1. 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.

2. General Demographic
Source: Central Bureau of Statistics, 2012

3. Minorities By Religion

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

5. Poverty Data
Source: Central Bureau of Statistics

6. 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

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

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

9. 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 % Arab youth in the ages of 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,

10. Ministry of Industry Trade and Labor, Arabs in Israel 2010
Workforce participation rates in Israel ages ,
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

11. 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

12. 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

13. 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

14. Governmental Policy for Economic Integration of Minorities

15. 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

16. 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

17. 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

18. 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

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

20. 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

21. 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

22. 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)

23. 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
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)

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

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

26. 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.

27. 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

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

29. THANKS!