Bibi Netanyahu gave an interview to Haaretz on Wednesday where he dismissed the concerns over growing inequality in Israel – it is in the bottom three of IMF countries and bottom four of OECD members with the largest gap between rich and poor – because Israel is “in great shape” if you don’t take into account Haredim and Israeli Arabs. This statement bends the limits of credulity given that the latest IMF report on Israel specifically mentions integrating the Haredi and Arab sectors into the economy if Israel is to maintain its high growth. This summer’s upcoming social protests are also expected to focus on Haredi military exemptions and the drain on state resources through Haredi subsidies and special provisions, so dismissing the Haredim and Arabs out of hand as if they are a small and simple problem to be easily overcome is hasty at best and irresponsibly negligent at worst.
Netanyahu’s cavalier treatment of Israel’s inequality issue is also curious given the report issued by Israel’s Central Bureau of Statistics in March. The CBS forecasted that there will be an additional 350,000 Haredi Jews and an additional 300-400,000 Arabs in Israel’s population by 2019, and that by 2059 the Haredi population will equal the non-Haredi Jewish population. If this forecast is correct, then Netanyahu’s dismissing these two segments of the populace and insisting that Israel is in reality doing well on measures of inequality is dangerously off-base. Furthermore, the insistence that mainstream Israelis are not suffering from inequality is going to do him no favors politically as socially minded Israelis gear up for a repeat of last summer’s protests that rocked the country. The people that flocked to Rothschild Boulevard and erected tent cities across the country came primarily from the secular Jewish majority that Netanyahu needs to reassure, and Shaul Mofaz’s strategy of using social justice issues to bludgeon Netanyahu with is only going to ensure that Bibi’s comments are not soon forgotten. Many Israelis would take great exception to the claim that Israel is in great shape when it comes to inequality, and the CBS forecast confirms that the problem will only get worse as the Haredi and Arab populations grow relative to the rest of Israel. Netanyahu meant to reassure both domestic and international audiences that he has the problem under control, but his comments actually underscore that he believes he can ignore Israel’s economic gap and that he has no real strategy to correct what should be a pressing concern.
Ottomans and Zionists 
Mr. Koplow,
Great Blog. As a long time follower of the Middle East I can say with confidence that you will soon assume your rightful place as an internationally recognized expert on the region.
However, on this point, as well as others, I have to disagree.
Bibi was not suggesting that everything is perfect and that the Haredi/ Israeli-Arab “situation” is insignificant or that it can be easily solved. In fact, these may be THE issues facing the country. He was simply pointing out (correctly so) that as it relates specifically to inequality, these two groups tend to unfairly add inequality where it otherwise does not need to exist. Regarding the Haredim, for example, there is nothing fundamentally corrupt about Israel’s economy that contributes to their lack of wealth. They voluntarily choose to forego all available economic opportunities. This is a theological decision, which right or wrong, does not accurately reflect the economic environment in which they live.
Thanks for your comment. I agree with you that the Haredi and Arab issues are vitally important, which is why I think Netanyahu’s downplaying of them – and yes, he downplayed them – are a mistake. It doesn’t matter whether or not these two groups “unfairly” add inequality, only that inequality in those two sectors is an enormous problem. Not only has the Netanyahu government not taken any serious steps to rectify this, it has in fact done the opposite through moves like promising to find a legislative work around to the High Court declaring the Tal Law unconstitutional. That Haredim make a theological decision not to work is unfortunate and to my mind ridiculous, but that does not change the fact that they are still part of the economy and you cannot pretend that they don’t exist. It is of course not solely Netanyahu’s fault that Israel’s inequality is so high, and the Haredi problem has bedeviled every prime minister for decades. The proper response, however, is to figure out a solution rather than continuing to funnel subsidies and military exemptions to Haredim while asking the IMF and OECD to just look at Israel’s economy while leaving out Haredim and Arabs.