Palestine’s hope

Nazareth battles obstruction to become entrepreneurship hub

Away from the geostrategic dramas playing out in the Middle East these days, some Arab-Israelis are seeing quiet progress. The community’s latest success came in late April when Nazareth, Israel’s largest Arab city, opened its first industrial park. Set up by Israeli billionaire Stef Wertheimer — who has built several such projects elsewhere — and with help from the Nazareth municipality, the $22 million park was 12 years in the making because of “bureaucratic difficulties” — deliberate delays by Israeli officials to frustrate the country’s Arab community. Now completed, it aims to host 25 export-oriented companies that could provide 1,000 jobs within a decade.

That goal looks attainable. Three companies already operate in the park: an international telecom firm employing 100 workers; a project founded by a Nazareth couple that manufactures neurosurgery and neurology products; and another Arab-owned facility that provides outsourcing solutions for light manufacturing.

Job creation is a challenge for every growing demographic in the Middle East. For Arab-Israelis, a group of over 1.5 million that is sometimes ignored in debates over the future of the Palestinian people, the challenge is complicated by their economic context. Most are not well off. Although comprising roughly 20 percent of the Israeli population, their contribution to the country’s gross domestic product is only 8 percent. About half of Israel’s Arab families are considered poor by World Bank standards, compared to the national average of 20 percent.

Employment activity is also below par. Only 41 percent of Arab-Israelis participate in the Israeli labor market, compared to 60 percent of Jews. The labor force participation rate of Arab women is particularly low, stuck between 15 and 20 percent over the last four decades.
The Nazareth industrial park also aims to spur entrepreneurship in the Arab community, which suffers from a scarcity of university graduates. Only 70,000 Arab-Israelis have university degrees, less than five percent of the community. That is a vastly smaller ratio than the one for the state’s non-Arab population, 35 percent of which possess a university degree.
The lack of access to higher education impedes the advancement of Arab-Israelis. Only about 10 percent of students pursuing higher education in Israel are Arabs. In part, this is because most universities are located away from Arab population centers. There are other forms of discrimination, as well. Social prejudice continues to discourage Arabs from enrolling and graduating. In addition, less than 1 percent of academic staff in Israeli universities is Arab.

However, in a development that has not been highlighted regionally or otherwise, that bleak picture may now be starting to change. After a struggle over three decades long, Israel finally accredited the Nazareth Academic Institute (NAI) a few years ago as the first official academic institute in the Arab-Israeli sector since the establishment of the Jewish state. A university college with its first batch of students due to graduate soon, NAI is committed to providing equal access to higher education, especially for young, poor Arab men and women, in order to close the education and employment gaps between Arab and Jewish Israelis.
For Arab-Israelis, this is a great leap towards establishing the first full-fledged Arab university in the country. Until then, NAI will be providing Bachelor’s degree programs in chemistry and communication, and it is planning additions in computer science and organic agriculture, among other subjects. NAI is looking to found a medical science faculty, as well, in cooperation with United States-based Cornell University.

There are seven such colleges in the northern Israeli region of Galilee — six of them are in mainly Jewish areas and are state-funded. Only NAI does not receive such financial aid and must depend on private and municipal donations. Although seeking to support Arab areas such as Nazareth, NAI accepts non-Jewish and Jewish students alike.

Of course, NAI and other initiatives do not mean that economic discrimination against Israel’s Arab minority has suddenly disappeared. Peaceful coexistence of different groups within Israel’s 1948 borders will only come when Israeli Arabs and Jews have a similar standard of living derived from the provision of equal opportunity. That, and not separation walls or an Iron Dome, will be the basis of true security for the country and the rest of the region.


Riad al-Khouri id principal at DEA Inc in Washington, DC

Riad Al-Khouri is Middle East director of GeoEconomica GmbH