The Ma’aleh Rehavam outpost. Ofer Vaknin

Life in a Bubble in the West Bank Settlements

It's cheaper to live beyond the Green Line, when it comes to rent at least, though the incessant fighting is bad for business.



Not far from the spot where Michal Fruman was stabbed this week is the outpost of Rehavam, consisting of about 20 mobile homes randomly plunked onto a hilltop that also supports a few trees. The outpost looks like a mini-ghost town, yet then we notice a surprising sign, shaped like an arrow, with the legend: “Gandhi Café.” It leads to a trailer home porch with two empty seats. The only sign of life is barking from inside the house, but calling the phone number scribbled onto a wall quickly brings the owner, Drori Bar-Levav.

It turns out that what we see is the remains of the real business Bar-Levav once had here. In June he opened a café with a menu and waitresses that wouldn’t have shamed an establishment in Tel Aviv, with an “Israeli breakfast” for 39 shekels (about $10), quiche for 25 shekels and beer for 15. But the party was short. Ten days after he opened, the café burned down. It was a neighbors’ feud, but not with the Arabs in the nearby villages: One of his Jewish peers didn’t like his activity.

Nachman’s restaurant survives at Sde Bar, a farm just a few minutes’ drive away at the foot of the Herodium, Bar-Levav says.

“Nachman” is Nachman Gutman, 30, who’s been running a boutique cheese eatery for the last four years. We tell him we’re trying to figure out if the West Bank is a discrete economic entity, like “the state of Tel Aviv.”

“You’re asking if we’re also a sort of bubble?” he asks. “Socially, that could be. Economically, it certainly is.” There’s no culture of lounging about in cafes, he says; there aren’t a lot of people, either. “We’re more survival-oriented. The reality here requires us to be more creative economically.” This week his business was paralyzed. The stabbing attempt in the settlement of Tekoa led the army to kick the Arab workers off Nachman’s farm, lest they “get ideas” and also as a punitive measure, he says.

TheMarker: What does the restaurant base itself on, in normal times?

Gutman: “Our anchor is the Herodium,” he said referring to the nearby national park that is the site of a palace built by King Herod. “We offer a supplementary visit, for a meal and workshops.”

How does that fit with the present security situation?

“Business is good when there are no terror attacks. There aren’t a lot of security-related events around here, but when things happen in Gush Etzion, it affects the number of visitors. We are developing our manufacturing and look at tourism and the restaurant as a bonus. Generally I can say that the costs of building a business are lower beyond the Green Line, but the operating costs are the same as in the center or even higher. There are bureaucratic situations that jack up costs, events of suppliers refusing to come, so I have to go to them.”

Construction costs are rock-bottom, he says. “A Palestinian worker costs 100 to 120 shekels a day. In Holon, an ordinary worker costs 150 shekels a day and a professional costs almost 500. Every settler has a Palestinian contractor he knows and works with; often the settler himself works in construction, Hebrew labor.”

How much does it cost to buy a house here?

Gutman: “Before the construction of the ’Lieberman axis’ [a road connecting the settlement of Nokdim, where Avigdor Lieberman lives, with Jerusalem] a house would cost 300,000 shekels here. Now you won’t find one even for a million shekels.. Renting a one-room mobile home costs 1,000 shekels a month. It’s cheap here, we have quality of life, it’s near Jerusalem – the place is becoming attractive. We have a grocery and in Tekoa there’s a swimming pool.”

60% of residents work inside Israel

Discussions on the meaning of life in the occupied territories usually reach political and safety implications. But people who can ignore the Jewish-Palestinian struggle seem to find the Green Line has special social and economic significance too.

Statistics show the population of the region has a tighter set of socioeconomic characteristics than the nation as a whole. Demographically, according to Dr. Idit Solberg of Ariel University, the 370,000 Israelis living in the West Bank are more religious than Israel as a whole (only 35% define themselves as non-observant compared with 69% of all Israelis); they have more children – families average 4.58 people, versus 3.55 for the whole country. That surplus in procreation, as well as the high percentage of new immigrants, are part of the reason why this area gets higher budgets.

Economically, salaried jobs in the West Bank average 500 shekels less a month (average wage is 7,500 shekels there, versus 8,000 shekels in Israel proper – 2013 figures). But there’s less unemployment (among the Jews). Israeli West Bankers tend to be self-employed and these tend to earn more than the salaried folk.

The main reason for the wage figures is the higher percentage of observant people: 26% of these West Bank residents define themselves as ultra-Orthodox, more than three times the national rate. Also, the percentage of working women is higher in the West Bank.

The picture of life for Israelis in the West Bank becomes more complicated when factoring in the cost of living in Israel. Most of the area’s residents with whom we spoke attested that the cost of kindergarten, for instance, is a lot less than within the Green Line. Land also costs must less. On the other hand, living in the West Bank involves a lot more driving. People need cars and spend more on gasoline. Only 40% of the residents work within the West Bank and the rest gripe about their commutes.

