OECD mischaracterizes Israel’s economy

January 23, 2010 Leave a comment Go to comments

By Ira Sharkansky

JERUSALEM — Israel is usually in the headlines about war, terror, great power efforts to make peace, or some other bloody or politically charged issue. This note is not about any of that exciting stuff, but deals with the way others and Israelis often view themselves. That may have something to do with having the world’s most popular publication assign us the label of Chosen People living in what the same book calls God’s Promised Land. Extremism is the language in dealing with Israel. Adversaries or our own domestic critics think it is the worst, and some friends consider it only a small measure removed from Paradise.

Recently some ranking officials of the Organization for Economic Co-operation and Development visited Israel to wrap up the country’s application for membership. The OECD is a prestigious organization, arguably of the world’s best countries, growing out of the reconstruction of Europe after World War II. Israel is expected to join within the coming months, and that will add another mark of distinction to a place thought by many to be a pariah.

What has marked the visit of OECD dignataries is their statements that Israel would be the poorest member, as well as most marked by inequality between its well-to-do and poor. The allegations have been repeated by left of center Israeli politicians, including the distinguished economist and former university president, Avishay Braverman, who is serving as a minister in the government with responsibility for minorities. Braverman appeared on a discussion program to assert that he would work to assure the entry of Israel to the OECD, and would press his colleagues in the government to allocate more resources to the underprivileged Arab sector. Joining him on the program was a prominent Arab Member of Knesset. Mohammed Barake discounted Braverman’s promises, and demanded that the OECD suspend Israel’s membership application on account of its discrimination against Arabs.

Even a minister from the right-of-center Likud signed on to the claims that Israel would be the poorest and least equal of the OECD members. Or maybe this minister was seeking to get something for his education portfolio in the discussion about membership. Gideon Sa’ar said that the OECD report was a reflection of the reality of Israel’s society. 

“Investment in human capital and higher education is the future of Israel . . .We are going to make every effort to improve teacher skills and qualifications and ease the entry and participation in education for the Arab and haredi sector.”
http://www.jpost.com/servlet/Satellite?cid=1263147943073&agename=JPost%2FJPArticle%2FShowFull

Sounds good, insofar as it comes from reputable people, but it ain’t so.

Israel would be neither the poorest nor the least egalitarian of the OECD members. Data from the World Bank indicate that on a common measure–Gross Domestic Product per capita–Israel scores wealthier than existing OECD members Portugal, the Czech Republic, South Korea, the Slovak Republic, Hungary, Poland, Turkey, and Mexico. On a common measure of income equality (Gini coefficient), it scores more egalitarian than OECD members Turkey, United States, and Mexico, and the Gini coefficients for Portugal and Japan are only fractionally in the direction of greater income equality than Israel’s.

The distinguished people who comment inaccurately on Israel’s poverty and inequality make more sense when they speak about other traits of the country. They emphasize that the ultra-Orthodox and Arab minorities are poorer than the average. That is true, but both owe some of their poverty to themselves and the politicians who represent them. The ultra-Orthodox volunteer for poverty. The men avoid work for prolonged study of religious texts. Their families live on the incomes of wives as teachers or in other low-paid occupations, and the payment of poverty-level stipends to mature yeshiva students and child allowances for their large families. These payments–and the continued abstention of ultra-Orthodox men from the workforce–reflect the importance of ultra-Orthodox parties for government coalitions.

Arab family incomes are actually closer to those of the Jewish majority than are comparable figures for minorities and majorities in the United States. That is not a great compliment for Israeli egalitarianism, insofar as the United States is a prominent outlier among wealthy countries, noted for its lack of equality. Statistics from the Central Intelligence Agency rank the United States close to the Philippines, Uganda, Jamaica, Uruguay, Cameroon, the Ivory Coast, Iran and Nigeria, and far from Western European democracies on the conventional measure of income equality.https://www.cia.gov/library/publications/the-world-factbook/rankorder/rawdata_2172.text

Israel’s Arabs might gain a larger share of the country’s opportunities if the parties that most of them vote for learned the political game of going along to get along. Instead of trading their 11 votes in the Knesset for their constituents’ benefits, the Arab parties continue to stand united in opposition to whoever is in the government. Severe criticism rather than cooperation is the name of their game. For someone who sees the trading of political support for benefits as the key of civilization, the Arabs who vote for those parties get what they deserve.

Some of you have ridiculed my claim that Israel is a normal country. You are partly right. Thanks to those who would sanctify or demonize it, Israel is different from other countries. But if you look at reputable statistics, most extreme claims pro or con prove to be false. The most prominent indicators that show it to be abnormal are that 80 percent of the population is Jewish, and that it allocates two or three times the proportion of its resources to defense compared to other western democracies. The defense indicator reflects the chronic aggression threatened by Israel’s neighbors, which makes them far less normal than Israel itself.

And if any of you object to my designation of Israel as a western democracy, go read something else.

*
Sharkansky is professor emeritus of political science at Hebrew University.

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  1. January 23, 2010 at 11:06 pm

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