Israel Second Most Unequal Economy in World

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  June 1, 2015

Israel Second Most Unequal Economy in World

Shir Hever says the current OECD statistics on inequality in Israel would be even worse if the Palestinian population in the occupied territories was taken into account
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Shir Hever is an economist working at The Real News Network. His economic research focuses on Israeli occupation of the Palestinian territory; international aid to the Palestinians and to Israel; the effects of the Israeli occupation of the Palestinian territories on the Israeli economy; and the boycott, divestment and sanctions campaigns against Israel. His first book: Political Economy of Israel's Occupation: Repression Beyond Exploitation, was published by Pluto Press.


SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I'm Sharmini Peries coming to you from Baltimore.

When it comes to inequality Israel is among the highest in the OECD countries. It follows the United States in this regard. Further, according to the Times of Israel, the richest 10 percent earn 15 times more than the poorest 10 percent. Here to discuss the inequality and those at the bottom of the economic ladder from Göttingen, Germany is Shir Hever. Shir is an economic researcher in the Alternative Information Center, a Palestinian-Israeli organization active in Jerusalem and Beit Sahour.

As always Shir, thank you so much for joining us today.


PERIES: Speak to your observations here in terms of the people at the bottom of the scale.

HEVER: OECD is an organization that publishes statistics. It also gives some prestige to its members because it's supposed to be an organization of developed democracies. That's why Israel tried so hard to become a member, and as soon as Israel became a member of the OECD in 2010 the OECD started publishing very unflattering statistics about Israel, and this is one of them. Inequality in Israel is extreme. And that's very interesting considering the fact that Israel used to be, in 1965, one of the most equal economies in the world, at least in the non-communist world. And over these last 69 years Israel became the second-most unequal economy in the developed world. Second after the United States.

But if we look at the statistics a bit deeper we see that also the inequality in Israel and the inequality in the United States is not the same. The United States being one of the most capitalistic economies in the world has very extreme inequality, but the inequality in the United States is focused in the top. There are millionaires and there are billionaires, and the inequality amongst them is very stark. But people who live in poverty in the United States, there are quite a lot of those. They don't have such widely varying income levels compared to each other.

While in Israel it's a different situation. In Israel there is an elite of wealthy millionaires and a few billionaires as well, but the inequality is focused at the bottom. And that's very special, because the people living in poverty in Israel, some of them are actually living in poverty levels comparable to the poverty levels that you see in Western democracies, such as in the United States. But there are also entire populations that live in levels of poverty which are akin to those in developing countries. And that inequality is very clearly traced according to ethnic and national lines because of very entrenched institutional discrimination against minorities in Israel.

PERIES: And what is that breakdown? What does it look like along racial lines?

HEVER: Well, we have poverty among Jews, and we have poverty among Palestinians. And the poverty among Palestinians reaches more than 40 percent. Even more than 45 percent if we do it based on a number of individuals rather than a number of households. And we have poverty among ultra-orthodox Jews, that's also a comparable number. So very high poverty levels there. And also among the Palestinian citizens of Israel where the poverty levels are very high, we can see differences among the Bedouins who live in the south of Israel, in the Negev, and their communities are not recognized by the state. So their poverty is much more extreme because they don't receive even basic government services.

And we also have poverty of immigrants. Recently there's been very large demonstrations by immigrants or the descendants of immigrants from Ethiopia, black-skinned Israeli citizens who suffer very deep discrimination, and also large numbers of them live under the poverty line.

And then all of that very complex system of discrimination doesn't even begin to take into account all of the subjects, there are more than 4 million subjects of the Israeli government who are not citizens. And when we look at these people, who are part of the Israeli economy but are not considered by the OECD for example to be even part of the statistics, such as the people living in Gaza, they suffer from over 80 percent poverty rate, according to the international poverty line published by the World Bank. So these numbers are much more alarming.

PERIES: And when you say it's not factored in by the OECD, because of their status as non-citizens?

HEVER: Yeah. Because the OECD--well, like I said in the beginning, the Israeli government really tried very much to become part of the OECD. And that put the OECD in a difficult position because they don't really know what Israel is. Where are the borders of Israel. Because the Israeli economy certainly includes the occupied territory, but the OECD, most of its members are European countries, and their policy is to say that they don't recognize occupation. So in fact, their solution was just to close their eyes, not to see one-third of the population under Israeli control, part of the Israeli economy, as if they don't exist.

If you remove that third of the population and look only at the two-thirds who happen to be citizens of the state of Israel, then you get a distorted view, as if Israel is a modern democracy with economic levels quite similar to south European countries. But of course, that is a very distorted view. That's not the entire population of Israel, and the people who live in the West Bank and the Gaza Strip, their income levels on average are much lower, and they still pay taxes to the Israeli government. They still use the Israeli currency. But the OECD chooses not to see them.

PERIES: And even with that distortion, it's coming out looking pretty bad.

HEVER: Yeah. Yeah. And I think we can learn something from this. We learn that when we see--when we have a government that allows a certain kind of discrimination to be established on an institutional level, that some people are just worth less than others, that creates a disempowered workforce. People who cannot fight for their labor rights because they are discriminated based on their ethnicity and nationality. And then you start to see the inequality expand and grow to other sectors of the society.

And because the Palestinians who are allowed to be treated this way, there is now very deep discrimination against Jews from, who originate from Arab countries, or Jews who originate from Ethiopia, or other--or against women. And all of these groups suffer enhanced discrimination because when it was time to fight for the basic concept that all human rights are--that all human beings are equal, they found it convenient or they did not manage to stop these discrimination against Palestinians. And now they find themselves next in line for this discrimination.

PERIES: Shir Hever, thank you so much for joining us today.

HEVER: Thanks for having me.

PERIES: And thank you for joining us on The Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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