This article was translated by the ACRPS Translation and English Editing Department. The original Arabic version can be found here.
Introduction
In December, the Adva Center for Economic and Social Research[1] published a report on the social situation and the social and economic disparities in Israel during the last decade. The majority of the data in the report goes back to 2010, which saw a recovery from the global financial crisis, but the report does not cover all issues and therefore does not form a coherent picture of the whole decade. The report came out after unprecedented waves of social protest that embodied civil, political and media interest in equality and social justice. It touches on the main issues considered to be at the source of the inequality. Foremost among these issues are uneven economic growth, variable investments concentrated in a few economic sectors or geographic areas, the widening wage and income gap between different segments of the population, deepening inequality in schooling and higher education, and the widening of gaps related to health and retirement.
First, the report's data will be presented according to the classification of elements adopted in the report, and then an analysis of the data will be made.
1. Dual risks
Over the years, Israel has witnessed a degree of volatility that has added to its economic instability and made the job of its various systems more difficult. This volatility is the result of several internal and external factors, and one of the major causes is the instability in the realms of politics and security in Israel since its inception in 1948, in addition to the fact that the Israeli economy is an integral part of the global economy and is highly affected by what happens worldwide. Israeli data over different periods of time confirms the importance of the effect these factors have had on weakening the economy over different periods (see Chart 1). The report confirms this information and refers to the significant influence of the global economic crisis on Israel. The correlation between the Israeli economy and the world economy is, therefore, a risk that forces decision-makers to take steps to avoid the damage that could be done by global financial crises to the Israeli economy.
The lack of security and stability leads to a weak economy, inflicts heavy economic losses and requires a change in priorities and in the ways resources are distributed, as occurred during the two Palestinian intifadas in 1987 and 2000. This, according to the report's authors, is an additional danger that could destabilize Israel, and a direct effect of the country's relationship with the Palestinians and the Arab world. The information in Chart 1 shows clearly the impact of the dual risks on the economy: the first crisis in 2000 was a result of the impact of the bankruptcy of technology companies related to the internet (the bursting of the dot-com bubble) and the effect of the second intifada, which lasted until 2003; the second crisis in 2008 was a result of the global financial crisis. The report continues by pointing out that Israel, at the end of 2011, again faces a double danger: the financial crisis in the euro zone and the conflict with Palestinians. On this basis, the projected growth rate of the Gross Domestic Product (GDP) for 2012 was revised downward by the Central Bank and the Israeli Central Bureau of Statistics, from 3.8 percent at the beginning of 2011 to 2.4 percent at the end of the year.
To view the PDF, click on the image below.
------------------------------------
- [1] The Adva Center for Economic and Social Research research institute dedicated to monitoring social and economic trends and analyzing government policies based on these trends. The data and statistics `in this review are based on Adva's report on the socio-economic situation in Israel, released in December 2011.
