Governmental Economical Policy towards Arab Sector In Israel The Authority for Economic Development of the Minorities Sector Aiman Saif October 2013 -10:30-8:30 בבוקר: פגישת עבודה עם ה Commission on the Jewish People הועדה המקצועית של פדרציית ניו יורק שאחראית על פיתוח כלכלי בישראל. מבחינת תוכן זו פגישה מאוד ממוקדת בנושא של תעסוקה עם אנשים שמכירים בגדול את הנושא של חברה ערבית ורוצים להתייעץ במה כדאי לפדרציה להשקיע. צריך לתת הקדמה קצרה של התמונה הכללית ולהתמקד במצב הנוכחי – אילו פרוייקטים המדינה מקדמת, מה מצב ההתקדמות של התוכניות המרכזיות (תוכנית ה5 שנתית, טרכטנברג וכו), ובעיקר מה יכול להיות הערך המוסף של תמיכה פילנתרופית: איפה יש למדינה עוד אתגרים, למה צריך MATCHING וכו. בדיון יכולות בהחלט לעלות שאלות מאוד מעשיות לגבי מה יכולה/צריכה להיות ההתמקדות של הפדרציה ובאילו פרוייקטים כדאי לה לתמוך. צריך להגיע מוכנים לענות באופן ספציפי.

General Demographic Source: Central Bureau of Statistics, 2012

Minorities By Religion

Natural Growth Rates 2010: the minorities population in Israel constituted 20% (1554.7 thousands) Median age was 20 (773.8 thousands ages 0-20) 2059 Forcast: Arabs will make up 23% of the population Source CBS 2011

Poverty Data Source: Central Bureau of Statistics

Poverty Incidence among families by sector and number of breadwinners Poverty Incidence and Number of Breadwinners Poverty Incidence among families by sector and number of breadwinners Data Processing: National Economic council

Average study years Minorities Academics Ministry of Industry, Trade and Labor, 2011

Matriculation Entitlement Positive trend but still, large gaps Ministry of Education, 2012

Average years of study – ages 18-22, life status and education Youth - Rates do not study or work, ages 18-22 High rates of unemployment is due to low levels of education, difficulty in being accepted into higher education and the labor market In 2009 - 38.5% Arab youth in the ages of 18-22 did not study or work, 25.6% of the men and 52.1% of the women. 28.9% Arab women has 0-8 years of education compared with 4.5% of the Jewish women 2011 [analysis on CBS 2009 Data] ,Akeshtein and Dahan Arab Youth – status,

Ministry of Industry Trade and Labor, Arabs in Israel 2010 Workforce participation rates in Israel ages 18-66 ,1980- 2010 Jewish men: remained steady Jewish women: rose significantly Arab men: dropped by around 10 % Arab women: rose significantly (more than doubled) but still very low Still the most underemployed segment of Israeli society Recent studies indicate that the most decisive factor in enhancing employment of Arab women is higher education Ministry of Industry Trade and Labor, Arabs in Israel 2010

Lost Potential Arab citizens, despite constituting more than 20% of the population, contribute only 8% to Israel’s GDP at an estimated loss of over 30 billion NIS each year In  addition  to  low  standards  of  living and difficult conditions on  individual and community  levels, high  rates of poverty mean  high costs to the country  in state welfare services,  lost productivity,  lost tax revenue, and  low  consumer activity

Net Impact of Demography on Employment Rates (ages 25-64)* % ממוצע OECD בשנת 2011 Given demographic trends, the Israeli Bureau of Statistics warns that  if current employment rates persist, there will be a significant drop in overall employment and  in the  Israeli standard of  living—thus exacerbating socio‐economic disparities, their associated  societal costs, and jeopardizing Israel’s long‐term economic stability *Under the assumption that Employment Rates remain constant for each age, gender & sector group CBS data processed by Bank of Israel

Labor Market – Main Economic Growth Engine Israeli workforce is shrinking, according to Demographic Forecast The big Challenge: Preserving work force rates by Increasing workforce rates in under participating groups, there lies the potential. One point increase in employment rate contributes over 10 billion NIS to the GNP As  recently as May 2013,  the National Economic Council warned  the  cabinet  that  the  “Israeli  economy  cannot  thrive  without  ultra‐Orthodox  Jews  and  Israel's  Arabs  being  more  fully  integrated  into  the workforce.” However,  it assessed  that “if  the  three population groups are  indeed integrated into one productive workforce, by 2030 Israel will once more be competitive  in the world economy.” 11  

