A Jewish-run charity in the UK has pledged £100,000 to a project benefiting Arab students, one that a leading Israeli economist has described as vital to the future of his country.

The Pears Foundation is the first such organisation to contribute to a new scholarship fund for Arab students in Israel. The fund, to be jointly financed by the Israeli government and Jewish philanthropists, has a target of around £3.2 million a year, from which up to 1,800 students will benefit.

Professor Manuel Trajtenberg — who chairs the planning and budget committee of the Council for Higher Education in Israel — said that helping more students into degree-level education was “crucial for the future of Israel”.

Speaking at a lecture in London, he said the contribution of Jewish communities around the world “may make a big difference, not just because of the money, but the message that goes with it; which says the Jewish people in Israel and abroad understand that the Arab citizens of Israel are part and parcel of Israeli society, and we want to treat them as such”.

The key to improving the lot of less well-off groups in Israel such as the Charedim and Arab communities, was encouraging greater access to higher education, he said. “Nothing else will work if you don’t do that… In the 21st century, you cannot enter the labour force just by finishing high school.”

The number of Charedim in higher education institutions has risen from a handful to more than 7,000 in 12 years. Israel’s Arabs, while forming more than a quarter of the student-age population, represented only 12 per cent of students actually in higher education.

Prof Trajtenberg was in Britain to attend an event organised by the UK Task Force on issues relating to Arab citizens of Israel, and to meet philanthropists.

The joint chairmen of the task force, Trevor Pears — who is executive chairman of the Pears Foundation — and UJIA chief executive Michael Wegier, said that the scholarship fund was “a fantastic opportunity for the British Jewish community to address an issue which is fundamental to Israel’s future prosperity.”