Why The Economist writes down Israel

By Alex Brummer, April 11, 2008

The weekly magazine runs a pessimistic report on the Jewish state to mark its 60th anniversary

The media likes anniversaries. They are fixed points in a fast moving news agenda which allow stocktaking. As we move towards May and Israel’s 60th birthday, Israel is certain to come into focus. The Economist was fast off the mark in last week’s issue with a densely written 16-page report, The next generation, which examines dilemmas facing the Jewish state.

As one might expect, the Economist it is scrupulously neutral so even accounts of the country’s economic success are accompanied by caveats. It seeks to take a look at the wider Israel from its high-tech, to societal developments and political reform, rather than focusing entirely on diplomatic dilemmas.

The tone of the report is set by the first report from Gideon Lichfield, the magazine’s Jerusalem correspondent. He sets out two scenarios for Israel in the year 2040 as seen by political scientist Yechezel Dror. The first benign view sees an Israel which has 50 per cent more people and two-thirds of the world’s Jews, keeping the state four-fifths Jewish. The other one-fifth are Arabs who fully accept the state’s Jewish identity after discrimination has ended and a viable Palestinian state has been created.

The second outcome is an Israel which is a fully democratic, non-Zionist state, granting some form of autonomy to Arab Israelis in which the best and the brightest Jews have left, leaving behind a fractious state in perpetual conflict with hostile Palestinians. Lichfield suggests that Israel in 2008 is closer to the latter “dystopia” than the former ideal.

This bifurcated view of the Jewish state pervades the special report. On security the Economist believes that the “fence” and associated security measures have made Israel a much safer place. But it comes at a cost of increasing the “travel times between Palestinian cities”, turning them into “virtual enclaves and stifling the economy”.

Israel likes to think its own economy is a showpiece for the region with its 3 per cent growth rate, membership of the Paris-based OECD club (only for developed nations) and its excellence in start-ups and R&D. The counterpoint to this is that outside a few niche industries like generic drugs, weapons systems and water treatment technology, it is lacklustre.

Traditional commerce such as machinery, chemicals, clothing and food lacks innovation even though it accounts for 50 per cent of the jobs. Over the longer haul, the report suggests prosperity could be threatened by a dysfunctional education system.

One of the few encouraging aspects of the Economist account was its belief that despite the raucous nature of Israeli society, different elements are becoming more tolerant of each other. One of the reasons for this is that birth rate among Charedi families is actually falling whereas among secular Jews it remains steady at 2.4 per family, against 1.5 in the European nations. As a result, by 2020 the Charedim will still only make up 8 per cent of the population. Moreover, he argues the Charedi communities are accommodating modernism.

One thing most commentators, including the Economist writer, agree on, is that Israel’s pure form of proportional representation is unproductive.

An effort is being made, for the first time in Israel’s history, to write a constitution. The objectors are many. The stricly Orthodox want more power for religious courts; Arabs challenge the assumption that Israel is a Jewish state, and Russian immigrants want civil marriages. But it is thought a new constitution with a reformed electoral system could help unify a divided country. The Economist struggled to find the positives, but they are there — if well disguised.

Last updated: 11:16am, June 4 2008