Ha’aretz Daily Newspaper

Record budget as Finance Ministry warns of economic decline

By Zvi Zrahiya and Moti Bassok , TheMarker October 9, 2007 http://www.haaretz.com/hasen/spages/910960.html

“…The allocation for the 2008 defense budget will climb to an all-time record of NIS 50.5 billion, constituting more than 16 percent of the state budget, about 7 percent of Israel's gross national product. Civilian expenditure clauses total NIS 11.1 billion. Pension payments to career army personnel constitute the largest single expenditure in this section of the defense budget, totaling NIS 4.3 billion… Some NIS 1.2 billion will be diverted in 2008 to construction of the separation wall (the so called ‘seam area project')….”

London Review of Books

“You are terrorists; we are virtuous” by Yitzhak Laor http://www.lrb.co.uk/v28/n16/laor01_.html

Even while they are still serving, our generals become friendly with the US companies that sell arms to Israel; they then retire, loaded with money, and become corporate executives. The IDF is the biggest customer for everything and anything in Israel. In addition, our high-tech industries are staffed by a mixture of military and ex-military who work closely with the Western military complex. ...”


Knesset passes sweeping budget cut to pay for Lebanon war By Moti Bassok and Guy Leshem April 20, 2007 http://www.haaretz.com/hasen/spages/850926.html

“NIS 392 million from the cuts will be given to the Defense Ministry, another NIS 92 to other security expenses, NIS 100 million will be spent on 'strengthening the North,' and NIS 42 million was allocated for activities of the Prime Minister's Office….. The IDF has decided that the way to fix its problems in the Second Lebanon War is to put more money into the pockets of the standing army……..The raises will reach a maximum of 15 percent for lower-ranking soldiers, but senior officers will receive raises, too - though much smaller ones percentage-wise. A major general will get an increase of about 1 percent. This will be in addition to an annual bonus of two monthly salaries for every officer in the career army……As far as is known, the increases will apply to all officers, regardless of whether they are in combat or headquarters units, at the front or in the center of the country. The IDF has cut 30 percent of its personnel in recent years and has implemented salary cuts for junior officers. However, the cuts never reached the senior ranks and also did not affect pension rights. The treasury's attempts to link approval of the defense budget to cuts for senior officers bore no fruit….”

Le Monde Diplomatique

Israel’s age of austerity
By Joseph Algazy October, 2003

“The Israeli government adopted an austerity budget in September, cutting social welfare to pay for defence and settlements. Israelis were already suffering from the worst recession since 1953. Now one family in five does not have enough to eat…

Barbara and Shlomo Swirsky, two sociologists who run Tel Aviv’s Adva Centre, argue that "the blows dealt to the social welfare system on the pretext of budgetary rigour reflect a change in the scale of values. The affluent Israelis who people the corridors of power are influenced by Social Darwinism. According to that, the strong deserve help because they are strong; whoever falters, for whatever reason, is sure to fall by the wayside, and it is therefore pointless to invest in him. The weak are useless. That is why, during all these years of so-called state poverty, our governments have spent a great deal of money on exempting capitalists from taxes, on excessive military expenditure and settlements, and on huge salaries for top civil servants."

Jewish Week:

To Have And Have Not

“As new luxury apartments sprout up in Jerusalem, poverty deepens and the income gap widens.” http://www.thejewishweek.com/viewArticle/c40_a3540/News/Israel.html

New Jersey Jewish Standard

Israeli Schools

“Israel has one of the largest gaps in the Western world between wealthy and impoverished students.”

Business Week -

Israeli Economy Shrugs Off Scandals
March 28, 2007

“Widening Income Gap…Some 20% of Israel's population is living below the poverty level, the highest percentage of any Western country.”


Prime Minister’s Office

Socio-Economic Agenda, Israel 2008-2010 - http://www.pmo.gov.il/PMO/Templates/General.aspx?NRMODE=Published&NRNODEGUID=%7bF38B5B93-7384-47DC-8761-E51F982043B0%7d&NRORIGINALURL=%2fPMOEng%2fPM%2bOffice%2fDepartments%2feco20082010%2ehtm&NRCACHEHINT=Guest#three

“The goal is to reduce the incidence of poverty among Israeli families to a rate of 17.2% by the end of 2010, compared to 20.2% today.”


