Israel

Israel’s Race to Economic and Moral Bankruptcy By Jonathan Cook

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.

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