Economists say Israel must act to address a growing divide between its communities that is dragging on its $300 bln economy. David Pollard reports.
At the Maoz Hatorah All-Boys School, the three Rs - reading, writing and arithmetic - come second to a very big S. Study - of religious texts. As young ultra-Orthodox Jews in Israel, many destined to devote themselves to a life of learning. Just like Chaim. (SOUNDBITE) (English) CHAIM RACHMANI, A GRADUATE FROM THE MAOZ HATORAH BOYS SCHOOL, SAYING: "I intend all of my life until the end only to sit down and learn and I do it because I love it. I won't do something that I don't love, if something I don't love, I go and I find something else...". Chaim has no plans to work. Nor do many of an ultra-Orthodox community that's forecast to become a third of the population by 2065. And they're not the only ones lon the other side of a hidden economic divide. Israel's Arabs make up another fifth of the population. Father of ten, Salma, is one of quarter of a million Bedouins. (SOUNDBITE) (Hebrew) SALMA EL ATRASH, A FATHER OF 10 FROM EL-ATRASH, SAYING: "We are at the bottom of the economic ladder in Israel. The most impoverished villages in Israel are the Bedouin villages and the state does not care about the Bedouin community. It does not invest in education, industry, unemployment, not in health nor infrastructure". Economists call it a critical juncture. Israel at danger of becoming not one country, but two. (SOUNDBITE) (English) TEL AVIV UNIVERSITY ECONOMIST DAN BEN-DAVID, FOUNDER OF THE SHORESH INSTITUTION FOR SOCIOECONOMIC RESEARCH, SAYING: "One part of the country is a start up nation, the universities, the Hi Tech and so on. But then you have the other part that's not receiving the tools and conditions to work in a modern economy and it's like a drag, it's like a big weight pulling everything down." And with labour productivity dropping below that of most OECD countries, the economy is in need of urgent action. (SOUNDBITE) (English) TEL AVIV UNIVERSITY ECONOMIST DAN BEN-DAVID, FOUNDER OF THE SHORESH INSTITUTION FOR SOCIOECONOMIC RESEARCH, SAYING: "In a few years time, maybe a decade, maybe a little more than a decade, we're passed a point of no return and the trajectory that we're currently on is simply unsustainable. We need to get out act together". Or suffer, potentially, the deep and lasting consequences for a 300 billion dollar economy - and its people.