State report: More than 1 in 3 Israeli children live in poverty
January 23, 2006

“The number of poor in Israel has risen sharply since 2000, with a staggering 34.1 percent of children now living in poverty, according to a report issued Monday by the National Insurance Institute.”


NII: One-quarter of Israelis live below poverty line
January 24, 2006
http://www.haaretz.com/hasen/spages/673898.html Hebrew: http://www.haaretz.co.il/hasite/pages/ShArtPE.jhtml?itemNo=674065

“A quarter of Israel's citizens are poor, according to the National Insurance Institute (NII) poverty report released yesterday….. The net income of the upper decile, meanwhile, increased by 2.8 percent….”




Shlomo Swirski and Etty Konor-Attias
Presentation made in the Knesset November 13, 2007

“As we have seen, the defense budget was increased; this was the result, among others, of the activity of a very successful defense lobby comprised of the leaders of the defense services and industries. In contrast, we saw that the budgets for the social services were not increased. … the policy of keeping expenditures down has had an adverse effect on the government’s ability to invest in Israeli society. But budget cuts have not been across the board: one notable exception is the defense budget.”

“The Cost of Occupation

Holding on to the Palestinian territories requires large budgetary outlays. We saw the additions to the defense budget attributed to the two Intifidahs. The Brodet commission anticipates that this outlay will continue and even increase in the coming years. Among other things, the Brodet commission recommended training special units to police the territories….”


Report: Israel's growth benefiting only the wealthiest

December 16, 2007
Hebrew: http://www.haaretz.co.il/hasite/pages/ShArtPE.jhtml?itemNo=934940&contrassID=2&subContrassID=21&sbSubContrassID=0

“Only Israel's wealthiest 20 percent have benefited from the economic growth of the past three years, according to report to be published Sunday by the Adva Center. The center, which researches equality, found that the top fifth's share of the national income rose from 44.2 percent in 2004 to 44.8 percent in 2006, while the bottom 70 percent saw its share decline. The eighth decile's share remained unchanged. Since 1990, the report noted, the top two deciles have increased their share of the national pie by more than 10 percent, at the expense of the less well-off.”


Report: 19 Israeli families control one-third of the economy

July 19, 2007 http://www.haaretz.com/hasen/spages/884060.html

“The total income of the nineteen richest families in Israel was NIS 248 billion for 2006, or one third of the revenues of the 500 leading Israeli companies, according to the Concentration Index published Thursday. The annual income of the 19 families is equal to 88 percent of the state budget or 54 percent of the business sector's share of GDP.” (Editor’s note: At least two of these families are connected with companies that profit from Israel’s occupation. Research into these connections is ongoing.)

Ynet News

Resource Allocation 'Settlements got more funds from State'

February 12, 2006 http://www.ynetnews.com/articles/0,7340,L-3215103,00.html

“Settlements received preferential treatment when it came to municipal budgets in 1995-2004, Adva Center report says

According to the document, the municipal per-capita income drawn from Interior Ministry funds stood at NIS 1,241 (about USD 275) in Gaza, the West Bank, and the Golan Heights. Meanwhile, residents in development towns only received an average of NIS 802 (about USD 180) per capita and Arab communities received NIS 738 (approximately USD 170) per resident.

Settlements enjoy double per-capita funding. Meanwhile, settlements were also on top when it came to municipal funds earmarked for providing various public services, such as education, health, and welfare. The differences were even more blatant when it came to special funds earmarked for development. In 2004, settlements enjoyed almost double the per-capita funding compared to development towns.”  

Jerusalem Times

Settlements in Focus 11/15/2005


“There are two major infrastructure projects currently underway in the Gush Etzion area - both taking place outside of the actual Gush Etzion bloc and for the exclusive benefit of settlers living outside the bloc and on the eastern side of the route of the security barrier.  The first is the Za'atra bypass, popularly known as the "Lieberman Road" (named for Avigdor Lieberman, a prominent right-wing politician who served as the Minister of Transportation in the first government of Prime Minister Sharon; Lieberman lives in the settlement of Nokdim, one of the primary beneficiaries of the bypass road).  Probably the largest infrastructure project currently under way in the West Bank, the Lieberman Road is a multi-million dollar venture to carve a 10 km. modern highway through remote hills and mountains (requiring the construction of at least four bridges).  The purpose of the road is to furnish a more direct route for around 2500 settlers (living in Tko'a, Nokdim, Ma'ale Amos, and Asfar) to reach Jerusalem while bypassing Palestinian population centers.  As is generally the case, the construction of the Lieberman Road has involved massive land confiscations from local Palestinian landowners.” 


