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Israel wakes up to potential of Arab sector

By Karoun Demirjian
NAZARETH, Israel — In the year since he graduated from Israel’s top technical college, Samer Kablawi has sent out over 50 resumes to high-tech companies — and had one interview.

It’s a predicament that may seem typical for young graduates in a world still emerging from recession. But Kablawi notes one discrepancy: While his fellow Arab classmates have struggled to find work, most of his Jewish classmates landed high-tech jobs months ago.

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“I don’t want to use the excuse that because I’m Arab, they’re not taking me,” said Kablawi, 29, who is fluent in Hebrew, Arabic and English, and says he did better in school than many of his now-employed classmates. “But when you think about the numbers, it will hit you very hard.”

It’s a refrain long sounded by Arabs citizens of Israel, who argue they face widespread discrimination in the workplace. The Israeli government says it now wants to do something about it, with a $250 million initiative with local venture capitalists to boost the Arab sector.

The aim, say backers — among them President Shimon Peres — is to create jobs, while improving public infrastructure and housing in predominantly Arab areas. Arab leaders, however, are skeptical, pointing to past promises that fell through and saying the money falls short of what’s needed.

“We want to start a New Deal for the Arab population,” said Avishay Braverman, Israel’s minister for minority affairs, who is leading the initiative, in a reference to the New Deal domestic reform program of the U.S. in the 1930s. “It’s moral and right, and independent of that, it’s also wise.”

But a long legacy of ethnic divisions will be hard to overcome. Decades of neglect and discrimination have fueled ever-worsening tensions, and the Arab sector is largely uncharted territory for Israeli lenders and employers.

In Nazareth’s industrial zone — the main hub for enterprise in Israel’s unofficial Arab capital — modest, roughly constructed buildings and cluttered storage yards stand in sharp contrast to the glittering corporate towers of Tel Aviv, or even the modern factories of Upper Nazareth, the Jewish development town next door.

Like most Arab towns in Israel, Nazareth’s industry is mainly small businesses — meaning there are few chances for Arabs like Kablawi and his friends to find jobs in their fields.

There are early plans to help that change — a private investor has announced plans to build Nazareth’s first-ever joint Jewish-Arab industrial park to give local workers easy access to the global high-tech scene. And the government’s revitalization program envisions filling such workspaces through a $200 million investment in Nazareth and nine other Arab communities that’s mostly directed toward helping companies create jobs.

The government is also providing almost half of a $50 million private fund run by Peres’ son, whose venture capital firm, Pitango, won a competitive bid to bankroll 25 to 30 Arab-owned firms in high-tech and service industries, presently being selected.

But to Israeli Arabs, the funding plans are nothing to bank on.

“Any additional budget is welcomed, but it’s still very far from the real needs,” said Ramiz Jaraisy, Nazareth’s mayor. The real test, he said, “will be according to the implementation of the plan.”

He and other Arab leaders point to past promises such as a 2000 pledge to invest about $1 billion in the Arab sector that failed to materialize.

Arabs citizens of Israel make up one-fifth of the country’s population and many have a complex relationship with the Jewish state.

While Israeli law gives them the same rights as Jewish Israelis, they identify strongly with their brethren in the West Bank and Gaza who are not citizens. Most identify themselves as Palestinian.

In practice, they are an underclass, receiving less-than-equal services and treatment — which fans the flames of mutual distrust with the Jews.

Israel’s 1.3 million Arabs account for only about 8 percent of economic activity, according to Israeli government statistics. Arabs lag far behind the Jewish population in income and employment levels, while poverty rates are much higher.

According to a recent parliamentary study, Arabs hold only 6 percent of public sector jobs in Israel — and less than 2 percent of the positions in most of Israel’s government ministries and parliament.

In the private sector, Arab entrepreneurs have traditionally struggled to get loans from Israeli banks due to discrimination or property laws that favor Jewish ownership, said Ayman Saif, director of the government’s economic development authority for minorities.

In recent years, government funding for Arab Israeli towns was reduced, according to the Mossawa Center, an advocacy group for Arab Israelis. Many Arab leaders wonder whether the money they are being promised under the new initiative isn’t simply a trade for funds lost elsewhere.

“We have no reason to believe that everything is going to be better,” said Mohammed Darawshe, co-director of the Abraham Fund, a nonprofit group that promotes coexistence projects.

In fact, recent events suggest that Arab-Jewish relations in Israel are worsening.

In the past few weeks, two prominent Arab-Israeli activists have been arrested on charges of spying for the Lebanese guerrilla group Hezbollah, and the community is presently fending off calls to strip one of their few parliament members, Hanin Zoabi, of her Israeli citizenship for joining a Gaza-bound flotilla that tried to breach Israel’s blockade of Gaza. Zoabi was on board the ship on which nine activists were killed in a clash with Israeli naval commandos.

A new study shows that almost half of Arab citizens are dissatisfied with life in Israel and that about 40 percent don’t believe in Israel’s judicial system and support boycotting parliament elections — a rise over the approximately one-third of Arab Israelis who held similar opinions in 2003.

“At the end of the day, equality doesn’t come from a special plan,” Darawshe said, but only if Arab communities get “the same budget, the same criteria, the same national policy” as Jews.

Saif, the government development official, said banks appear to be waking up to the potential in the Arab sector.

In June, Israel’s premier venture capital association is gathering business leaders to push investments toward the Arab sector. At that time, Pitango’s Arab-focused subsidiary is expected to give its first report on its new investment portfolio.

“The private sector has seen that there is potential in the Arab sector,” said Saif. “Hopefully, in the future, the private sector will tap this potential without the help of the government.”

Copyright © 2010 The Associated Press. All rights reserved.

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