01 March 2007

Israel's Economic Divide

The American economy isn't the only one where gross inequality and record prosperity are bedfellows. Israel's divide is arguably worse. Thomas L. Friedman, writing for the New York Times, after noting that many senior Israeli politicians are awash in crime and corruption charges that are a cause for discuss across traditional political divisions in the country, discusses the Israeli economy. Quoting Isareli economist Sever Plocker, he notes:

The economy is blooming, growing in the last quarter of 2006 by almost 8 percent. . . Foreign direct investment is flowing in at an unprecedented rate -- $13.4 billion in 2006. The high-tech sector exports are approaching $18 billion, and the stock exchange is at an all-time high. The shekel is stronger than ever, the inflation, nonexistent. Interest rates are lower than in U.S. or Britain, the budget defict less than 1 percent of GDP, and the balance of payments is positive[.]

But, Friedman also paraphrases Plocker's basis for finding that "Almost half of the population does not enjoy the boom.":

The unemployment rate is 8.3 percent. Israel's poverty rate is still the highest in the West, by far: 24.4 percent of the entire pouplation and 35.2 percent of all children are described as poor, living under the official "poverty line." In the Arab and the ultra-Orthodox Jewish sectors, child poverty is especially high:" more than 50 percent. The real income of the poorest quarter of Israelis is lower than six years ago.

The facts pose more questions than I can pretend to answer.

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