, below the poverty line (de ned as 50% of Overall ease of doing business 29 which they currently lack. But such moves the median net income per person) has re- Starting a business 17 have been blocked by Israel’s two teachers’ mained the same, at around 20%. That of Dealing with licences 109 unions, one of which has paralysed sec- children living in poverty has actually Employing workers 87 ondary schools with a series of long grown, reaching 36% last year, because as Registering property 152 strikes over the past few years. At the end part of the bene t reforms of 2003 extra Getting credit 7 of last year it settled for a wage rise in re- payments for families with ve or more Protecting investors 5 turn for token increases in exibility, but children were abolished. Paying taxes 69 other reforms remain blocked. Israel’s Gini coe cient, a measure of in- Trading across borders 8 In higher education, teaching is in bet- come inequality, has also climbed steadily Enforcing contracts 102 ter shape, but research funding is inade- to reach one of the highest levels in the de- Closing a business 40 quate and thinly spread. Central-govern- veloped world. For years the government ment bodies have tight control over tried to contain inequality, but when Source: World Bank *Out of 178 economies salaries, hiring and ring, and universities bene ts were cut to keep a ballooning wel-1 The Economist April 5th 2008 A special report on Israel 7
2 fare budget in check, it shot up again (see It is probably too early to say whether public-sector debt (which reached over chart 5). In theory, reducing bene ts in fa- these problems are caused by delays in the 100% of GDP in 2003 and is still a hefty vour of welfare-to-work was a wise move impact of reforms or signal a longer-term 80% today). which even many civil activists supported. trend. Yaron Zelikha, a former nance- Will all this be enough? Yossi Hol- But in practice, although the Wisconsin ministry o cial who helped to draw up lander of the Israeli Institute for Economic scheme has got people into jobs, it has not the current set of policies, argues that re- Planning calculates that the country’s GDP made them better o . In the past ve years forms still in the pipeline, including pri- per person needs to grow at a bracing an- the proportion of poor families with at vatisations and infrastructure upgrades, nual rate of 4.5% for the next two decades least one wage-earner has risen by a third. should make industry more e cient and to raise it to three-quarters of the American The government professes to be very bring down supply costs to launch the next level, from less than half now, while cop- worried about poverty. It is adopting a wave of growth. ing with Israel’s changing demography. range of social measures that includes bet- In addition, says Mr Ariav, there are Over the past 20 years average growth per ter enforcement of the minimum wage, plans to turn Israel into an exporter of - person has been just 1.8%. His target is not negative taxation for the poorest and em- nancial services by harnessing its high- impossible, he says: Ireland managed over ployment schemes targeting both Arabs tech expertise to further capital-market re- 5% a year between 1986 and 2005. But he and haredim. The way to close gaps is forms; as an added bonus, this might en- calculates that Israel’s industrial invest- through the labour market, says Mr Ariav. tice some of the many Israelis who work in ment will have to rise to three times its nance abroad to come home. The govern- level over the past two decades. Encourag- Middle-class discomfort ment also wants to cut red tape by putting ing that money to ow will require far- But there is evidence that even the labour more services online and keep reducing reaching reforms. market is not delivering the goods. Yedid, a There is no shortage of plans and ideas. network of citizens’ advice bureaus across The trouble is carrying them out. Imple- Israel, was set up in 1997 to be easily A measure of inequality 5 mentation is a science in itself, and in the reached by public transport so that the Israel’s Gini coefficient current Israeli reality it’s not possible to poor could get there. Now, says Yuval El- INTIFADA BEGINS BENEFITS CUT carry out long-term, top-down reforms, bashan, Yedid’s deputy director, we have 0.55 says Shimshon Shoshani, a former direc- Before transfer payments so many people coming by car that the and direct taxes tor-general of the education ministry. Po- neighbours complain about the streets be- 0.50 litical instability, frequent sta changes, ing blocked. The reason: more and more 0.45 over-centralisation, lack of long-term middle-class people are dropping in too, planning by bureaucrats, aggressive un- 0.40 for things like legal advice and workshops After transfer payments ions and the occasional war all get in the and direct taxes on budget management. ( The poor , Mr 0.35 way. And in Israel, where wealth gaps co- Elbashan notes, don’t have budgets to incide with ethnic and social ones, econ- manage. ) According to the housing minis- 0.30 omic policy is about a lot more than mal- try, new mortgages in 2006 were 50% nourished children and bad housing. It down on 2003, a sign that the squeeze has 1979 85 90 95 2000 06 also a ects the country’s political and so- Source: Dan Ben-David, Tel Aviv University a ected much of middle Israel too. cial stability. 7 A house of many mansions
Israeli Jews are becoming more disparate but also somewhat more tolerant of each other
