photo by Scott Krane

As the Knesset has decided to build homes in East Jerusalem and settlements in Judea and Samaria such as the town of Ariel, a wave of adverse sentiments stress that this solution is counter-intuitive.

Sever Plocker of Ynet wrote that “east Jerusalem, West Bank settlements and the Golan Heights in Israel’s statistic figures reduces the per capita income and increases inequality.” He gets his facts from a recent study done by the Organization for Economic Co-operation and Development (OECD).

Have a look at data done by the study:
Israel’s population within the Green Line included 6.7 million residents in 2009. An additional 440,000 residents lived in east Jerusalem, 290,000 in West Bank settlements, and 41,000 in the Golan Heights. From 1997 to 2009, the east Jerusalem population grew by 40% and the settlement population rose by almost 100% – at a pace of 8% a year. The Israeli population within the Green Line grew at a pace of only 2.2% a year during that period.

The economic inequality in the territories, which include the settlements and east Jerusalem, is 10% higher compared to the inequality in income within the Green Line – and in both cases it is one of the highest among OECD members.

The poverty rate in Israel, both within the Green Line and in the territories, is the second highest among developed countries – after Mexico.

The inclusion of the settlements and east Jerusalem adds about 4% to Israel’s gross domestic product, but reduces the GDP per capita by a significant rate of 6.5% a year. “Without east Jerusalem, the Golan Heights and the settlement, the GDP per capita within the Green Line would have been 6.5% higher. The post-1967 territories pushed Israel’s GDP per capita down,” the OECD rules.

In the budget year of 2007, the Israeli government spent some NIS 12.5 billion (NIS 14.5 billion in 2011 prices) on the West Bank settlements, Golan Heights and the annexed part of east Jerusalem – a 10% addition to the State Budget. In addition, NIS 5.5 billion were invested that year in the settlements and east Jerusalem, NIS 2.4 billion of them on housing construction.

Meanwhile, Prime Minister Benjamin Netanyahu speaking at the Knesset Finance Committee in response to the month long protests for social justice said the issues will “not be solved in days, but in weeks”.

Bibi said told reporters,

“They lived beyond their means using financial leverage and loans. That bubble has now popped… In addition to global issues Israel has specific problems. The first is housing, because Israelis pay three times the Americans do for housing and that’s not fair. The second one is deformity in taxes, and the third is that we have cartels and monopolies and we will take care of this. The last problem is the distribution of the burden…Certainly not in days, but we will do it in weeks…”