It's ideology, not demography
Cuts in child allowances in recent years have decreased the Muslim population's birthrate, but the slow decline in the comparative size of the Jewish population is continuing.
In an interview to Yedioth Ahronoth on Friday, Benjamin Netanyahu explained that cuts in child allowances carried out during his tenure as finance minister had a "demographic effect of great significance," in addition to its impact on the budget. He added that "cuts in child allowances put a break on the demographic dangers. This is the first time since the establishment of the state that the gap between the Arab and Jewish birthrate is only a single child [per woman] in favor of the Arabs. Prior to the cuts we made to the child allowances, the gap stood at four children in favor of the Arabs... the demographic bomb that everyone referred to as an existential threat was simply destroyed with these cuts."
On the basis of this statement, one would think that following the 2003 cuts in allowances, a revolution in the daily (one should say nightly) lives of the Arab citizens took place. The men made their way to the pharmacies and the women to the gynecologists, and immediately (if we are to quote from Netanyahu), a "dramatic effect" occured in the birthrate. But in the style of Netanyahu, as he does occasionally, he is exaggerating.
The important piece of information in this context is the overall birthrate in the Muslim sector - the number of expected births during a woman's lifetime. Between the mid-1980s and 2000, the birthrate in the Muslim sector was stable at 4.6-4.7 children per woman. Since 2001, three years prior to the Netanyahu era in the economy, a gradual decline was evident, reaching 4.0 children per woman in 2005, compared to a stable birthrate of 2.6-2.7 children among the Jewish population.
As such, the difference between the birthrate in the Jewish and the Muslim population "prior to the cuts we made to the children allowances" was not "four in favor of the Arabs," but approximately two (including the Christians and Druze, among whom there also has been a drop in the birthrate, which means very little due to their relatively small share of the population). In 2005, the difference in the birthrate stood at 1.3-1.4 children in "favor" of the Muslim woman.
The claim that cuts in the allowances may bring about immediate change in birthrates appears to be an exaggeration even without closely looking at the data. The birthrate among the non-Jewish population dropped because of changes in habits, mainly due to the influences of norms from the Jewish sector, and also perhaps because of influences from Arab countries (in some of which the birthrates are lower than those among Muslims in Israel).
Despite the drop in the Muslim population's birthrate, the slow decline in the comparative size of the Jewish population is continuing. According to the statistical almanac, Jews constituted 76 percent of the entire population in 2005, compared to 76.2 percent the previous year. The Muslim population grew from 16.1 percent to 16.3 percent (the rest were Christians, Druze and others). On the basis of the Central Bureau of Statistics figures published in April, it is possible to estimate that Muslims will constitute 20 percent of the population by 2025 (with the overall non-Jewish population being 30 percent).
When mention was made of the "demographic bomb," to which Netanyahu referred, the reference was normally made in connection with the effects of annexing territories to Israel, with the return of refugees as part of a diplomatic solution, or for the sake of reunifying families. Inside the borders of the state of Israel, the danger of the "demographic bomb" is still far removed.
Another matter that is far more urgent is the relationship between the majority and minority - and the willingness of the minority to accept the state's basic values. In Western Europe countries there is a growing concern among the majority given the signs that the Muslim minority is unwilling to blend in the daily culture and adapt to the values of European society.
But the Muslim minorities in Britain, France, the Netherlands, and other European countries accept the existing regime and only request to preserve their unique religio-cultural identity. However, the representatives of the Muslim minority in Israel aspire to alter the character of the state, from a Jewish state to a state of all its citizens, which is essentially a binational state. This, and not the demography, is the fundamental problem.