ARON, as we shall call him, is a secu- cost of supporting ultra-Orthodox yeshi- themselves can be heard saying the same Ylar, left-wing, Jewish resident of Tel vas and unemployed Arabs will push up about the ultra-Orthodox. For their part, Aviv in his mid-30s intelligent, cosmopol- taxes. The con ict with the Palestinians the haredim do plenty to anger their more itan, well-connected and clearly destined will grind on. Inter- and intra-ethnic con- moderate co-religionists. Last year a for- to be a member of his country’s elite. But icts will intensify. And the secular Jewish mer chief rabbi suggested that the Holo- in about ten years’ time, he says, he and his elite will trickle abroad, leaving the econ- caust was a punishment for Reform Juda- partner might well leave. By about 2025, omy in the dumps. ism, a liberal stream born in pre-Nazi Arabs and religious Jews are going to be a The divides between religious and sec- Germany. It is an old joke that Israel’s real majority, people like us will be a minor- ular date back to the foundation of the troubles will begin only after it has made ity and ten years from now is about when state, when David Ben-Gurion enlisted the peace with the Palestinians and has to start all the other people like us are going to start support of the rabbis (who were sceptical making peace among the Jews. realising it. of Zionism) by giving them authority over Yet the joke is already less fashionable He fears that the religious will gradu- life-cycle events such as marriage and than it once was. And Yaron’s vision of the ally force the rest to accept more of their re- burial. Leftists are furious when right- future is based partly on out-of-date as- strictions, such as bans on Sabbath trading wingers describe Palestinians as back- sumptions. First, the demographic balance and the sale of non-kosher food. The rising ward , dirty or fanatical , but they is not shifting all that fast. Though Arabs1 8 A special report on Israel The Economist April 5th 2008
account of religious restrictions, such as ulated mostly by Palestinians with Israeli Still a Jewish state 6 women-only software companies and residence permits, religious Jews of va- Israel’s population, % of total paralegal rms. rious kinds, aid workers and foreign jour- Jewish secular/ Non-Jews in As haredi society has been forced into nalists, and is one of the country’s poorest traditional Jewish household contact with modernity it has become municipalities. Tel Aviv types like Yaron Religious Zionist Arab-Israeli more worldly and open, while often nd- say they nd the atmosphere su ocating. Ultra-Orthodox ing ingenious ways to impose its own lim- But the separation of public spaces has 100 its. Rabbi Eichler sports a kosher mobile also calmed things down. Seas of angry, 80 phone on which internet access is dis- black-garbed haredim demonstrating 60 abled, stamped with the rabbinical coun- against cinemas and Sabbath-breaking are cil’s seal of approval. There is also a ko- a thing of the past. The annual Jerusalem 40 sher internet , which allows people to gay-pride marches have caused riots, but 20 browse only websites that have been o - last year they were already more muted. 0 cially vetted. The rabbis, says Kimi Kaplan, a sociologist 2000 2010* 2020* The rest of society is changing too, says who studies the haredim, have belatedly Source: Sergio DellaPergola *Forecast Ruth Calderon, the director of Alma, a Jew- realised that the best way to keep their ish study centre in Tel Aviv aimed at secu- young men from the temptations of homo- 2 and ultra-Orthodox Jews do indeed have lar Jews. She and Rabbi Eichler, from their sexuality is not to mention it. For their part, more children than the rest, the birth rate di erent vantage points, both detect a soft- gay activists have debated whether they even among Jews broadly de ned as sec- ening in the fervent anti-religionism of the should insist on marching in Jerusalem or ular is 2.4 children per family, as against early state. Liturgy has penetrated the relinquish the holy city and con ne them- less than 1.5 in much of western Europe. work of leading pop musicians. Bible selves to tolerant and open Tel Aviv. study has become cool among a youn- The battle of the bulge ger generation of showbusiness personal- Rejewvenation Meanwhile, birth rates among both Arabs ities and public intellectuals. Israelis who Society is fragmented in other ways too. and haredim have dropped, particularly in used to channel their spiritual energies Besides Arab-Israelis, who have always the past few years. There is much argu- into Eastern philosophies they had picked lived mostly separately, the post-Soviet ment over whether the abolition in 2003 up on their post-army backpacking trips and Ethiopian immigrants have not been of child bene ts that favoured larger fam- are now returning to the fold of Judaism. absorbed as seamlessly as earlier waves. ilies played a part in this. Studies by Sergio Finally, the growth of the ultra-Ortho- They hold on to their language and culture DellaPergola, a demographer at the He- dox seems to have made them more self- and often clump together in their own brew University in Jerusalem, and col- con dent and less militant. It has also led neighbourhoods. Russian-language radio leagues suggest that the availability of many to concentrate in segregated com- advertises visiting Russian pop stars and things like exible working hours for munities, including a couple of big new adult circumcision services. Ethiopian mothers, mortgages and child care a ect settlements in the West Bank, where their teenagers make hip-hop and African roots people’s family planning much more than conservative, tight-knit lifestyles do not music. Around 4% of Israelis are immi- do bene t payments. Whatever the rea- clash with anyone else’s. grants or their children who were given sons, although by 2020 secular Jews are True, this segregation carries costs. The citizenship because they had a Jewish rela- likely to make up only half the population, most notable is the decline of Jerusalem. tive, but who are not technically Jewish as Yaron fears, the share of the haredim The ancient city that both Israelis and Pal- themselves. These even include home- who might wish to limit his secular free- estinians claim as their capital is now pop- grown anti-Semites, alienated youth doms will still be just 8%. whom the press, with a touch of sensa- Also, haredi society is changing. Rabbi tionalism, has labelled neo-Nazis . Israel Eichler, a former member of parlia- This is not the uniform collective that ment for an ultra-Orthodox party, is keen the early Zionists dreamed of. But it is cul- to dispel what he sees as some slanderous turally richer, and there’s a certain com- myths. First, most men leave the yeshiva by fort in the fragmentation, says David Lan- about the age of 25; only in certain hard- dau, the editor of the daily Haaretz and core sects was a lifelong society of learn- himself an unusual combination