Netanyahu Puts Onus on Israeli Arabs for Economic Development

The prime minister calls for the rule of law and entrepreneurship for the community to integrate into the economy.

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Prime Minister Benjamin Netanyahu said Tuesday Israel will be relying on its Arab minority to help fuel  economic growth, but he laid a good part of the responsibility with the Arabs themselves to integrate into the economy.

"It's impossible to promise economic development without respecting the law," he told the Prime Minister's Conference for the Arab Sector held at Tel Aviv University. "That applies to preventing crime, to paying taxes and respecting building laws If we can inculcate these values, it will change the face of the country."

The prime minister said the government was doing its part by investing some NIS 5 billion in infrastructure, housing and public transportation for the Arab sector. The programs are aimed in large part at coaxing more Arab women into the labor force by making it easier for them to commute to jobs.

But Netanyahu also called on Arab entrepreneurs to seize the initiative. "What do we want from you?" he asked. "I don't believe in economic development based only on government undertakings. They are necessary but not enough. Together with personal initiative and entrepreneurship, the economy will flourish."

At the same conference, Economy Minister Naftali Bennett called on high-tech companies to avoid discriminating against young Arabs in hiring. "Let's be honest, discrimination against Arabs exists in Israel," said Bennett. "Are things harder for young Arabs than young Jews? Yes."

Bennett, the head of the right-wing Habayit Hayehudi party and a former high-tech entrepreneur, noted that only 20% of Arab students complete their studies in technology fields, but said employers were the real problem. "Only 2% of young [Arabs] who learn computer programming are employed by companies with Jewish CEOs," he said. "That's crazy."

With the technology sector facing a shortage of engineers and other skilled professionals, companies cannot ignore Israeli Arabs, who make up about 20% of Israel's population, Bennett said.

In her first public appearance since being named governor of the Bank of Israel, Karnit Flug noted that Arabs, like ultra-Orthodox Jews, suffer from low labor-force participation and salaries. While that partly reflects inferior education and training that lowers their productivity, discrimination plays a role, too, she asserted.

"There is no ignoring the phenomena of discrimination. We know that the Arab community has difficulty entering specific industries, even if they have the appropriate training," Flug said.

The exclusion of Arabs from the high-tech industry, for example, has had far-reaching effects on Israeli Arab living standards, because it is one of the most productive and highest-paying sectors in the economy, she said.

"Our ability to continue to exist as a diverse society, but also as one with social cohesion, depends in part on the development of employment among Arab society in the coming years," Flug said. "If we find a way to utilize the potential to increase growth and reduce gaps we, Jews and Arabs, can enjoy the fruits of this process. If we don't figure out how to do this, we will pay, in my estimation, a heavy economic and social price in the coming years."

In a panel discussion, Israeli business leaders weighed in. "The more we see managers in key roles from diverse sectors and backgrounds, as is happening with us, the barriers will get lower," said Intel Israel CEO Maxine Fassberg.

Super-Pharm CEO Nitzan Lavi rued the fact that there were no Arab senior managers at his chain, even though some 20% of its employees are Arab, as are 60% of its pharmacists.

Ofra Strauss, chairwoman of food maker Strauss Group, said diversity should apply to suppliers, not just employees. "It will take time for us to get the numbers and figure out from whom we're buying and how the groups are mapped out," she said.

Benjamin Netanyahu speaking at a conference on the Arab community, October 29, 2013.Credit: Morag Bitan
Naftali Bennett speaking at a conference on the Arab community, October 29, 2013. Credit: Moti Milrod