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Find It All In
The Jewish News
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Call 354-5959
Arabs Give Boost
To Israeli Economy
JOEL BAINERMAN
Special to The Jewish News
I
ronically, the immigra-
tion of Soviet Jews to
Israel has been the
economic catalyst Israeli
Arabs have always needed to
initiate their own economic
activities.
The influx of Russian im-
migrants has meant a greater
supply of labor in Israel and
competition for existing jobs,
especially at the lower wage
levels. As a result, many
Israeli Arabs have returned
to their villages to seek
employment alternatives.
This coincides with a trend
of local Israeli Arab en-
trepreneurialism. As an in-
creasing number of Arab local
councils in Israel realize they
might no longer be able to re-
ly on jobs for their residents
in large cities for their
economic well-being, the
economics of Arab towns are
starting to diversify.
Daniel Czamanski, a pro-
fessor in urban ecomomics at
Technion University in Haifa,
says these changes have been
in the making for the past few
years. Economists, he says,
have started to observe the
beginnings of an independent
economy in many Arab
villages as local en-
trepreneurialship starts to
take root.
"Instead of working in
small woodworking, building
materials and metalworking
factories or in Arab-owned
restaurants in the greater Tel
Aviv region, Israeli Arabs are
starting to diversity their
economic interests," Mr.
Czamanski says. "Without a
doubt, and at least from an
economic perspective, the
Arab Israeli community is
becoming more sophisticated.
"The numbers are not quite
clear yet, but one thing is
sure, they are asking more
questions about machinery
and seeking professional
business advice. More of them
are enrolling in business
classes. In the past, they were
reluctant to do these things,"
Mr. Czamanski said.
Economically, Israeli Arabs
fall short of their Jewish
counterparts. Sixty-four per-
cent live below the official
poverty line and their GNP
per capita is two-thirds that of
Israeli Jews.
In 1990, out of a total
budget for local councils of
$650 million, the Arab local
councils received only $150
million.
Twelve percent of the
Israeli population received
only 2.3 percent of the
budget. To every Arab resi-
dent, only $30 was allocated
from the development budget
of the Interior Ministry, 35
percent less than a Jewish
Israeli.
Another major problem is
the high unemployment rate
in the Israeli Arab sector —
13 percent. Forty-two percent
of all Israeli Arab academics
work in fields other than
what they were educated for.
Because of the high
unemployment problem,
many Israeli Arabs return to
their villages with medical
and engineering degrees as
they have difficulty finding
jobs in large companies
because of the security factor
(even in factories which have
no security projects). As a
result many of them become
teachers. "The Arab sector
has the best trained teachers
in Israel," Mr. Czamanski
says.
The influx of
immigrants has
meant a greater
supply of labor.
Industry, although now
starting to take off, is still far
behind the Jewish sector. In-
dustrial facilities in the Arab
sector employ only 6 percent
of the workforce compared to
20 percent in the Jewish sec-
tor. Of the 600 factories in
Arab towns, most are small
and family-owned, employing
fewer than 10 workers. One-
third of these serve as sub-
contractors for larger Israeli
companies.
This may change rapidly in
the next few years. One of the
most active areas of economic
activity in Arab towns and
cities is real estate. Part of the
reason is that there is an in-
creasing amount of capital
available to contractors. In
the past, banks demanded
land as collateral for loans,
the only asset that most
Israeli Arabs seeking capital
had but were unwilling to
part with. Today, the banks
are more flexible and Arab
builders can obtain construc-
tion and mortgage loans to
erect everything from wed-
ding halls to restaurants,
commercial centers and
motels.
Mr. Czamanski says that
while these types of projects
may not employ large
numbers of residents, they
will create the groundwork
making the transition period