Israel’s Race to
Economic (and moral) Bankruptcy
By Jonathan Cook
June 16, 2015 "Information
Clearing House" -
Two
recent reports suggest that Israel could face catastrophic
consequences if it fails to end the mistreatment of Palestinians
under its rule, whether in the occupied territories or in Israel
itself.The Rand Corporation’s research
shows that Israel could lose $250 billion over the next decade if it
fails to make peace with the Palestinians and violence escalates.
Ending the occupation, on the other hand, could bring a dividend of
more than $120 billion to the nation’s coffers.
Meanwhile, the Israeli finance ministry predicts
an even more dismal future unless Israel reinvents itself. It is
likely to be bankrupt within a few decades, the finance ministry
report says, because of the rapid growth of two groups who are not
productive.
By 2059, half the population will be either
ultra-Orthodox Jews, who prefer prayer to work, or members of
Israel’s Palestinian minority, most of whom are failed by their
separate education system and then excluded from much of the
economy.
Both reports should be generating a tidal wave of
concern in Israel but have caused barely a ripple. The status quo –
of occupation and endemic racism – still seems preferable to most
Israelis.
The explanation requires a much deeper analysis
than either the Rand Corporation or Israel’s finance ministry
appears capable of.
The finance ministry report points out that with a
growing population not properly prepared for a modern, global
economy, the tax burden is falling increasingly heavily on a
shrinking middle class.
The fear is that this will rapidly create a
vicious cycle. Wealthier Israelis tend to have second passports.
Overwhelmed by the need to make up the revenue shortfall, they will
leave, plunging Israel into irreversible debt.
Despite this doomsday scenario, Israel seems far
from ready to undertake the urgent restructuring needed to salvage
its economy. Zionism, Israel’s official ideology, is predicated on
core principles of ethnic separation, Judaisation of territory and
Hebrew labour. It has always depended on the marginalisation at
best, exclusion at worst, of non-Jews.
Any effort to dismantle the scaffolding of a
Jewish state would create a political crisis. Reforms may happen,
but they are likely to take place too slowly and incrementally to
make much difference.
The Rand report also raises the alarm. It notes
that both peoples would benefit from peace, though the incentive is
stronger for Palestinians. Integration into the Middle East would
see average wages rise by only 5 per cent for Israelis, compared to
36 per cent for Palestinians.
But, while its economists may have found it easy
to quantify the benefits of ending the occupation, it is much harder
to assess the costs in shekels and dollars.
Over the past six decades, an economic elite has
emerged in Israel whose prestige, power and wealth depends on the
occupation. Career military officers earn large salaries and retire
in their early forties on generous pensions. Nowadays many of these
officers live in the settlements.
The army top brass are the ultimate pressure group
and will not release their grip on the occupied territories without
a fight, one they are well placed to win.
Backing them will be those in the hi-tech sector
who have become the engine of the Israeli economy. Many are former
soldiers who realised the occupied territories were the ideal
laboratory for developing and testing military hardware and
software.
Israel’s excellence in weaponry, surveillance
systems, containment strategies, biometric data collection, crowd
control, and psychological warfare are all marketable. Israeli
know-how has become indispensible to the global appetite for
“homeland security”.
That expertise was on show this month at a Tel
Aviv armaments expo that attracted thousands of security officials
from around the world, drawn by the selling point that the systems
on offer were “combat proven”.
To end the occupation would be to sacrifice all
this and revert to the status of a tiny anonymous state with no
resources or notable exports.
And finally the settlers are among the most
ideologically committed and entitled sector of Israel’s population.
Were they moved out, they would bring their group cohesion and
profound resentments back into Israel.
No Israeli leader wants to unleash a civil war
that could rip apart the already-fragile sense of unity among the
Jewish population.
The reality is that most Israelis’ perception of
their national interests, both as a Jewish state and as military
superpower, are intimately tied to a permanent occupation and the
exclusion of Israel’s Palestinian minority from true citizenship.
If there is a conclusion to be drawn from these
two reports it may be a pessimistic one.
Israel’s internal economy is likely to grow
gradually weaker, as the ultra-Orthodox and Palestinian labour
forces are under-utilised. As a result, the focus of Israel’s
economic interests and activity is likely to shift even more towards
the occupied territories.
Far from Israelis rethinking their oppressive
policies towards the Palestinians, the ideological blinkers imposed
by Zionism could push them to pursue the benefits of the occupation
even more aggressively.
If the watching world really wants peace, economic
wishful thinking will not suffice. It is past the time simply for
carrots. Sticks are needed too.
Jonathan Cook won the Martha Gellhorn
Special Prize for Journalism. His latest books are “Israel and the
Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle
East” (Pluto Press) and “Disappearing Palestine: Israel’s
Experiments in Human Despair” (Zed Books). His website is
www.jonathan-cook.net.