of reli- ers ever considered the ideal. Secular gious and leftist. We have a mosaic of mi- youth who do army service (most haredim norities, and this gives each of them a cer- are exempt) and then go to university often tain self-con dence. take just as long to enter the workforce. These ethnic boundaries will also Second, haredi men are not unemploy- slowly blur. Already much reduced is the able; although they are barred from most gulf between Ashkenazi Jews, immigrants government jobs, supposedly because from Europe, and Mizrahim, who came their spiritual education ill prepares them from the Middle East. The elitist Europeans to work in the real world, they have had no looked down their noses at the Arab trouble reaching the top tiers of the private Jews , who watched the state’s Holocaust- sector. Israel’s richest man, Lev Leviev, is a centred identity erase their own rich cul- haredi businessman. And third, there are tural history. For years the neglect of the now many employment schemes that take Please hold, God will be with you shortly Mizrahim was one of Israel’s most burning1 The Economist April 5th 2008 A special report on Israel 9
2 social issues. Today, says Amnon Rubin- voters. It is using its weight in the current settlements, which to the haredim are less stein, a law professor and former govern- coalition to demand more bene ts for reli- important. ment minister, I have students who can’t gious Jews and to obstruct the peace talks But their gradual integration into Israeli tell me whether they are Ashkenazi or Miz- with the Palestinians. society has made some haredim more rahi because each of their grandparents is Another concern is a slow convergence nationalist. A few of the more extreme from a di erent country. of interests between the ultra-Orthodox younger settlers have adopted a sort of hy- Yet like Yaron, Mr Rubinstein still wor- and another stream of Israeli Judaism, the brid identity known as hardali (see box). If ries about the secular-religious divide. religious Zionists, who pioneered the set- in future the settlers manage to enlist Thanks both to the growing religious tlements in the occupied territories after broader support among the ultra-Ortho- population and the widening wealth gap, 1967. These two groups have traditionally dox, letting go of the occupied territories Shas, a right-wing, populist party with a had quite di erent views of the role of the will become even harder. And the longer reputation as the champion of the poor, state. The haredim want it to promote Jew- the con ict with the Palestinians stays un- has been broadening its appeal beyond its ish learning and religious observance. The solved, the more it will alienate a group of traditional base of ultra-Orthodox Mizrahi religious Zionists rely on it to support the Israelis known as the other fth . 7
The settlers are regrouping from Hanging on their defeat in Gaza
N ISRAELI independence day, when ing to align the state’s security interests Omost of the country goes picnicking, with their own plan to populate the occu- two groups of citizens have adopted a cu- pied territories. Many commentators saw rious ritual. They commemorate their their failure to stop the unilateral Gaza country’s birth by visiting places that no withdrawal as a mortal blow to their longer exist. power. But they have staged a comeback. Growing numbers of Palestinian-Is- True, militant youth of the Gaza barri- raelis have for the past decade congre- cades were disillusioned and a few re- gated at the sites of villages in Israel nounced their beliefs. A few others destroyed in the aftermath of what they moved in the opposite direction, adopt- call the nakba, or catastrophe, and what ing a hardline ideology that combines re- Jews call the war of liberation. Last year ligious Zionism’s passion for the land thousands gathered at al-Lajjun, just with the haredi disdain for the institu- north of the West Bank, where a thick tions of the state; its acronym is hardal, pine forest shelters the ruins of stone which also means mustard . But some houses whose owners and their descen- who had spent years cut o from main- dants now live a few minutes down the land Israel took their eviction from Gaza highway in Umm al-Fahm. as a divine hint and moved to Israel The other group is religious Jewish set- proper rather than to the West Bank, to try tlers. Unlike the more numerous but less to spread their ideology there. Extra-hot mustard ideological quality-of-life settlers, most Also, says Rabbi Yoel Bin-Nun, one of of whom live in large communities close the spiritual leaders of the early settler have grown up in the settlements, bub- to the Green Line (the pre-1967 border), movement, the second Lebanon war put ble-like communities of like-minded peo- they resemble the Palestinians more than all the internal con icts into perspective. ple. A threat to their homes there is a they do their fellow Jews in their near- It brought some of the settlers who had threat to their only homes, says Dror fetishistic attachment to particular bits of rejected the state back to reality. It also Etkes, a left-wing anti-settlement activist. land. They used last year’s anniversary to convinced more of the Israeli general Violent clashes between young settlers march to Homesh, one of four small public that the settlers had been right and and police marred the rst attempt after northern West Bank settlements disman- unilateral withdrawals (Israel had pulled Gaza to evacuate an unauthorised West tled at the same time as those in Gaza in its army out of southern Lebanon unilat- Bank outpost. 2005. Permission for the march had been erally six years earlier) were a mistake. At the same time, Mr Etkes notes, the denied and troops closed the roads, but The rain of rockets that has emanated Gaza pull-out and the building of the stood by as banner-waving teenagers and from Gaza since the disengagement has West Bank barrier have made main- couples with prams clambered past. only heightened that feeling. stream Israelis more aware that these ter- It was just one small example of how There will be strong resistance to such ritories will, ultimately, not be in Israel. the settlers have subverted government withdrawals in future. The founders’ gen- The settlers who resist that notion will be decisions and co-opted local army com- eration of settlers grew up in Israel an increasingly radical bunch, but also an manders over the past 40 years, contriv- proper; their children and grandchildren increasingly isolated one. 10 A special report on Israel The Economist April 5th 2008
