Israeli decision-makers are exhibiting an unusual capacity to promote policies that defy the country’s most fundamental interests. This has been the case with the spate of declarations by senior government officials denigrating the two state solution – in direct contradiction to the purported commitment of the prime minister himself to this scenario. This, too, is what is happening with the treatment of Arab citizens of Israel. On the one hand, every major authority on Israel’s economy highlights the linkage between prosperity in the years to come and the capacity to integrate Arabs into the Israeli mainstream. On the other hand, discriminatory legislation which distances Arabs from the centers of Israeli life is approved with abandon. In the process, in the name of Israeli patriotism, the country’s long-term viability is being systematically compromised.

The basic data on the discrepancies between Arabs and Jews support what Ha’aretz recently characterized as the co-existence of two states within Israel. The Jewish state is, in every respect, an advanced technological country; the Arab state is a flailing third world entity with an uncertain socioeconomic future. According to the OECD, Israel is not only high on the list of its members with rising income inequalities; it is also number one in the percentage of citizens subsisting below the poverty line. Hidden in these figures is the sad fact that fully 50% of Israel’s Arabs fall within this category.

A major new study by Professor Eran Yashiv of Tel-Aviv University and Dr. Nitza Kasir of the Bank of Israel shows in detail how, over the years, Arab citizens of Israel’s have been placed into a geographic, economic, social and cultural ghetto – to the detriment of the Israeli public at large. The participation of Arab men in the workforce barely scrapes 60%; their average income is 43% lower than their Jewish counterparts (only 22% of Arab women – mostly well-educated – work). The educational gap between Arabs and Jews is appalling: even though they constitute over 20.5% of the population, a bare 45% reach high school matriculation (as compared to 56% of Jews), and only 34% have the necessary qualifications for university admission (in contrast to 48% of Jews). It is hardly surprising that only 13% of students in institutions of higher education are Arabs – and only 4% of third degree candidates. Investments per student in Arab local authorities are fully 38% less than in their Jewish counterparts.

Arabs in Israel are heavily concentrated in a select number of areas in the country. Forty-four percent live in 14 towns, mostly in the remote periphery of the country. These do not possess basic infrastructure, have few day care centers or medical facilities, and almost 40% have no access to public transportation. Even in the civil service, only 7.8% of employees are Arabs – well below the 10% mandated by law. In effect, systemic neglect has resulted in the creation of an underclass which, according to Yariv and Kasir, has no parallel in the industrialized world.

Israel pays an exorbitant price for the perpetuation of this situation. Professor Stanley Fisher, the outgoing Governor of the Bank of Israel, pointed out repeatedly in a series of interviews that Israel’s economic growth depends heavily on the integration of Arabs into the workforce. Research by the Israel Democracy Institute and Sikkuy (which publishes annual reports on the status of Arabs in the country) echoes these recommendations. And the Yariv-Kasir report quantifies these proposals: the authors estimate that the full integration of Arab citizens of Israel into the Israeli labor force will mean the addition of over NIS 120 billion to the economy by 2050. An allocation of between NIS 6.6 and 8.3 billion to the Arab sector within the next five years – mostly in education – will yield, according to conservative predictions, an immediate return of between 3.5%-7.3% on the original investment.

Yet this government seems bent on doing exactly the opposite. This week opened with the news that the Ministerial Committee on Legislation approved a bill by the coalition whip, Yariv Levin, which would give preference to those who served in the army or in the national service in access to jobs in the state sector, to higher education, to student dormitories and to lands for residential construction. The proposed law, euphemistically entitled “The Rights of Contributors to the State,” states that “giving preference to a person who contributes to the state through preference in wages, receipt of services and the request for services will not be considered prohibited discrimination”.

A similar – and actually more moderate – law passed a preliminary reading in the previous Knesset. But it did not advance because the Attorney-General declared at the time that it might be unconstitutional and that he would difficulty in defending it in the High Court. The fact that it has been approved by the present government makes a mockery of the principle of equality so essential to Israel’s democratic order. Even more seriously, it distorts the concept of equality by making it contingent on ethnocentric and distorted measures of civic duty.

This latest manifestation of anti-democratic legislation is in line with a growing – and frankly alarming – trend of entrenching discrimination and intolerance in daily life in the country. Glaring prejudice against Arabs in opening bank accounts and in access to amusement sites like Superland are just two recent cases in point. Instead of reducing barriers to integration, it creates new obstacles which only deepen the long-standing inequities which already exist in Israeli society. As such, it is fundamentally counterproductive both to Israel’s economic well-being in the years ahead and to its moral character.

Once again, Israel’s self-styled patriots are promoting policies which fly in the face of its own viability. It is hardly a coincidence that the very same people who advocate a one-state solution in the name of Jewish hegemony are also directly involved in undermining its economic resilience. By turning their backs on the vision of a shared society, they are contributing directly to Israel’s socioeconomic regression. Facilitation and not compulsion, along with accommodation and not segregation, are the way to promote a prosperous Israel.

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