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On December 30, 2015, the Israeli government unanimously adopted a five-year plan (2016-2020) for the Arab population, estimated at approximately NIS 15 billion. The program, which addresses many areas, is built on changes in the current budget allocation mechanism for the Arab minority, so as to ensure enhanced equality. The Ministry for Social Equality will be in charge of implementing the program, together with the budget division of the Ministry of Finance, and will chair an inter-ministerial steering committee that includes representatives from all the involved ministries. The chairman of the council of Arab local authority heads will also be invited. Most of the budget earmarked for implementation of the program is already integrated into the 2016 budget; the rest will require the approval of the Knesset Finance Committee.

The most significant parts of the program include:

a. Education: Special emphasis is being placed on teacher training and professional development, learning achievements, and expanded informal education. The Ministry of Education is to formulate specific goals for improving students’ command of Arabic and Hebrew and increase the rate of those passing higher level mathematics matriculation exams. In higher education, steps will be taken to increase the percentage of Arab students, so that by 2021 they will represent 17 percent of undergraduates, 12 percent of graduate students, and 7 percent of doctoral candidates. The budget for the education programs is not specified in the government decision, but the existing differential budgeting system might possibly ensure the necessary allocation of funds to the Arab communities.

b. Employment: Fifty percent of budgets for various employment tracks will be transferred to populations whose rate of participation in the workforce is low, so as to incentivize employers to hire minorities while bestowing preferential status for women and Bedouins. In addition, at least 25 percent of the annual allocation for building daycare centers will be guaranteed to minority communities, thus increasing daycare options. Some 20 percent of the base budget of the Small and Medium Business Agency will be allocated to minority groups, and further resources will be transferred to encourage small and medium sized businesses in Arab towns.

c. Accessibility: The goal of equality in public transportation has been re-affirmed. Consequently, 40 percent of funds for additional public transportation services, or NIS 100 million – whichever is higher – are allocated for the benefit of Arab towns, until the public transportation coverage equals the national standards. The goal for complete equality in transportation accessibility between Jewish and Arab communities has been set for 2022.

Principal Ramifications

a. Transformation in allocation mechanisms is perhaps the most significant measure in the new program, and connotes a clear public assertion by the Israeli government that it acknowledges the ongoing discrimination in allocations to the Arab population and Arab communities. The prominent objective of the program is that allocations to minorities match those to the Jewish majority. These two components, acknowledgment and change, essentially bespeak a fundamental political change that must be tested over time. The fact that the program was adopted by the current right wing Israeli government, in the midst of yet another time of rising tension between the Jewish and Arab populations, reflects awareness that improving the conditions of the Arab population is an economic and social interest of both the minority and majority. This understanding, which has been promulgated by prominent Israeli leaders – chief among them President Reuven Rivlin – emphasizes that strengthening the Arab population (as well as the ultra-Orthodox Jewish community) is critical to Israel’s economic prosperity. The support for this position from both politicians and professionals, especially within the ranking functionaries in the Treasury and other government ministries, can help ensure the program’s fulfillment. Amir Levy, the head of the budget division within the Ministry of Finance, and Ayman Saif, the director of the Economic Development Authority for the Minorities in the Ministry of Social Equality were the primary movers behind the program. Their continued involvement and commitment is essential for the success of this bold move.

b. The financial aspect: It is possible to understand the current decision in different ways. One is to focus on the profound change in policy, based on the unprecedented scope of the program, more than 20 times larger than previous five-year programs for the Arab sector. The present plan represents 1.3 percent of the entire annual national product, even if the total future expenditure will be less than NIS 15 billion over five years. The other perspective suggests that the program amounts to little more than setting a different pattern of allocation to the Arab public commensurate with its part in the population, representing an affirmative action without a comprehensive enlargement of the overall budget, which opens the way to limited to non-implementation. In fact, as of now, the program does not add a shekel to the approved budget.

c. Implementation: This is not the first comprehensive government program for the Arab population. Like the one formulated during Ehud Barak’s tenure as prime minister, which was only partly implemented, it is possible that the new program will have a similar outcome, particularly given the number of conditions that were attached to it. The most conspicuous condition relates to the housing sector: the Prime Minister has made implementation of this segment conditional on the enforcement of the laws regarding legal construction and building of multi-story housing in the Arab communities. The real meaning of these conditions is still unclear, and may be used as an excuse for lesser implementation. In addition, placing the double responsibility on the Ministry for Social Equality and the Ministry of Finance on the one hand, and the designated ministers, on the other, will not make it easier for the government to implement the program in full.

d. Economic implications: The multi-system approach to the different fields in the program is welcome, as the economic and social challenges of the Arab public are indeed multidimensional and interdependent. However, success will depend on the scope of investment, as well as on the effectiveness of the implementation of the different parts of the program, which necessitate setting clear goals and benchmarks. There are numerous obstacles to real improvement toward equality; some of them are associated with the bureaucracy, and others are cultural and political issues within the Arab sector. Still, if the program comes to fruition and is effectively implemented, even in part, it stands a real chance of a major positive transformation not only within the Arab sector, but in the country as a whole. Similar perspectives should be applied to the ultra-Orthodox Jewish community, which together with the Arab sector will soon represent close to 50 percent of Israel’s population.

e. The political environment: The decision to approve the new five-year plan initiated and vigorously promoted by the professional echelons is only the first important step in the right direction. Despite the growing recognition that it represents a significant boost to the Israeli economy and internal security, it is bound to face many obstacles in the future, including political challenges. Here the role of the Arab leadership will be most instrumental. The positive and moderate approach of most of the Arab members of Knesset, under the fresh leadership of MK Ayman Odeh, who was personally involved in the program’s formulation, and of the Arab local leadership, is a critical element. These figures represent the attitude among the majority of the Arab population, as evidenced by the findings of the recent public opinion poll undertaken by INSS among Israel’s Arab sector. Sixty-nine percent of the respondents said that equal rights for Arabs is the primary issue for them, compared to 30 percent who said that finding a solution to the rights of the Palestinian people was most important. A more cynical theory on the approval of the new program might suggest that the ministers realize that they still have a major leverage on its actual implementation, and as there has been no increase of the overall budget, they will be able to manipulate the allocations according to their political preferences. Clearly, the program’s fate in future years will largely depend on political considerations, and here the Prime Minister's commitment to its full implementation is the most important component.

If implemented with reasonable effectiveness, the program can serve as a solid foundation for a genuine improvement in the socioeconomic condition of Israel’s Arabs, allowing for the proper integration of one fifth of the nation’s population into Israel’s productivity. This might have a primary positive impact on the country's GDP. Implementation of the program will also increase equality between the sectors, improve the sensitive relations between the different population segments, reduce the alienation between Jews and Arabs, and improve personal security and public order. The strategic opportunity inherent in the full realization of the program justifies full, unconditional support for it, the incorporation of the Arab leadership into its implementation, and the government’s firm commitment to it.