How the other fth lives
Arab-Israelis are increasingly treated as the enemy within
HETHER you call it Shafa Amr, as the ing the borders to include them in a Pal- a wide range of Jews but not one Arab, Wresidents do, or Shfaram, its name in estinian state, in return for Israel keeping Adalah and several other Arab organisa- Hebrew, is already a political statement. some of its West Bank settlements. tions responded with a series of docu- This sleepy, hilly Arab town of 33,000 peo- All this serves to remind Palestinian-Is- ments calling for a more democratic kind ple in northern Israel was where a 19-year- raelis of the many other ways in which of state, including equal immigration old Jewish soldier, Eden Natan-Zada, they are treated as second-class citizens rights for everybody, giving minorities au- boarded a bus in August 2005 and shot for example, that their refugee relatives tonomy in certain spheres like education, dead four people before being overpow- abroad cannot return to Israel whereas giving them a veto over new laws that ered and lynched. Jews automatically qualify for citizenship, could a ect them, and including non-Jew- The town is populated by a mix of Mus- or that they nd it near-impossible to get ish elements in the state’s symbols and an- lim, Christian and Druze Arabs and has an jobs in strategic state industries such as them; in sum, making the state multicul- ancient Jewish history too. It still has a energy and water. The government has tural rather than preferentially Jewish. small and rarely used synagogue, the keys stonewalled in the face of a decision by the This caused a furious Jewish backlash. to which are entrusted to one of the Chris- Supreme Court that the Jewish National The head of the Shin Bet security agency tian neighbours. Just up the hill is a Jewish- Fund, a quasi-state body that owns 13% of described Israel’s Arab citizens as a strate- Arab peace centre, the House of Hope. Its Israel’s land, must stop its practice of leas- gic threat . Liberals, on the other hand, founder, the perpetually sunny Elias Jab- ing only to Jews. Some 70,000 Bedouin Ar- wrung their hands and called for redou- bour, is proud of the way the townspeople abs live in villages without o cial recogni- bled e orts to end discrimination against kept their calm in the aftermath of the kill- tion that lack basic services. In the private Arabs. Both groups insisted that the docu- ings and welcomed Jewish dignitaries to sector, attempts by various business lead- ments were the work of radicals and did the funerals. Ariel Sharon, the then prime ers and co-existence organisations to end not re ect Arab-Israeli opinion. minister, took the unusual step of calling job discrimination have made a di erence, Hassan Jabareen, the head of Adalah, is Mr Natan-Zada a terrorist and ensuring but change is achingly slow. a radical. He believes that a two-state sol- that the families of the dead got the state ution cannot work and that Israel and the compensation usually reserved for vic- Our state as much as yours occupied territories should become a sin- tims of Palestinian terrorism. Which is why, at the Adalah legal-advice gle state with equal rights for all, a minor- But increasingly, Palestinian-Israelis (as centre a few minutes’ drive from the House ity view even among Palestinians. But ac- distinct from the Druze, around 9% of the of Hope, sedition is brewing at least as cording to polls by Sammy Smooha, a country’s Arabs, who are traditionally Jews see it. Last year, after the Israel De- sociologist at Haifa University, the multi- closer to the state) feel that their govern- mocracy Institute, a Jerusalem think-tank, culturalist proposals for Israel itself have ment is hostile to them. Their status had issued a Constitution by Consensus widespread support among Palestinian-Is- gradually improved since the early years drafted by a group of experts that included raelis. He points out, though, that they em-1 of martial law and explicit budgetary dis- crimination against their towns, but the in- tifada has made things worse again. Thus, a law making it next to impossi- ble for West Bankers and Gazans to get Is- raeli residence or citizenship through mar- riage has made it much harder for Palestinians in Israel to marry their own kind in the occupied territories, as they used to. Earlier this year the attorney-gen- eral nally ruled out any prosecutions against police suspected of killing 13 Arabs during riots in October 2000, citing lack of evidence. Several other killings by police since then have remained unsolved. Talk of the demographic threat has led more Jews to believe in a Palestinian state, but has also made them see Arab Is- raelis as part of the threat. It has become less taboo to talk about transfer : strip- ping Palestinian-Israelis who live near the West Bank of their citizenship and redraw- We could do with a bit of multiculturalism The Economist April 5th 2008 A special report on Israel 11
2 phasise legal, non-violent methods and into Gaza to murder someone is a victory, and historical narrative is not merely to be show that Palestinian-Israelis want to real- and for me it’s terribly painful and sad. second-class citizens, or to be treated like ise their ambitions as Israeli citizens. And this cannot be bridged. immigrants in a country where they are ac- And yet it would be dangerous to un- It is ironic that the fundamental dis- tually natives. It is to be, in a way, non-per- derestimate the alienation that even the agreement between Jews and Palestinians sons. Unlike Jewish identity, a hardy less politicised among them are feeling today is not about whether there should blend of history, religion and culture that these days. Yusuf Abu Warde is one of be a Palestinian state; most Israeli Jews ac- has survived two millennia of exile, Pal- those rare Israelis who truly straddles the cepted that long ago. It is about whether estinian identity is a