"If we don’t succeed in closing gaps between the Arab & Jewish sectors, the entire economy will continue to decline”

The gaps between the Arab and Jewish education systems remain as they were, according to Bank of Israel data presented by Prof. Adi Brender, Head of the Research Division of the Bank of Israel, at the Arab Economic Forum conference held in collaboration with Calcalist and the Ministry of Minority Affairs.

Brender commented in detail on the narrowing of the gap between Jewish and Arab society, "You see that the disposable household income among adults over the age of 44 was 53% of that of the Jews. As for the young people, here the gap is 44%, meaning their income is 56% of the non ultra-Orthodox Jews.

"There is also a very large gap in the rate of the employed, both among men and women, it has narrowed slightly among women in the last twenty years, but among men it has not narrowed at all. There is a certain reduction in the gaps in academic education, among women there is greater progress, but there are still large gaps."

Brender added that the question of the gaps is not only a social one, and that it is an economic issue: "There is a quarter of Israel's population here, and if we do not succeed in closing these gaps, the entire economy will continue to decline and we will not be able to close the gaps with the rest of the world," he said. According to him, in the strategic reports that the Bank of Israel submits to the Israeli government, it defined the integration of the Arab society in the Israeli economy as an economic-strategic issue.

Regarding Israel's economy, Brender said that in recent quarters, exports have been falling due to the impact of world trade. "The employment market is good, the participation rates in it are good. The high-tech sector was hit by the global recession, there is a noticeable decrease in the hiring of this sector and it is the main engine of growth in the economy. The sector is not declining, but it has stopped its growth, it is important to remember that. We hear a lot about the decline in capital raising in high-tech and the question arises as to whether this reflects the global economy or is it unique to Israel. You can see that it was a global phenomenon, but the decline in Israel was significantly greater than in other countries. There is a unique gap here in Israel. It is a unique shock."

Regarding inflation, he said that in recent months we have seen a moderation in the level of inflation. "Inflation has moderated in recent months and we see a path of decline from about 5% to about 3% and we estimate that the upcoming data will indicate inflation of about 4%, which is reasonable. In the long term, the estimate is that inflation will continue to decrease. Against the positive trend in inflation there is a significant threat when it comes to the exchange rate. We estimate that the shekel is undervalued. In the past, the relationship between the exchange rates was very clear, but since the beginning of the year, the gap has increased and amounts to more than 10%, which translates into an additional inflation of about one and a half percent."

Also regarding inflation, Brender said: "The increase in interest rates led the public to significantly reduce consumption, the rate of growth is slow, and it is interesting that since the pandemic the rate of consumption has not recovered."

Meir Bing, Director General of Ministry of Social Equality

Meir Bing, the director general of the Ministry of Social Equality, said on the subject of reducing the gaps that there are several decisions regarding the Arab sector that are bearing fruit. “We saw 38 authorities that rose in the ranking in the Arab society, this shows that something good is happening here and there is also a significant increase in education in the Arab society. We continue to provide budgets for middle schools and high schools in order to reduce the class sizes and there is a large increase in eligibility for matriculation. Even in higher education there is a big jump in the number of students. There is still a lot of work, there is a large increase in female students and a small increase in the number of male students."