Uncovering the extortionate economic costs to the average Israeli of maintaining settlements in the West Bank

Jewish settlement in the West Bank and East Jerusalem is detrimental to the peace process.  Not only do settlements violate international law (as stated by numerous UN resolutions), but they also make a two state solution – the only viable option for peace – harder to arrive at due to the deepening Israeli infrastructure in the West Bank that make prospects for a future pullout all the more bleak.  Beyond the peace process though, what affect are the settlements having on the average Israeli, the majority of whom never visit, encounter or think about settlements on a day to day basis?  Research I helped carry out at the NGO IPCRI (Israel Palestine Center for Research and Information) in Jerusalem last year found that the economic costs to the average Israeli citizen are astronomical, vastly encroaching on the money invested in their own public services.

The cost of building settlements in the occupied territories is more than 60bn shekels, a study carried out by the Macro Center for Political Economics in 2010 concluded. The building of settlements, however, only scratches the surface of the settlements cost to the state.  Ynet estimated the yearly expense of maintaining control of settlements is 2.5bn shekels, this includes state subsidies for housing loans, discounts on the price of land, grants and tax breaks for industries and farms based in settlements, as well as the huge cost of security they require.

The majority of these costs are paid by the Israeli government through the state budget.  Most of this budget is funded with taxes that the government levies from the public.  Therefore, the Israeli taxpayer is ultimately paying for settlers to live where they do.  I wish to illustrate how this money, spent on maintaining settlements in the West Bank, could be put to better use within Israel in four key areas: poverty, education, health and security, that questions the logic of maintaining settlements for the average Israeli.

Poverty in Israel is a growing problem.  The National Insurance Institute in November 2010 found that one in four Israelis were now living in poverty, this is in stark contrast to one in every ten in the 1970s.  Moreover, the Central Bureau of Statistics world poverty league table ranked Israel as worse than any other county in the EU.  Consider the 1.5bn shekels settlers receive in tax relief (figure up until 2003) that could be invested in helping the most needy and vulnerable in society.

The Israeli Central Bureau of Statistics found that education is the main public service Israeli’s believe needs improving.  Adva found that public investment in education has shrunk in recent years; there have been cuts in the number of teaching hours allotted per pupil and the amount earmarked for the construction and refurbishing of classrooms and schools.  Instead of more money being spent on improving education in development towns and other deprived areas within Israel, the government has spent an extra 100 million shekels in education in the settlements including bonuses for teachers, high security expenses for isolated schools, classes opened for fewer pupils and free transportation for pupils.

The government spending on health is currently lower than 21 OECD countries, comprising 7.8% of the GDP in 2007, compared with the USA that was 16%.  Whilst cuts are being made to health, 1.75bn shekels are being spent in the settlements as medical staff receive benefits for operating in them and money is being spent on armored vehicles and guards to protect them.  This money could instead be spent on better health care provisions, including more clinics and better facilities for the elderly and vulnerable within Israel.

Lastly, security, often a justification for occupation, is in fact undermined by settlements.  Approximately 100bn to 120bn shekels, over the last four decades, comes out of the defence ministries budget to maintain settlements that are of no benefit to defence. For those Israeli’s genuinely concerned with the security of their state they are being robbed of money that could go towards tackling real, existential threats that instead are being used to support and protect families that are choosing to live in occupied land.  The majority of settlers are economic settlers, who live where they do as it’s cheaper and thus more affordable, yet they seem oblivious to the fact that it is cheaper only because the taxpayer is subsidizing them.

Settlers comprise just 3.93% of Israel’s population; yet they receive 17% of Israel’s budget.  This statistic is astonishing, the message is clear: settlements are hurting Israeli’s.