Governmental Economical Policy towards Arab Sector

In IsraelThe Authority for Economic Development of the

Minorities Sector

Aiman Saif October 2013

General Demographic

2

Jews

Se-ries

1 75%

Arabs

21% Others 4%

Source: Central Bureau of Statistics, 2012

Muslims 83%

Christians 8.7% Druze 8.3%

Muslims

Christians

Druze

Source: Central Bureau of Statistics

Minorities By Religion

Source CBS 2011

• 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

1996-2000 2001-2005 2008

1.8 1.4 1.7

3.4

3.0

2.6

Jews Linear (Jews) ArabsLinear (Arabs)

Natural Growth Rates

Poverty Data

Source: Central Bureau of Statistics

Poverty Incidence among families by sector and number of breadwinnersArabs Orthodox Others Total

0

10

20

30

40

50

60

70

80

90

100

0 Breadwinners1 Breadwinners2 Breadwinners

Poverty Incidence and Number of Breadwinners

Data Processing: National Economic council

7 Ministry of Industry, Trade and Labor, 2011

2001 2005 2008 2010

9 1011

12

5

8

11

12

Arab MenArab women

1980 1990 2000 2010

11

1213

14

89

10

11

JewsArabs

Average study years Minorities Academics

8

Matriculation Entitlement

Ministry of Education, 2012

2007 2008 2009 2010 2011 2012

59.1

59.7

61.8

64.6 65 66.6

35.5

31.9

34.7 38 38.2 42.4

Jews Arabs

Youth - Rates do not study or work, ages 18-22

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 ,

Average years of study – ages 18-22, life status and education

15 16 17 18 19 20 21 22

8

11.616

44.841.4

31.234.4 38.7

2.83.1

6.6

24.4

13.214.2 16.8

17.8

Studying Studying & Working

Working Not Studying & Working

13.2 13.8

10.89.5

12.4 1312 11.6

ArabsJews

Workforce participation rates in Israel ages 18-66 ,1980- 2010

Ministry of Industry Trade and Labor, Arabs in Israel 201010

1980 1990 2000 2005 2009 2012

79 79

7168

72 69

11 1120 21 25 27

74 72

72 68 7378

4657

67 65 71

76

Arab men Arab Women Jewish Men Jewish women

Academics General

77

27

workforce participation rates Arab women

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

Net Impact of Demography on Employment Rates (ages 25-64)*

CBS data processed by Bank of Israel

2011 בשנת OECDממוצע

71.1

64.3

60

62

64

66

68

70

72%

*Under the assumption that Employment Rates remain constant for each age, gender & sector group

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

Governmental Policy for

Economic Integration of

Minorities

Upgrading Business

sector

Empowering municipalities

HR Development &

Approachability to high

education

Encouraging Employment

4 Areas of ActivityThe Authority for Economic Development of the Minorities Sector

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

2022012: 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 ServicesEncouraging Women

EntrepreneurshipsPromoting

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

The Economic Development 5 Year Plan(13 Towns, 780 Million NIS)

18

• Specified urban planning• Subsidy -Development of land

Planning and building

• Issuing Public Transportation• PT infrastructure developmentTransportation

• Increasing Personal SecurityHomeland security

• Physical infrastructure• Encouraging Employment

Economic Development

Implementation of The Economic Development 5 Year PlanPlanning & Building

Over 1000 units successfully marketed between 2010-2013(Nazareth, Sakhnin, Maghar & Shefaram)

700 more housing unit will be published in few months

Implementation of The Economic Development 5 Year PlanPlanning & Building

Sakhnin: The valley neigbourhood –A New Challenge

227 units successfully marketed during 2013

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 authority7600 people – local consumer power

Implementation of The Economic Development 5 Year PlanEconomic Development

Kfar Kassem – Industrial area – Lev Haaretz 600 dunams

Industrial Zones3000 Dunams in 13 townsTotal Investment within this plan: 80 Mil NISTotal Investment in all plans: 400 Mil NIS

Implementation of The Economic Development 5 Year PlanPublic 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 Micro-Finance

Koret Funds

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!