Thursday, December 29, 2005

Holocaust survivors go hungry in Israel


By Bradley Burston
Thursday, 29 December (89 days to election day)

“It is an image that resists any attempt to throw it into the denial pile: the specter of Jews surviving the Holocaust only to go hungry in Israel. If it has done nothing else, the current election campaign has focused the public's radar on social problems which have gone unaddressed for years.

Every day, it seems, the human needs of unheralded Israelis come to light in a shocking new way. The case in point Thursday was the finding that some 40 percent of Holocaust survivors in Israel are living below the poverty line….”

YNet News

Israel's elderly: Poor and suicidal


“International Day of Elderly is no reason to celebrate for Israel's golden agers. Over 50 percent of suicides in Israel every year committed by people aged 65 and more; every fourth elderly poor
…..In other words, every fourth elderly person lives below the poverty line.”


75 percent of poor families cannot afford medication, survey shows

Friday, December 02, 2005

http://www.haaretzdaily.com/hasen/spages/653030.html Hebrew: http://www.haaretz.co.il/hasite/pages/ShArtPE.jhtml?itemNo=652936

“Some 75 percent of families in need of medication and supported by non-profit organizations handing out food for the needy cannot afford to buy medicine, according to a survey carried out among families supported by the Latet organization, which helps poor families….
The harsh data in the report shows that poverty has worsened in 2005”


25% of Israelis neglect health because of high cost of medical care

January 31, 2006

Hebrew: http://www.haaretz.co.il/hasite/pages/ShArtPE.jhtml?itemNo=676829  [The Hebrew report, which was written by Ron Reznik, and is not a translation of the report below, states that between 28%-30% of the public can’t afford medical treatment. The other statistics agree.]


Poverty report paints picture of worrying gaps in society

December 13, 2005

“The richest 20 percent of Israeli citizens earned 44 percent of all income in 2004, compared to 40 percent in 1990, according to the Adva center's annual "alternative" poverty report released Monday. The only income to increase over that same period was that of the top 20 percent, while the income of the remaining 80 percent either dropped or remained unchanged.”

YNet News

Fifth of wage earners below poverty line

New study reveals economic growth only benefiting wealthy, reveals worrying discrimination against Mizrahim, women, Arabs
“The gaps between Israel's rich and poor are only growing, the institute says, despite the impressive economic growth registered on the national level. ‘Promises made by politicians, that the growth will seep downward, are not being fulfilled,’ the researches write. 

The socio-economic policy that has guided the Israeli government in recent years has only increased the gaps in Israeli society between rich and poor, say Adva researchers. This is the central claim of the institute's comprehensive study of the social situation in 2007. ‘Since 2003, Israel has enjoyed an economic growth, but the social gaps are not shrinking,’ concludes the report.”


Israel's deep, desperate South


“This is Israel's South, 2007. The neglect and poverty are striking, especially when compared to the prosperity in the center. ….Within months, a majority of the localities in the South were facing collapse, after the budget-balancing grants that had been allocated to economically weak communities had been slashed. Suddenly there was no money in the coffers, and the main supplier - the state - had shut the faucet. The poverty rates skyrocketed, soup kitchens opened in nearly every community and charity organizations sprouted like mushrooms.”


Holocaust victims' bank accounts cut by NIS 600 million

March 12, 2007
By Amiram Barkat

“The estimated value of bank accounts in Israel of victims of the Holocaust is only about NIS 400 million, according to the recommendations of a "panel of experts" that were submitted to Justice Minister Daniel Friedmann and will be released this morning.

Two years ago, the Knesset Inquiry Committee on the Location and Restitution of the Assets (in Israel) of Holocaust Victims estimated the real value of the same accounts at about NIS 1 billion,….. The committee's decision to adopt the formula it chose theoretically saved the state and the banks hundreds of millions of shekels in payments to heirs of the original account-holders, needy Holocaust survivors and Holocaust memorial institutions….”

Jerusalem Post

Never again?

Feb. 15, 2007

“It's hard to believe there are Holocaust survivors living in poverty in Israel, but there are. These are survivors in their 70s and 80s who eat lunch at soup kitchens and get their clothes from charity, or who have to choose between buying groceries for a decent meal and buying their medications, or who don't have the money for a hearing aid, or glasses, or dentures. There are about 70,000 of them in this country. One in four Holocaust survivors here lives this sort of life.”

