Prime Minister’s Office

The Authority for the Economic Development of the Minorities Sector: Strategy for Economic Integration Aiman Saif Managing Director Prime Minister’s Office

One Nation, Two Economies • 20% of the population, but only 8% of the GDP • GDP per capita of $8000, compared with $19,000 in the economy (2006). • Average gross income of Arab households amounted to approximately NIS 7,590, only ≈57% of that in Jewish households • The rate of participation in the labor force by women is approximately 22% compared with 76% among Jewish women (aged 18-65) • Traditional industry (primarily privately- and family-owned)

Lack of local economic infrastructure Lower level of education Residence in peripheral areas Lack of supporting financial bodies Lack of knowledge/trust in government institutions Discrimination: both on the governmental and business levels Traditional society and gender-based division of labor Untapped talents and education Increased awareness of issues related to integration in the labor market Demand for skilled workers in the economy Increase in consumer power with the increase in the standard of living Obstacles to and Potential for Economic Development Obstacles Potential

Trends • Over the past several years it seems that several of the elements needed to ensure a more efficient economic integration of the Arab population in the economy are taking form. • Internal changes: • Rapid increase in the average education level of the labor force • Improvement in the rate of participation by women in the labor force • Changes in the employment structure (decrease in agriculture, increase in industry, increase in rate of professional workers) • Increased awareness of integration into the labor market (result of various budget cuts and toughening of criteria for unemployment, etc.)

Trends • External changes: Government activity • Governmental recognition of socio-economic gaps between the Arab and Jewish populations • The Arab population as an integral part of national plans (at risk children and teens, the program to strengthen the North, building classrooms, “A New Horizon”, targeted plan to invest in sewage infrastructures, etc.) • Inclusion of all Arab villages in National Priority Area A • Creation of government tools to decrease the risk taken by investors (employment track, subsidized professional training, investment in R&D, etc.)

Trends • Government activity • Building infrastructure for industry • Approval of local planning programs • Proper representation of the Arab population in the Civil Service • Emphasis on investing in the Arab population (together with the ultra-Orthodox population) in the framework of the Government’s Socio-Economic Agenda

What is the purpose of the Authority? • To emphasize economic development as a leading policy • To expand the dialogue, integrate business and social-civilian factors • To deal with obstacles and improve accessibility • “The goal of the Authority is to fully exhaust the economic potential of the Arab population by encouraging production- and business-based economic activity in Arab communities and by increasing their integration in the broader national economy.”

Mode of Operation Methodology: examination of the current situation, research and formulating a model Intensifying the activity of government offices The Authority is staffed by economists The authority of law Advisory Council

Targeted groups

The Authority’s Role in the Governmental Field • Cooperation of the Authority in formulating Government Resolutions with an economic character vis-à-vis the minority sector (including the State Budget) • The obligation to consult with the Authority with regard to its spheres of operation • Integrating the Authority in work teams (to be established in accordance with Government Resolutions) on economic issues relating to the sector • Making tools for government assistance accessible • Submitting a report to the Government annually regarding socio-economic gaps and government activity to reduce the gaps vis-à-vis the Jewish sector

Central Activities Being Implemented • Establishment of a private investment fund for the Arab sector • Advancement of legislation • Plan for employing Arab women • Advancement of employment of academics – with the cooperation of “Kav Mashve” • Survey of positions of Jewish and Arab businesspeople • Making government tools more accessible – advancement of activities in cooperation with the Investment Center and the Chief Scientist • Establishment of a unique website which will serve as a business meeting place between investors from both sectors seeking business opportunities (similar to the initiative of the Businesses Authority)

The Authority’s Status • Budget • The Authority’s budget for 2008 is NIS 80 million • The Authority will be funded through a separate budgetary clause and field of operation beginning in 2009 • Employees • The Managing Director of the Authority was selected by a locating committee and approved by the Government on August 17, 2008 • Two public tenders were published • The remainder of the personnel will be hired by the middle of November

Prime Minister’s Office