Governmental Policy for Economic Integration of Minorities

The Authority for Economic Development of the Minorities Sector 4 Areas of Activity Upgrading Business sector Empowering municipalities HR Development & Approachability to high education Encouraging Employment The Authority was established in 2007 in order to: Increasing economic development of minority communities; improving and strengthening economic engines; accelerating innovation and business communities and increasing integration of minority populations in the national economic expansion

The Governmental Designated Plans: 2010: The Economic Development Plan for Arab Towns 2011: A plan for promoting economic growth in the Bedouin sector (South) 2011: A plan for empowering Bedouin towns in the North 2011: A plan for empowering and development of the Druze and Circassian towns 202 2012: Increasing Labor Force Participation Rate and Employment rate (Trachtenberg committee) 2012: Expansion of the Economic Development plan focusing on Planning and Building (Trachtenberg committee) Over 4 Billion NIS

Trachtenberg Committee Industrial Zones Development Shuttle Services Encouraging Women Entrepreneurships Promoting employment in hi-htech proffessions Technological Education Employment Programs for Arab women High School Completion Program Increasing Demand 250 Mil NIS Increasing Supply 480 Mil NIS Significant increase in government effort to close socio-economic gaps between Arabs and Jews in Israel

The Economic Development 5 Year Plan (13 Towns, 780 Million NIS) Planning and building Specified urban planning Subsidy -Development of land Transportation Issuing Public Transportation PT infrastructure development Homeland security Increasing Personal Security Economic Development Physical infrastructure Encouraging Employment

Over 1000 units successfully marketed between 2010-2013 Implementation of The Economic Development 5 Year Plan Planning & Building Over 1000 units successfully marketed between 2010-2013 (Nazareth, Sakhnin, Maghar & Shefaram) 700 more housing unit will be published in few months

Sakhnin: The valley neigbourhood –A New Challenge Implementation of The Economic Development 5 Year Plan Planning & Building Sakhnin: The valley neigbourhood –A New Challenge 227 units successfully marketed during 2013 227 housing units have been successfully marketed during 2013 185 unit are in condominium complexes and 42 low buildings (total is 227 units) Economical contribution to Sakhnin and the area: 1,235 billion NIS – Economic activity as a result of building and developing 5-6 million NIS – property tax to the local authority 7600 people – local consumer power

Implementation of The Economic Development 5 Year Plan Industrial Zones 3000 Dunams in 13 towns Total Investment within this plan: 80 Mil NIS Total Investment in all plans: 400 Mil NIS Kfar Kassem – Industrial area – Lev Haaretz 600 dunams

Implementation of The Economic Development 5 Year Plan Public Transportation 2013: About 200,000 bus passengers daily compared to 33,000 at 2010 (580% growth)

Additional Projects 11 Career Centers Established and already functioning (Out of 21) Explanation Campaign for Proper Representation in the Public Sector Encouraging Women Entrepreneurship Employment Subsidy 4500 jobs between 2009-2012 Integration of Academics (Kav Mashve& Tsofen) Advertising Campaign - Private Sector Day Care- building and subsidy 64 Mil NIS in 2012 500 women excel program (Required Professions)

Government and Philanthropy Working Together Model 1 : 21 Employment Centers Employment Center in Tira

Government and Philanthropy Working Together Model 2 : Micro- Business Development Led by Arab women Micro Finance Loans 21 Million NIS 2000 loans 2011-2012 (16 Mil NIS) Government Koret Funds Micro- Finance

Challenges The big challenge in the mission of increasing employment is creating jobs. New creative models need to be formed in order to open new jobs for Arab job seekers especially in the Jewish business sector. Philanthropy have the flexibility to support new initiatives for creating jobs while the government can subsidize wages: A great collaboration.

conclusion The trends in socio-economical developments are positive. There are significant governmental programs, with substantial budgets, to reach goals. The role of the philanthropy is to match and leverage government funds aimed towards programs with maximum impact. And invest in creating new models by supporting NGO’s. The current target fields are Education & Employment

Encouraging High Education and Employment Career education at high school Scholarships fund Employment Centers Creative models to expand demand Suggestions for Budget Matching

THANKS!