THE FIGURE 70,000 impoverished Holocaust survivors in Israel is a conservative estimate, the one used by the Keren

BBC News


Holocaust survivors 'in poverty'


“A Holocaust survivor's support group has said 40% of survivors in Israel are living below the poverty line, Israel Radio has reported.”

Published: 2005/12/29 12:57:21 GMT


Privatization today, illness tomorrow

Wednesday, September 13, 2006
Hebrew: http://www.haaretz.co.il/hasite/spages/762160.html

“But for years the treasury has been waging a stubborn and systemic war of attrition against the health services, a war whose most blatant symptom is the blow to preventive medicine. Every few months a focus of privatization erupts into public awareness. There was the transfer of the well-baby clinics to the health services organizations, thus eliminating - for reasons of economic feasibility - preventive treatment for remote, weak populations: small peripheral communities, the Bedouin, foreign workers without residence permits, et al. There was the plan to privatize the hospitals for the mentally ill, and now there are the school health services. In all these cases, the direct victims are those who cannot afford the increasingly expensive health services ….

A society where only the children of the rich receive inoculations and diagnostic tests, whose public health nurses - once the clear symbol of the system's responsible, professional and human touch - speedily leaf through the files of thousands of children at record pace, while being tyrannized and exploited by manpower companies (see: security and caregiving firms) - is a society conducting its expenditure accounts blindly and obtusely, because it has apparently given up on tomorrow.”

Ha’aretz Tuesday, November 14, 2006

Adva Center: Social services budgets eroded since 2001


“The Adva Center, a non-partisan policy analysis organization, stated Tuesday in its analysis of the 2007 budget that the first decade of the 21rst century, marked by a continuing erosion of the monies alloted to social services, will go down as a lost century for Israelis.”


Proposal ends urban renewal project in 65 communities

December 24, 2006

“Housing and Construction Minister Meir Sheetrit will submit for cabinet approval today a decision to cancel the neighborhood rehabilitation program Project Renewal in some 65 of the 100 neighborhoods in which it was implemented.

…the Housing and Construction Ministry concedes that there is no chance of renewed funding. Due to budgetary constraints, the ministry has decided to focus on 37 particularly weak neighborhoods….”



Congressional Research Service

Report to Congress: US Foreign Aid to Israel


“In 1998, Israel proposed gradually eliminating the $1.2 billion economic aid [to Israel’s domestic economy] and increasing the $1.8 billion in military aid by $60 million per year over a 10-year period beginning in the year 2000. Subsequent appropriations for Israel included cuts of approximately $120 million in economic aid and increases of $60 million in military aid each fiscal year….Congress also appropriates funds for joint U.S.-Israeli missile defense programs.

In August 2007, the Bush Administration announced that it would increase U.S.

military assistance to Israel by $6 billion over the next decade. The agreement calls

for incremental annual increases in FMF to Israel, reaching $3.1 billion a year in the

near future. The Administration has requested $2.4 billion in military assistance and no economic aid for Israel in FY2008. H.R. 2764, the Consolidated Appropriations Act, 2008 provides the full Administration request.”

New York Times

Israel to Get $30 Billion in Military Aid From U.S.

August 17, 2007

JERUSALEM, Aug. 16 — “Israel and the United States signed a deal on Thursday to give Israel $30 billion in military aid over the next decade in what officials called a long-term investment in peace.”


Knesset Speaker Itzik secretly raising Knesset officials' salaries By Zvi Zrahia February 4, 2008

“When Avi Balashnikov was appointed director general of the Knesset in June 2006, the Knesset Finance Committee was told he would receive the salary of a ministry director general, about NIS 32,000 a month in gross pay. But Knesset Speaker Dalia Itzik recently decided to give Balashnikov a special 20% raise, known as a "parliamentary supplement." Knesset Secretary General Eyal Yinon will also receive NIS 38,000 - the same as Balashnikov. However, when Yinon was appointed last year, he was told he would earn NIS 32,000…. Ministers make NIS 36,920 a month while MKs get NIS 33,210. Ministry directors general, which include division heads in the treasury, make about NIS 32,000.”