fragile thing, rooted cultural divide. A prominent actor, born in there should be a Jewish one. largely in the land that they, their parents 1953, he has spent most of his career play- or their grandparents lost. Ethnic national- ing Hebrew roles. Like about a fth of Pal- But this isn’t Denmark ism provides a kind of substitute. Zion- estinian-Israelis, he comes from a family To Jews the answer is obvious. There are ism threatens my existence, says Mr Abu that was evicted from its village at Israel’s over 20 Arab states but only one that is Warde. He does not mean his physical sur- founding. As a teenager he rejected the Jewish. Why, especially if the Palestinians vival, but his sense of who he is. If a Pal- Jewish state, but when the Oslo peace pro- will eventually get a state of their own, estinian state does come to pass, Israel’s cess began, I felt more Israeli than ever. should they want special recognition in Palestinians will face a grim choice: move But with the intifada and the atmo- the Jewish state too? The Jews in Den- there and lose their homes, or stay in Israel sphere that followed, he says, I realised I mark don’t insist that the Danes put the and lose themselves. would never be able to be equal, never be star of David on their national ag, sco s Their multiculturalist proposals are an able to get my land back, because the A.B. Yehoshua, one of Israel’s most emi- attempt to pre-empt that dilemma by cre- whole tendency is to present me as a po- nent novelists. ating a space for a Palestinian identity in Is- tential enemy or demographic threat Besides, the frequent claim by Israel’s rael. Even in Mr Jabareen’s vision of a com- there is some kind of improvement from critics that the nation-state is obsolete is bined binational state, Hebrew would be time to time, but not from a vision of al- clearly nonsense, as demonstrated by anti- an o cial language, Judaism an o cial re- lowing me to live here as an equal citizen, immigrant feeling and ethnic separatism ligion and the star of David an o cial sym- but rather so it won’t hurt me too much to in Europe. Kosovo’s recent secession, says bol just not the only ones. live here. He sees a younger generation Mr DellaPergola, the demographer, is a But for most Jews, the idea of a state with little belief in integration; he notices good example of a phenomenon that is that guarantees both numerical and cul- that his Jewish and Arab friends’ pages on widening, not disappearing. To Israel’s tural Jewish dominance is essential to its Facebook, a social-networking website, Jews it is an uncomfortable reminder of being a safe haven against future Holo- are almost totally segregated. He tries to why they wanted a state in the rst place. causts. It is hard to reconcile these con- empathise with his Jewish friends, but To Palestinian-Israelis, on the other cepts. But it is also hard to imagine Arab-Is- we don’t rejoice and we don’t cry about hand, to be the poorest group in a state that raelis putting up with second-class status the same things. For them, [Israel] going is Jewish in its symbols, holidays, ethos for ever. 7 A systemic problem
Many of Israel’s troubles stem from its political system. But can politicians x it?
HE new wing of the Knesset, Israel’s on a raft of other basic issues could help Is- minister without portfolio. A constitu- Tparliament, is an impressive attempt to rael leave behind old disputes and get on tion is an expression of agreements that project the authority of the state together with living. don’t exist yet. He argues that if written in with the openness of democracy. Outside It isn’t going well. Arabs are boycotting a rush, it risks either being vacuous or im- the committee rooms, brushed steel and the discussions because they reject the posing the will of majorities on minorities. blond wood grace wide, curving public starting assumption of Israel as a Jewish And once it is passed, crucial exibility foyers that look out on the gardens state, but are not numerous enough to will be lost. through a three-storey wall of oor-to-ceil- challenge it. Ultra-Orthodox Jews want Indeed, after six decades of dithering, ing glass. Here, Menahem Ben-Sasson and more power for rabbinical courts. The why the hurry? One reason is that some his colleagues on the constitution, law and Russians , as post-Soviet immigrants are feel the exibility has gone too far. The ab- justice committee are trying to weld all of known, want it to include the right to civil sence of a constitution, combined with Is- Israeli society into a seamless whole. marriage, to cater for the 300,000-odd rael’s fractious politics, left a vacuum of The idea is to write, for the rst time in non-Jews among them, which would authority that Israel’s Supreme Court, un- Israeli history, a constitution. Mr Ben-Sas- break the rabbis’ monopoly. der its activist former chief justice, Aharon son believes that setting down, in plain Moreover, not everyone agrees that the Barak, lled by interpreting certain basic Hebrew, a consensus on what sort of time is ripe. It’s no accident that we ha- laws as quasi-constitutional. country Israel is meant to be, on the ven’t had a constitution for 60 years. It’s Unusually, Israel’s Supreme Court is boundaries between religious and secular not that we forgot, remarks Ami Ayalon, also a court of rst instance for claims authority, on the status of minorities and the ex-head of the Shin Bet, now a Labour against the state. This has turned it into a1 12 A special report on Israel The Economist April 5th 2008
