No alternative to integration

Without the integration of the Haredim and the Arabs into the economy, the state will have difficulty sustaining itself over time. The government must make dealing with these two communities one of its top priorities.

The socioeconomic strategy planning staff in the Prime Minister’s Office began its work about half a year ago, and this past week the cabinet received its first report: a comprehensive socioeconomic analysis and forecast that surveyed the challenges facing the Israeli economy through 2050.

In a well-run country, long-term planning is an integral part of the government’s work. In Israel, even the Brodet Report, which outlined the defense budget for a period of 10 years, was considered a breakthrough.

Haredim strolling the streets of Bnei Brak. Will they bear the burden, too?

Planning for the coming decades is thus a welcome process, on condition that governments actually adhere to the principles set out in the strategic plan. It would behoove the government to do so, since the forecast it received was rather gloomy. According to the projection, Israel is at risk of socioeconomic collapse unless it takes some meaningful steps.

The report shows that the decades in which Israel conducted itself without any long-term planning will take its toll as soon as next year: Beginning in 2014 Israel will sink into a structural budget deficit that will begin at 3 percent annually and expand within two decades to a huge 10 percent. A structural deficit refers to a situation in which the government spends more than it takes in, not as a result of transient factors but rather the entrenched integral characteristics of the economy. A 10 percent structural deficit, which is impossible to overcome, means economic collapse.