But to really understand the cost of living beyond the Green Line, one needs to zoom in on the individual communities, because to a great degree, each exists in its own bubble.

At one end of the scale is, for example, Ma’aleh Rehavam, where municipal tax (arnona) is unknown and “yishuv tax” runs at a mere 300 shekels a month. Anybody thinking of building a business there won’t have to bother his head with many of the taxes and licensing issues a Tel Avivian would have to deal with. As long as he isn’t building a manufacturing plant that wants to export to Europe, life is easier, at least at the level of licensing.

At the other end of the rainbow are the veteran settlements like Efrat and Alon Shvut, where all the usual taxes and permits apply

Ofer Vaknin

American pie

Let’s take Efrat, a town with 8,000 people. Prices at the local supermarket aren’t cheap. Coke and soup nuts cost more than on the other side of the Green Line – but what catches the eye are American products not commonly found elsewhere, including breakfast cereals and sodas.

That is because about 13% of the Jews moving to Israel from the United States move to the West Bank. Among the Jewish immigrants in the area, 51% come from the States.

“There are brands you won’t find anywhere else. We work with special agents who only bring American stuff,” explains Eli Vanunu, supermarket employee. He admits that living in Efrat is probably more expensive than in the greater Tel Aviv area but in most families, both parents work and people live well. Efrat has the highest proportion of doctors anywhere in Israel, he claims; “There are also a lot of police and army officers.”

Nicole of Alon Shvut, originally from Toronto, sees upsides and downsides when comparing life in the West Bank with the other side. Education and housing are cheaper; but they have a long drive if they want certain things. Though, as time passes, more and more things are available locally, she adds.

We meet Nicole at the Nitzat Haduvdevan health food store at the Gush Etzion junction, which has seen not a few terror attacks in recent years. The local Rami Levy discount supermarket there is packed and the “English Cake” café seems also to be doing brisk business.

“The terror attacks haven’t stopped us,” says a sales clerk at the café, a resident of Kiryat Arba who is confident that the cost of living in Israel in her settlement is lower than anywhere else in Israel. “You can buy a great house for a million shekels in Kiryat Arba,” she says. “You can rent a four-room apartment with a garden for 1,600 shekels a month. School is subsidized and the parents’ co-payments are low. The bus to Jerusalem is subsidized. It costs me just 10 shekels.” (True: local public transport is 50% subsidized by the state.)

For all the liveliness we see now, the truth is that the terror attacks did hurt the local businesses: with every attack at the junction closes down and business stops. Some suppliers won’t come at all, adds Uzi Safdie, owner of the local Nitzat Haduvdevan store.

Some businesses were almost reduced to collapse, says Elad Farber, owner of a garage at the junction. His solution when times turn tough: to pick up the client’s car for tuning or whatever, then return it when the job’s done.

Nicole adds that after two people were killed by terrorists right by the junction, people weren’t eager to leave their homes.

The one element almost entirely missing from the business life of the Jewish residents of the West Bank – whether as customers or as sellers – are the millions of Palestinians living in the area. The situation has grown even more extreme in recent months, since the “knife intifada” began, when the locals stopped their habit of shopping in Arab villages to take advantage of lower prices of goods and services.

In normal times, economics and frugality overcome the political and social chasm between Israelis and Palestinians. Israelis buy everything from vegetables to laundry services. Today the only “place” the two sides meet is where there is no alternative to cheap Arab labor, which means the construction business.

Do you have Arab customers too?

Farber: “I can’t meet the prices they can offer in their garages, they don’t have VAT, or other taxes. They don’t need my level of professionalism. They come to us only in cases where they have a technical problem they can’t deal with. For example, in cases of new cars with a problem with the computer. I have a lot of Arab workers, but only a few customers. My employees are Arab, my customers are Jewish.”

So your manpower is cheap.

“A drop cheaper, because they receive minimum wage with pensions and everything.”

What other implications are there to running a business in the Gush?

“My clientele is pleasant and the payment ethic is high. I release the car to the customers at the end of the day, and they will come to pay me two days later, and everything is okay. On the other hand, they trust me that everything I tell them that I do, I do. The trust is high in both directions. When I speak with friends who have a business in the center of the country, I hear about a lot of problems of bounced checks and many clients who argue with you. It doesn’t happen here.”

Where do you think the differences are in the cost of living in the Gush and the Tel Aviv area?

“The cost of living here is offset between the lower cost of housing – which is not cheap at all here – to the cost of education where we are. For a child in junior high school, I pay 600 shekels a month, and for a child in high school, I pay 1,000 to 1,100 shekels a month. With the number of children we have, this offsets the housing costs in the center of the country. I pay three times what a secular resident in the center pays for education. On the other hand, we are a sort of population that spends less on clothing. We are not brands people. Until bar mitzvah age, our children don’t have cellphones.”