2 guardian of civil liberties. But it has stitute, a policy think-tank, suggests that clashed more and more with the other political volatility may even be responsi- branches of government. Rightists and re- ble for preventing Israel’s economy from ligious Jews too are critical of its secular catching up with other countries. Until and liberal views. A group that represents 1977 a coalition headed by one party had 3% of the voters sets the tone for the judi- more or less continuous control. Since cial system, complains Rabbi Eichler, the then the average government has lasted haredi ex-legislator. around two years, the average minister 18 Both its critics and its cheerleaders tend months. At about the same time Israel’s to overstate the court’s in uence. In the 13 GDP per head relative to America’s years since Mr Barak became its president, stopped climbing; it has stayed at roughly it has overturned laws as unconstitu- the same level ever since. tional only a handful of times. It has done All this has helped to spread the belief a lot for human rights in Israel, but when it that a proper constitution and a new elec- comes to Palestinians it rarely rejects the toral system could solve Israel’s woes. In state’s security arguments. And though it an attempt to speed things along, the Knes- has been openly at war with Daniel Fried- set constitution committee is also holding mann, the justice minister appointed after How long has Olmert got? separate talks on electoral reform. Mr Barak stepped down, much of the hos- They are not going well either. Several tility was the result of personal animus. There are 12 parties in the current Knesset, previous attempts have been blocked, usu- The court still enjoys the highest public and over 140 have sat in its plenum in the ally by religious parties that feared losing approval rating of any Israeli institution, past six decades, many of them one-hit the in uence of their swing vote. The one but its popularity, too, is dropping a wonders formed for bargaining purposes. reform that was passed, in 1996, proved a symptom of the general decline in public To gain a majority a coalition must typi- disaster. It aimed to increase stability by faith in the state. Politics has been beset by cally include four or ve parties, spanning separating the ballots for prime minister corruption scandals. Ehud Olmert’s term a wide ideological spectrum. Usually at and Knesset, but lots of people split their as prime minister has seen criminal least one is a religious or populist party vote, causing even more fragmentation probes into various o cials, two minis- that makes its support conditional on ex- than before. It was reversed ve years later. ters, Mr Olmert himself and the then presi- pensive budget handouts. This time the three Arab parties, who dent of the state, Moshe Katsav. Growing At its mildest, this means that ministers between them muster 11 of the 120 Knesset accountability, with unusually energetic in the same cabinet publicly squabble all seats (and are ideologically poles apart), (some say publicity-seeking) o cials in the time. More seriously, politicians are ac- want to block an increase to the threshold the comptroller-general’s and accountant- countable to their party but not their vot- for representation in parliament, because general’s o ces, have also brought more ers. Parties that are brought in to make up that would force them either to merge or dirt out into the open. the coalition numbers wield dispropor- accept that they would get no seats at all. At a deeper level, however, it is the po- tionate clout, so extremists set the agenda. So far Mr Ben-Sasson has managed to raise litical system itself that is chronically dys- Pork-barrelling is rife. And important re- the threshold of votes needed from 2% to functional. When Israel was a newborn forms are distorted by political haggling. 2.5%. Shas, the rightist religious party of country ghting for survival, it had no time At its worst, the system threatens na- the poor, is also against the change, which to devise an appropriate political model, tional security. The ability of a few tens of would give it less clout. so it went for pure proportional represen- thousands of settlers to set Israeli policy in tation, practised almost nowhere else in the occupied territories for four decades is The animals building the zoo the world. In a recent edition of Azure, a the most glaring example. A more recent Even those who favour change hotly de- liberal-right Israeli journal, Amotz Asa-El, one was the 2006 Lebanon war. When Mr bate what kind would work best. Besides a a former editor of the Jerusalem Post, Olmert became prime minister as head of presidential or semi-presidential system, summed up the results: the centrist Kadima party, he brought La- proposals include increasing the threshold bour into the coalition by appointing its to exclude all the small parties; expanding This system has been depleting Israel’s po- leader, Amir Peretz, a former trade-union the Knesset, which is not big enough to be litical energies for decades: it radicalised the territorial debate, debilitated the economy, boss, as defence minister. Mr Peretz would an e ective check on the executive; and obstructed long-term planning, derailed have preferred the nance portfolio, but electing some or all of the Knesset mem- government action, distracted cabinets, di- Mr Olmert did not want a political rival bers directly by constituency instead of by verted budgets, weakened prime ministers, holding the purse-strings, and defence was party list, to make them more answerable destabilised governments, enabled anony- the only other job senior enough for the to their voters. A simple and useful change, mous and often incompetent people to second-largest party. It was the rst time says Mr Grinstein, would be for the biggest achieve positions of great in uence and the top two posts had been lled by people elected party always to be asked to form a responsibility and blurred the distinctions with no real experience in security mat- government, rather than having to cobble between the executive and legislative ters. Four months later the war broke out. together a coalition with a majority rst. branches of government. Perhaps most cru- cially, it has led talented, accomplished, Its failures, found the Winograd commis- This would encourage parties to try to at- moral and charismatic people to abandon sion that investigated it, were in large part tract voters rather than other parties. the political arena to the mediocre, unimagi- due to the combination of an ill-prepared One of the parties’ best arguments native and uncharismatic people who cur- army and the politicians’ inexperience. against change is that a country with so rently populate it. Gidi Grinstein, the head of the Re’ut In- many distinct minorities cannot a ord to1 The Economist April 5th 2008 A special report on Israel 13
