Success Story and Security-Related Challenges
Only a handful of countries have made the leap from a development society to a high-tech economy as Israel has. But Israel has more than purely economic successes to show for itself.
The country ranked at an impressive 23rd place in the 2005 Human Development Index, directly after Germany. The key factor in Israel's political success story is that it has formed the only democracy in the Middle East.
Yet Israel is facing new challenges in the fields of policy and the economy. Although the country has increased its productive potential by means of a liberalisation policy, the once strong welfare state is now in a state of erosion.
The effects are unequal income distribution and biased educational opportunities. The extent to which people are affected depends strongly on their membership of ethnic and religious groups.
A study published in March 2008 by the Bank of Israel reveals that 60 percent of those inhabitants existing below the poverty line consists of two extensively closed minorities: Palestinian – usually Muslim – and ultra-orthodox Jewish Israelis.
Aside from the political and social challenges, security undoubtedly presents an even greater problem. Israel only managed to make peace with Egypt in 1979 and Jordan in 1994. The 1967 Six Day War still casts its shadow over the Middle East to the present day.
Essentially, Israel would be prepared to use the territory captured from the Arab states (with the exception of East Jerusalem) as "territorial leverage" in negotiations. However, the PLO was strictly rejected as a potential negotiation partner in the 1970s and 1980s.
Although Israel has signed a peace treaty with Egypt, it has been unable to secure peace in the Palestinian territories and the PLO has certainly not been marginalised. The breakout of the Intifada at the end of 1987 made it perfectly clear that the Palestinian population identified with the PLO's stated goal of establishing a Palestinian state.
Historical turning point: the Oslo Peace Accords
That led to a change in policy: during the Oslo peace process, Israel conceded autonomous status to the Palestinian people. However, the hopes for a peaceful end to the conflict have been dashed.
In a second uprising (the Al-Aqsa Intifada), the frustrated inhabitants of the occupied territories broke up the peace process "from below" in the year 2000. Although many of the structures drawn up in Oslo are still in place, Israel's security policy situation has gone through major changes.
Militant attacks inside the occupied territories and in the Israeli heartland increased after the outbreak of the second Intifada. Countermeasures such as the erection of the barrier in the West Bank have helped to dampen these down. However, the unilateral withdrawal from the Gaza Strip in September 2005 was less effective than it had been hoped. Israel still has no effective protection from Qassam rocket attacks.
Occupation, economy and demography
The significance of the security issues becomes clear when related to their effects on politics and the economy. The economic disadvantages of the occupation initially politicised the situation in the late 1980s.
The election of Rabin as prime minister in 1992, which enabled the Oslo process in the first place, was down to many Israelis' conviction that the settlement policy was being carried out at the cost of social welfare.
In a positive sense, this view was strengthened in the 1990s, when Israel experienced a boom in foreign investments as never before due to the successful negotiations with the PLO. Yet the outbreak of the Al-Aqsa Intifada eventually led to a major recession, which Israel only mastered by means of a drastic austerity policy.
Particularly in liberal left-wing circles, the issue of demographic policy in the occupation played a key role in the run-up to the Oslo peace process. Since then, however, the "demographic factor" has even conquered a space on the agenda of Kadima, the centre-right party led by Prime Minister Olmert since 2006.
Population movements within Israel and the occupied territories
According to the Israeli Central Bureau of Statistics (CBS), some 5.4 million Jews and 1.4 million Arabs were living in Israel at the end of 2006. At the end of 2005, the Palestinian Central Bureau of Statistics (PCBS) states, there were 4.9 million Palestinians resident in "historical Palestine" (i.e. in the Israeli heartland and the Palestinian territories occupied by Israel).
An analysis carried out by the Israeli Begin-Sadat Center for Strategic Studies (BESA), however, indicates that the Palestinian population of the occupied territories was significantly lower in 2004 – at only 2.5 rather than 3.8 million.
On the basis of the 2007 census, the PCBS insisted on its data. Whereas the BESA is still predicting a Jewish majority in historical Palestine for the year 2025, the PCBS assumes that the Palestinian population figures in Israel and the occupied territories will equal those of the Jewish population by 2010, overtaking from then on.
State of democracy
Regardless of when a Palestinian majority becomes likely in historical Palestine, the debate points to a growing problem of democratic rule since the 1967 occupation policy.
Although Israel's Palestinian citizens have entirely different political ambitions to the Palestinians in the occupied territories, both groups reject central points of Israeli policy. The inhabitants of East Jerusalem, the West Bank and the Gaza Strip condemn the occupation, and the Israeli Palestinians object to the Zionist definition of the nation, according to which Israel is a Jewish state.
That means that in Israel's current form as it has existed since 1967 (including the occupied territories), the state has little or no legitimacy among a minority of the population – which could, however, become a majority in the foreseeable future.
Security policy, the occupation and the economic difficulties thus remain indelibly linked with the state of Israel's democracy.
© Qantara.de 2008
Dr. Martin Beck is Senior Research Fellow at the Institute of Middle East Studies at GIGA, Hamburg. He also serves as a Senior Lecturer at Hamburg University. In the winter term 2007/08, he was an Acting Professor at Bremen University.
Translated from the German by Katy Derbyshire
This article is a abridged version; click here to download the complete German version of the text in PDF format.