Brit Tzedek v’Shalom: The Jewish Alliance for Justice and Peace


“Successive Israeli governments have implemented a sustained policy of financial inducements designed to encourage Jewish citizens to migrate to the West Bank. Most of the settlements in the West Bank are defined as national priority areas. Accordingly, the settlers and other Israeli citizens working or investing in the settlements are entitled to significant financial benefits.

These benefits include:

1. Generous loans for the purchase of apartments, part of which is converted to a grant

2. Significant price reductions in leasing land

3. Incentives for teachers, exemption from tuition fees in kindergartens, and free transportation to school)

4. Grants for investors, infrastructure for industrial zones

5. Incentives for social workers

6. Reductions in income tax for individuals and companies

In the year 2000, the average per capita allocation from the Israeli government to the Jewish local councils in the West Bank was approximately 65% higher than the average per capita allocation in local councils inside Israel. The discrepancy in the grants for the regional councils is even greater: the average per capita grant in 2000 for the regional councils in the West Bank was 165% of that for a resident of a regional council inside Israel.

One of the mechanisms used by the government to favor the local Jewish authorities in the West Bank, in comparison with local authorities inside Israel, is to channel funding for the settlements through the Settlement Division of the World Zionist Organization (WZO). While not an official government body, the Settlement Division is staffed and largely directed by political appointees. Its quasi-governmental status enables it to circumvent public commitments made by successive Israeli administrations to freeze settlement growth. The Sasson report on the status of illegal settlements found that the WZO serves as a conduit for the creation of illegal settlement outposts and in some cases, that it has knowingly built these outposts on Arab land.”

The World Bank Institute

Who Is Afraid of Data on

Governance & Corruption?:

Inconvenient Facts for

Statisticians, Academics, & Politicians

By Daniel Kaufmann, The World Bank Institute July, 2007

<http://siteresources.worldbank.org/INTWBIGOVANTCOR/Resources/IsraelCBureauStatLecturep7-06.pdf. page 39>. According to these charts, control of corruption in Israel has declined significantly since 1996, reaching a low point in 2004, and attaining only slightly better performance in 2006. Charts suggest that 33% of Israeli firms pay bribes for corporate procurement. Page 40. The amount of these bribes averages 5% of the contract value. Page 41

New York Times

Foreigners Exact Trade-Offs From US Contractors

By Leslie Wayne February 16, 2003


Israel, too, raises eyebrows. It is one of two countries — Egypt is the other — that receive direct American military aid to buy American-made weaponry; but unlike Egypt, Israel insists on offsets.

In 1999, according to the Commerce Department, the United States gave Israel $1.86 billion in military aid, with the requirement that the bulk be spent on American goods. With this money, Israel has pitted American contractors against one another. Lockheed and McDonnell Douglas were once in an offset competition for a $2 billion fighter jet deal. Because of the technology it gained through these offsets, Israel has developed its own weapons systems and competes against American contractors for orders.

Critics have called Israel's actions double dipping, and the Commerce Department asked Congress to halt it in 1998, but the proposal had no political support.

Congressional Research Service

Israel: U.S. Foreign Assistance

Updated April 26, 2005

Clyde R. Mark

Foreign Affairs, Defense, and Trade Division

Allegations of Misuse of U.S. Aid


The United States stipulates that U.S. aid funds cannot be used in the occupied territories. Over the years, some have suggested that Israel may be using U.S. assistance to establish Jewish settlements in the occupied territories, but Israel denies the allegation. Because U.S. economic aid is given to Israel as direct government-to-government budgetary support without any specific project accounting, and money is fungible, there is no way to tell how Israel uses U.S. aid.


Peace Now: No new West Bank outposts, but more settlers in 2005

February 06, 2006 http://www.haaretzdaily.com/hasen/spages/679476.html

Editor’s note: At least one Israeli politician, Avigdor Lieberman, has benefitted from infrastructure activities in the settlements, activities that our tax and investment dollars help to pay for. A multi-million dollar bypass road is being constructed to link his settlement and others in the vicinity to Jerusalem. It is named for him. Other Knesset members who live in the settlements benefit from similar projects and from activities of companies that sustain the occupation.

The government also continues to pave new bypass roads throughout the West Bank.

"The Za'atara bypass road is apparently the largest infrastructure project being carried out by the State of Israel in the West Bank today," the report said. The road connects southeast Jerusalem with the isolated settlement of Nokdim. (Ed. Where Israeli politician Avigdor Lieberman lives)

In the first six months of 2005, construction began on 1,097 housing units compared to just 860 during the first half of 2004.”