Israeli sociologist Shlomo Swirski believes Israel is paying a very heavy economic price for its rule since the 1967 Six Day War of the region known to some as “the West Bank” and to others as “Judea and Samaria.”
Swirski is academic director of the Tel Aviv-based Adva Center. On its website, the organization describes itself as “a non-partisan policy analysis institute whose mandate is to examine Israeli society from the perspective of equality and social justice.”
The organization is planning to publish on June 6 figures supporting the claim that “the occupation” is damaging Israel’s economy.
Swirski presented to an audience of about 10 people a preview of these figures at the Marquette University Alumni Memorial Union on May 19.
The program was sponsored by the university’s Center for Peacemaking and the Midwest regional office of J Street, the recently controversial organization that describes itself as “the political home for pro-Israel, pro-peace Americans.” (See Two Views, page 5.)
According to Swirski, “The main economic price we are paying is a macroeconomic price” in terms of gross domestic product, which is defined as the monetary value of the goods and services produced in a country during a period of time.
Both of the Palestinian intifadas (uprisings) in the territories — 1987 and 2001 — resulted in declines in Israel’s GDP, Swirski said.
After the second intifada, for example, Israel endured “two years of negative GDP growth and three year of negative GDP per capita growth,” he said. “That is a huge price.”
Swirski further said that Israeli unemployment went from about six percent before the second intifada to about 12 percent after. Swirski said that the Israeli government “used the opportunity” then to “introduce major cuts” in spending on “social security, education, health care, housing — cuts we have not yet overcome.”
As a result, Israel’s poverty rate increased from around 12 percent in the 1980s to about 20 percent now, “one of the highest” among the 34 countries in the Organization for Economic Co-operation and Development, he said.
Still, Israel’s economy overall has grown by about three to four percent since 2008, Swirski said. That has led members of Israel’s political elite to believe “we can make it under any circumstances” and therefore there is “no urgency” to entering peace negotiations with the Palestinians.
But this prosperity is “very differential” in effect, Swirski said. “Some parts of the economy are growing at a fast pace,” but most are not growing “at all” and some are shrinking.
Two industries “are doing very well,” Swirski said — the high technology industry, which accounts for 50 percent of Israel’s exports and “no more than” 10 percent of Israel’s labor force; and the financial industry, which “is able to finance the high tech industry.”
However, 20 percent of Israel’s population is “below the poverty line,” Swirski said. If you include the people who “hover around the poverty line,” you have about one-third of Israel’s population, he said.
Israel also has a shrinking middle class. At the time of the first intifada in 1987, the middle class was about 33 percent of the country’s population, and now it is around 26 percent, Swirski said.
In addition to these macroeconomic costs, Israel is paying direct costs of holding the territories, Swirski contended. Exactly how much is impossible to say because much of Israel’s military budget is secret.
However, the Ministry of the Interior publishes annual figures of Israeli national government subsidies given to local political units, including those of settler communities, Swirski said.
And these figures show that the Israeli government “funding of settlements is significantly higher than the funding of regular communities within the Green Line [the armistice line after the 1948 War of Independence].”
Swirski pointed out that the territorial settlements also have the highest rate of population growth among Israeli communities.
He divided Israel statistically into four types of communities: A “Forum of 15,” which are the 15 relatively wealthy cities that don’t receive government subsidies; “development towns,” which is “a proxy to mean poor Israelis”; the Arab localities within the Green Line, and the West Bank and Golan Heights settlements (not including the parts of Jerusalem which have been annexed to the city).
Swirski said the figures show 35 percent population growth in the “Forum of 15,” 55 percent in the development towns, 97 percent in the Arab localities and 241 percent in the settlements.
Swirski said that of the estimated 360,000 settlers, about 100,000 are haredi Orthodox Jews who are not likely to pose a problem if there would be a negotiated settlement with the Palestinian Authority. But there are 70,000 to 80,000 “ideological settlers” who want Israel to keep the territories, and they are the “tail wagging the dog” of the Israeli government, Swirski said.
An audience member asked what economic benefits would result if Israel reached an agreement that allowed creation of a Palestinian Arab state in the territories.
Swirski said this would likely result in agreements with the surrounding Arab states. This would enable Israel to trade with those states, reduce Israel’s defense budget so “more can be spent on society” and boost the credit rating of Israel’s government, which will always be low as long as the conflict persists, he said.
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