2 have a political system that disenfran- peace deal and give them up unilaterally. ians, but not talk peace just yet. Unless chises any of them. That is true, but also But when the pull-outs from Lebanon in there is a genuine breakthrough in the misleading. Mr Asa-El argues that since 2000 and from Gaza in 2005 failed to coming months, more Israelis will be in- most minority groups live clumped to- create calm, unilateralism too became dis- clined to agree. Mr Netanyahu’s main gether, electing at least some of the Knes- credited. Mr Olmert’s solution was to re- handicap is that as nance minister in set by constituency would force the main- vive the peace process, but few Israelis be- 2003 he designed the reforms that impov- stream parties to choose representatives lieved in that from the start. erished so many of them. But it’s nothing who would actually serve those groups. that a little coalition-building can’t x. Nor is it necessarily true that minority One step to the right, three steps back Paradoxically, it was right-wing gov- parties are the best representatives of mi- As a result, the public is moving right, ernments that made the big territorial nority interests. Some ultra-Orthodox rab- sparking intense competition among Shas, withdrawals, Sinai in 1982 and Gaza in bis have long argued that the haredi parties Yisrael Beiteinu (a party for Russians and 2005, because they were able to convince alienate secular Jews from the religion. If secular rightists) and the centre-right Likud right-wing voters that this was the right the Jews set up a party in Britain, says for the growing segment of Israelis who thing to do. Yet as long as the Palestinian Rabbi Eichler, the resulting anti-Semitism are angry at the Palestinians for the vio- leadership remains split between the West would catalyse all the other parties to run lence, but also at their own government Bank and Gaza, it will be impossible to against it. Moreover, the mainstream par- for an economic boom that has left them reach a deal in which Israel’s security ties ignore the haredim’s needs except to behind. Even Ehud Barak, the leader of the comes before Palestinian independence. buy coalition votes. If they got rid of the centre-left Labour Party and now the de- At some point, and perhaps quite soon, the religious parties it would improve the state fence minister, has tried to present himself political cost of being exposed to daily of both the haredi sector and of the Jewish as more hawkish than Mr Olmert to build rocket re from Gaza may outweigh that of population as a whole, he concludes. The support. Further right still, an extremist losing dozens of troops in a massive opera- problem is that the haredim have to feel camp in the Likud led by Moshe Feiglin, a tion to destroy Hamas’s power there. That, more secure before they are willing to risk prominent settler, is competing with the in turn, could be the death knell of Mah- losing their collective bargaining power. traditional religious-Zionist parties for the moud Abbas’s leadership in the West Bank There is no doubt that the current elec- voters who, in the words of Mr Etkes, the and possibly of the Palestinian Authority toral system fails accurately to represent anti-settlement activist, identify the itself. In extremis, Israel could nd itself the forces that make up Israeli society. contradictions between democracy and back in charge of the occupied territories, Changing it could be a far more e ective settlements and opt for settlements. with nobody to give the keys to, and the way of easing domestic tensions than try- With Mr Olmert’s government ap- wheel will have come full circle. ing to legislate them away via a constitu- proaching the two-year average lifespan, It may be idle to imagine that some- tion. Still, it is politicians, not their voters, the Likud has had a comfortable lead in the thing as prosaic as a new electoral system who will have to approve a change in the polls for some time. A few months ago could prevent this. The breakdown of the system. The risk is that whatever they pundits were predicting that its support Palestinian polity may have gone too far agree on will continue to serve their own would collapse come the election, because already. But if a moderate Israeli leader interests better than the country’s. most voters would still reluctantly prefer could take on the settlers without fear of If things stay roughly as they are, where to give the peace process a chance. Now the government collapsing, perhaps he is Israeli politics heading? Over the past 20 that seems less certain. These days its could start a process of gradual disconnec- years the public at large has successively leader, Binyamin Netanyahu, argues that tion from the West Bank to convince Pal- believed that Israel should hold on to the Israel needs to revive the West Bank’s estinians that most Israelis really do want occupied territories, give them up in a economy and improve life for the Palestin- to let them build a state of their own. 7 The next Zionist revolution
Zionism is nearly twice as old as Israel. The debate about what it means continues to shape the country
HERE is an ethical problem , says Mr Jews to escape the internal contradictions ideology and will probably remain so as TYehoshua, the novelist, when religion of a state run on religious lines. long as Jews are in the majority there. But it and nationality are bound up as one, as Israel’s birth, however, recreated a Jew- has always been a mishmash of evolving they are for the Jews. In biblical times, dur- ish nationalist framework based on land, and often con icting ideas rather than a ing the period of the second temple in Jeru- language, culture and everyday life. And coherent creed. The secular socialist Zion- salem, religious and nationalist interests once again it is in con ict with demands ism of the state’s founders is no longer in often clashed, most notably when reli- rooted in religious belief. To avoid repeat- vogue. To today’s haredim a Zionist state gious zealots started an unwinnable upris- ing the cycle, argues Mr Yehoshua, nation- means one that upholds Jewish law; to the ing against the Roman occupation that led alism and religion have to be discon- religious-Zionist settlers, one that returns to the destruction of the temple and the nected. He calls this separation the next the Jewish people to all of their biblical start of 2,000 years of diaspora. But dias- challenge of the Zionist revolution . lands; to the secular left, a state that is pora, suggests Mr Yehoshua, allowed the Like it or not, Zionism is Israel’s o cial democratic and liberal yet manages to1 14 A special report on Israel The Economist April 5th 2008