More private homes, lower property taxes

Ofer Vaknin

Farber’s comments may reflect a situation in which payments for schools in the special framework of the religious Zionism educational track for older children in yeshivot and ulpanot (the latter being religious high schools for girls), are much higher than non-religious parents from the center of the country encounter. But the government still shares part of the burden because it allocates more money per student for state religious education than for secular students. As TheMarker reported last October, the government spends 29,000 shekels on each student in a religious high school, about 4,400 shekels more than it spends on a student in a secular high school. The high school that received the highest budget per student in 2014 was the Mateh Binyamin yeshiva in the Beit El settlement north of Jerusalem.

Preschool education reflects this greater allocation of budgets in West Bank settlements too. The budget for preschool children in the settlements every year is 1,430 shekels higher per student on average than that for preschool children in the poorest Jewish communities in outlying areas of Israel proper. The budget per preschool student in the settlements is 13% higher than the average budget for such children in all of Israel; and 19% higher than that for children in Arab communities in Israel, whose economic situation is particularly bad. The average budget per preschool student in the settlements is 12,900 shekels a year, compared to 10,800 shekels for children in Arab preschools and 11,500 shekels in poor communities in the periphery.

This budgeting differential shows up in the number of children per class, with the percentage of people who are employed in education in the West Bank being twice the national average. At the same time, for preschool education the lower payments made by Israeli parents in the West Bank can only make other Israelis jealous.

As to government budget allocations for local authorities, once again those in the West Bank are in the lead when it comes to per-resident funding. These amounts are not for covering higher security costs or paving new roads, which come out of the budgets of the Defense Ministry, National Roads Company and the Transportation Ministry; but are partly the result of the large numbers of children in the district and the large number of immigrants living there. But a portion of these funds do go to provide a higher level of services for residents in the region.

Solberg explains this higher funding as the result of the demographic and regional characteristics, for example the large number of children per family, the low socioeconomic level of a large part of the population, and the large distances between the communities that make services for residents much more expensive, such as transportation to school in buses designed to protect the students from bullets and terrorist attacks. But Solberg says the need for this funding is a result of the shortage of property taxes paid to local authorities in the region because of a small number of businesses that pay commercial property taxes.

Still, much of this funding ends up in the form of a higher level of services provided to residents of the region, and in some cases this funding more than makes up for the lower property taxes paid by residents of similar communities on the other side of the Green Line; especially if we make the comparison according to the tax rate per square meter – because a much larger percentage of the Jewish population in the West Bank lives in private homes in semi-rural communities than in the rest of Israel.

The low socioeconomic level of the ultra-Orthodox population in the region is another factor that makes the inequality among the Jewish population of the West Bank higher than in similar communities inside Israel, says Solberg.

Forget about a “shopping experience”

A very low cost of living can be found in the ultra-Orthodox settlement of Betar Illit. The settlement is located south of Jerusalem and has 50,000 residents. “If I pay 1,800 shekels a month for daycare for my daughter, in Betar Illit such daycare costs 800 to 900 shekels. I thought of signing up my daughter there,” said Safdie.

Business owners in Betar Illit say the security situation has not only not hurt them, it has even raised revenues a bit. “Sales rose by 1% to 2% because people are afraid to travel to shop in Jerusalem,” said Yosef Ben Porat, who owns two stores in Betar Illit.

Is there economic significance in your business being over the Green Line?

Ben Porat: “If my two stores were in Jerusalem, I would have three times the revenues. Many people tell me ‘it’s shame your store isn’t in Jerusalem,’ and tell me our prices are much lower than in Jerusalem. I have a lot of friends who are afraid to come near the area and do not come even to visit. Whoever doesn’t know the area is afraid to wander around here, and that’s even though the prices here are much lower than any place else. There are sales agents who come to me at the end of the day to do their shopping here. Because of the fierce competition here, everyone is willing to work on a profit of agorot.”

“This is a city in which the people think twice about every product they buy, because these are families blessed with many children with large expenses, every product they take is carefully considered,” say Haim and Henya Weingarten from the Bazaar Strauss children’s goods store in the center of the city. “People here come with a precise list of what they need. It is not a place where they worry about the ‘shopping experience.’”

Is there is a difference between the shopping habits in Betar Illit and those in Beit Shemesh, which is on the other side of the Green Line?

“It’s not a matter of the Green Line, but the economic situation in Beit Shemesh is better. The population here wants cheaper things,” say the Weingartens. “They are a lot of big families with a financial situation that isn’t comfortable. Here people buy more necessities, but we try to offer prices as low as possible so they can buy as much as possible. God bless, we have a very lot of competition.”

Despite the difficult security situation, the lower salaries and the high cost of living that has spread beyond the Green Line too, studies on the satisfaction and happiness of the Jewish population in the West Bank show higher levels than national averages. The surveys show fewer people here suffer from loneliness, and more believe that their economic situation will improve. The health of residents, based on self-reporting, is the best of any district in Israel; the percentage of those suffering from stress of various types and sleep disturbances is lower than in any other district; and the same goes for suicidal feelings.

Maybe it is because of the education budgets, maybe it is because they are younger, maybe because of the larger families. And maybe it is just because they, to a greater extent than their counterparts across the Green Line, believe.

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