Israelis protest costly housing – but not cost of settlements. Why?
Israel yesterday announced new homes in East Jerusalem to ease a housing shortage. But critics argue that the cost of building in contested territory is partially to blame for Israel's economic woes.
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"The settlements are a key issue in our economy, but ... the protesters don’t touch [settlements] because they want to be as inclusive as possible," says Hagit Ofran of Peace Now. "I believe that the settlements and the fact that the occupation goes on makes the story much worse. The government is investing with almost no limit in occupation and paying a huge price."Skip to next paragraph
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Settlement economy less productive
It is a classic guns-versus-butter debate. Veterans of the Israeli left wing have complained for years that the middle- and lower-income groups suffer most from public spending in territories claimed by the Palestinians and the absence of a peace deal.
Many Israelis make a distinction between building in the West Bank and East Jerusalem, however, seeing the latter as part of the Israeli capital and fair game for housing developments.
A portrait of the settlement economy published in July by the Organization for Economic Cooperation and Development found that it is a drag on Israel’s per capita economic production. Relative to the rest of Israel, economic activity in the settlements is more focused on public administration, construction, and house ownership. At the same time, the settler economy has less manufacturing and business services and higher unemployment than the Israeli average.
In 2007, on the 40th anniversary of the 1967 war, the centrist Israeli media outlet Ynet news reported that the total economic cost of the occupation to date had reached $50 billion – or about a quarter of Israel's annual gross domestic product. However, estimates vary widely – in part because not all costs associated with the occupation are discretely identified in government reports.
For Israeli settlers, the West Bank settlements can be a bargain. Comparable homes can be found for less than half the cost of those in Israel proper, attracting many commuters as well as more ideological settlers. Over the past 15 years, the population of West Bank settlements has nearly doubled, according to the OECD report.
Settlers: invest more in West Bank, E. Jerusalem
Settler groups and allies have argued that the government should invest more in building in the West Bank and East Jerusalem in order to bring down housing prices nationwide.
Gidi Grinstein, director of the Reut Institute in Tel Aviv, says that settlers are a well-organized minority interest group that has traditionally had far more influence on Israeli policy than the middle class.
"The settlement issue is part of a broader topic that is indeed very relevant to these protests: the middle class has never been a sector that drives politics in a sectarian manner – and this is where it is vulnerable and short-changed compared to groups who have a much narrower view and loyalty, and frontload their sectarian interests before national considerations."
The settlers are just one of a few groups that have been able to extract disproportionate gains from the political system, he says, along with tycoons, the ultra-Orthadox, labor unions, and the agricultural sector.
"If this wave of protest or unrest turns into a political power to the middle class and working class, then for sure all the sectors will have to compromise," he says.