2 maintain a Jewish majority. Others cham- says, is in the distant future . And it cer- pion secondary goals for Zionism, like set- tainly will not happen unless Israel can ting an example in what Jews call tikkun ease its other problems: the structural olam ( world repair , ie, do-gooding). Mr weaknesses in the economy, the wealth Jabareen, the Palestinian-Israeli lawyer, ar- gaps, the social divides and, most impor- gues that the Israeli left’s current weakness tantly, the con icts with its neighbours. stems from its inability to resolve the increasingly visible contradiction be- An end and a beginning tween being a Jewish and being a demo- The rst Israeli republic has outlasted it- cratic state, whereas the right is happy to self, says Yehezkel Dror, whose two vi- resolve it in favour of being Jewish. sions of the future opened this report. But Jews outside Israel, meanwhile, are he is less sure what a new system might questioning all the traditional Zionist as- look like. Mr Dror opposes enshrining Is- sumptions about what the country should rael’s current contradictions in a constitu- mean to them. Israel as the gravitational tion; he believes that the continuing de- centre of the Jewish world? Not necessar- bate about what the country should be is ily, say the Jews of America, who are about a source of strength; it encourages creativ- equally numerous. Israel as a hothouse of ity. But, he acknowledges, in politics it Jewish spiritual and cultural life? It is more leads to a blocked society. diverse here, say Jews in America, where It is this blockage, not Palestinian mis- Orthodox rabbis lack the hegemony they It’s all right, you don’t have to stay siles or an Iranian nuclear bomb, that is the have in Israel; growing faster here, say Jews main threat to Israel’s well-being. As this in Russia, where the proselytising Luba- 20 years). It is the kind of fantasy that sets report has argued, Israel’s survival in the vitch movement has engineered a post-So- some diaspora Jews’ teeth on edge. But be- long term will depend on decisions taken viet resurrection of Jewish life; more vi- hind the scenes Mr Bielsky’s agency and in the near future, which will make the dif- brant here, say Jews in western Europe, the government are also discussing a new ference between growth and stagnation, where these days lots of non-Jews are partial aliyah . This would allow people harmony and social strife, intelligent self- studying Hebrew, Yiddish, Torah and Jew- to enjoy most of the bene ts of citizenship defence and self-destructive belligerence. ish cultural history. Israel as a Jewish safe but still spend the majority of their time To take the right decisions it needs a sys- haven? You must be joking, say Jews al- abroad, and allow Israel to reap the most tem that reduces the power of special-in- most everywhere, eyeing the rest of the from a globalised workforce. terest groups without riding roughshod Middle East. Can Zionism evolve enough to allow Is- over minorities and allows long-term As a result, traditional forms of Jewish rael’s non-Jewish citizens to feel truly part goals to override short-term politics. support for Israel are changing. Some of of the country? Mr Yehoshua envisages Can it create this system in time? Look- the wealthy foreign Jews whose names that with time, the growth of an inherently ing at today’s political quagmire, it seems adorn almost every Israeli university Israeli, post-diaspora culture could permit doubtful. Mr Dror notes that the rst few building, museum wing, hospital ward the separation of church and state. Arab-Is- decades of American history were beset and public garden now wonder if this is raelis, while maintaining their own dis- by ideological struggles as intense as those the best use for their money. American tinct culture, would then feel they be- in Israel, and that it took a civil war to be- Jews raised over $340m in emergency aid longed to Israel as much as British Jews, gin to resolve them. So he remains an opti- during the 2006 Lebanon war, but Isaac say, feel they belong to Britain. But that, he mist: Sixty years is nothing. 7 Devash, an Israeli philanthropist and en- trepreneur, argues that they need to stop O er to readers Future special reports compensating for the state’s failings and Reprints of this special report are available at a Countries and regions instead strengthen it by strengthening the price of £3.50 plus postage and packing. Vietnam April 26th society that upholds it. One of his own A minimum order of ve copies is required. EU enlargement May 31st projects, Atidim, helps bright people from Corporate o er poor areas get a good education so they Customisation options on corporate orders of 100 Business, nance, economics and ideas can go back and revitalise their home or more are available. Please contact us to discuss Telecoms: mobility April 12th towns. Sizeable Jewish donations also your requirements. International banking May 17th support Arab-Israeli advocacy groups like The future of energy June 21st Send all orders to: Mr Jabareen’s Adalah. Terrorism July 19th For its part, Israel is starting to rethink The Rights and Syndication Department what it expects of the diaspora. Ze’ev Biel- 26 Red Lion Square London WC1r 4HQ sky, the chairman of the Jewish Agency, Tel +44 (0)20 7576 8000 the main body responsible for promoting Fax +44 (0)20 7576 8492 aliyah Jewish immigration still claims to e-mail: [email protected] believe in a goal set in 2001 of attracting a Previous special reports and a list of Please visit our website million new immigrants by 2020, which forthcoming ones can be found online www.economist.com/rights would mean quadrupling the current im- for more information and to order special reports migration rate with immediate e ect (in and reprints online www.economist.com/specialreports fact, last year it reached its lowest level in