Prime Minister's Office Director General Ra'anan Dinur announced at the annual Herzliya Conference on Wednesday that the government is planning to invest NIS 930 million in the Arab sector in northern Israel as part of a plan to rehabilitate the war damaged region.

Dinur said the plan would focus on three main areas - the Arab sector in the north, children and youth, and the Arab business sector.

According to Dinur, though Arabs make up 20 percent of Israel's population, their share of the gross domestic product is less than eight percent. Dinur explained that though NIS 4 billion have been earmarked for the purpose of strengthening the north, the funds have so far mainly been used to rehabilitate the region's infrastructure rather than stimulate the economy. Thus, with the intention of maximizing the financial potential of the Arab community, the government's new programs will try to guarantee the Arab sector its proportional share of the economy, Dinur explained.

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Dinur added that a private equity fund will be set up this year using government funds and private funds totaling NIS 160 million. The fund will serve the owners of small and medium businesses in the Arab sector, whose biggest obstacle so far has been obtaining capital. The fund will invest its capital in as many as 80 Arab-owned companies and businesses.

In addition to the fund, an economic development authority will be founded in order to coordinate and accompany the government's activity in the financial advancement of minorities.

Professor Ezra Sadan, formerly the director-general of the treasury, presented a trend within the Arab sector that points to the likelihood of successful incorporation of the sector into the national economy. Sadan explained that the fact that Arab women are now actively participating in the work force, the rise in the level of education and the decline in birthrate all contribute to the Arab sector's chances to succeed in increasing its share of the economy.

The two fields in which Sadan identified an Arab participation close to that of the rest of the population are medicine and the tourism industry. Today, 7.5 percent of the doctors in Israel are Arab citizens, and the percentage of Arab academics in the medical field is higher than that of Jewish academics.