Economic Development

The need to integrate Arab citizens into Israel's advanced economy and close socio-economic gaps between Arab and Jewish citizens has been rising as a national priority in recent years. Low labor participation, high rates of poverty and poor contribution to the country’s GDP make economic development of Arab citizens a key factor for Israel’s overall growth and social cohesion.

Though the Arab population comprises a little over 20% of Israel's citizenry, Arab economic output amounts to only 8% of the country’s GDP, reflecting substantial socio-economic gaps and considerable unrealized potential. While the Arab economy is ostensibly integrated into the national economy of Israel, in practical terms it is largely segregated. There are considerable differences in the level of economic development between the Jewish and Arab communities, which are reflected in statistics on income, employment, industrialization, and socio-economic status.  

In recent years, the government has established internal bodies (notably the Authority for Economic Development of the Arab, Druze and Circassian Sectors at the Prime Minister’s Office) and partnered with civil society organizations to bring numerous economic development programs to scale and invest unprecedented sums towards rapid and strategic economic development of Arab citizens.

While economic gaps between Arab and Jewish citizens are a result of various historical processes, persistent barriers to development are a result of (i) unequal government appropriation of economic resources such as land, industrial zoning, location of major anchor institutions (e.g. hospitals, universities and government offices) and public transportation (ii) under-developed professional capacities, exposure and qualifications within the population, and (iii) cultural barriers including those within Arab society and between Arab and Jewish citizens.

With these barriers in mind, government and civil society programs aim to develop industrial zones and parks; enhance access to housing, public transportation, adequate child-care options and higher education; increase employment opportunities including vocational and professional training, support for high-tech careers, job creation and equal employment policies; ensure access to government tenders and contracts; and more. Read more about employment-related efforts in the Task Force briefing paper: Arab Citizen Employment in Israel, Critical Concern and Great Potential. 

According to Prime Minister Netanyahu, who spoke at the annual Prime Minister's Conference on this issue in October 2013, "Much of our future growth will come from integrating Israeli citizens from the Arab sector in the country's economy.  It's a rocket engine for growth and that's the policy that guides us when it comes to budget appropriation."