When the international situation heats up, as it is doing currently for Israel, with developments in Egypt, Syria, Lebanon, and especially Iran, there is a tendency to sweep domestic concerns under the rug, or even to imply that those who want to address them are subversive for wanting to divert the attention of the authorities from external crises. This is a mistake for many reasons, not least of which is that the political, economic and social strength and cohesion of the home front is the ultimate basis of national security. It is not for nothing that the defenders of the Spanish republic in 1938, as four columns of rebels closed in on Madrid, referred to the supporters of Franco in the city as his "fifth column", as important as the other four, if not more so.
About twenty percent of all Israeli citizens are of Arab origin. Of those, about ten percent are Druze, ten percent Christian and eighty percent Moslem. In law they have the same rights and responsibilities as all other Israeli citizens, with some exceptions, such as military service. Nevertheless, even if official discrimination does not exist, popular prejudice does, and many Arab-Israelis consider themselves as being second-class citizens. There can be no doubt whatsoever that they are much better off in Israel than they would be living in any of the surrounding Arab countries. There can be no doubt also that their position in Israeli society is gradually improving, financially, professionally and socially. The Druze are full participants and have reached high positions. The Christian Arabs, who after all have no place to go, are also making impressive progress, including a seat on the Supreme Court. The Moslem Arabs are also making progress and the younger generation is changing rapidly, but it cannot be denied that many of them (and as noted, they are the great majority), continue to feel discriminated against.
Many governmental and non-governmental programs over the years have tried to address this situation Their success has been limited, however. In the view of the writer, this because they have been addressed to either assistance programs or educational and health programs, which although important do not address the heart of the problem, which is that the Arab-Israelis by and large do not have a significant stake in the Israeli economy and thus in Israeli society.
In the contemporary world, true wealth comes from ownership of productive assets, not just a job and certainly not the ownership of consumer items. These do not empower the individual. A job, including a good one, can be lost in a minute. Consumer items, including cars and houses, cost money; they do not generate income. In many countries of the world, including the United States, Alaska, Costa Rica, Ecuador and Spain, programs have been instituted to facilitate ownership of productive assets on the part of elements of the population: in the case of the United States, Costa Rica and Spain, employees; in the case of Ecuador and Alaska, native peoples. All of these programs have been successful to varying degrees. Ten million workers in 80,000 enterprises are owners of their companies in the US, in whole or in part, including well-known companies such as Avis and United Airlines. The Alaskan native corporations have done extremely well, since the siystem was founded in 1971.
I have been involved in expanded capital ownership programs for decades, since publishing an article in The Yale Review entitled "The American Economy: Power and Paradox". I have been a director of the Center for Economic and Social Justice and was financial advisor to the indigenous peoples of Ecuador when they decided to establish their community ownership trusts. I was named by President Reagan in 1985 to a Task Force on Expanded Capital Ownership.
Which brings us back to the Arab-Israelis. Expanded capital ownership programs and structures could make a significant contribution to the integration of these people into the Israeli economy and society. In other words, they would have a stake in the success of the economy and the country; which would be a significant contribution to national security. The best structure, coverage and investment strategies to be adopted would have to be carefully studied, but community investment trusts would most likely be the best vehicle. These could cover for example, the Arab populations of a city such as Acre, or partnerships between sizeable towns such as Zichron Yaakov and Fureidis. This is not the place to discuss details, but the writer hopes that the concept will appeal to those who have the ability and therefore responsibility to fully integrate one-fifth of the population into Israeli society.
The cost would be small; the potential benefit, huge.
Norman A. Bailey, Ph.D., is Adjunct Professor of Economic Statecraft at The Institute of World Politics, Washington, DC, and a lecturer at The Israeli National Defense College (MABAL), 2011-2012 session.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2012
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