Israel’s current social challenges are as big a threat to its long-term viability as a nation as any of the security threats that it currently deals with, said Galit Sagie, the director of Planning and Development at the JDC-Israel. Her comments came during a session Monday on the rich/poor divide in the country, at the Jewish Federations of North America’s 2013 General Assembly in Jerusalem.

“If you turn on the news in Israel, the main topic that everybody is talking about right now is Iran, and if it wasn’t Iran, then it’s Syria, and if it’s not Syria, then it’s the Hezbollah and the Palestinian situation,” she added. “In no way am I belittling the security issues that Israel is facing today, but I want to say that that’s not what keeps me up at night.”

Prof. Dan Ben-David of the Taub Center for Social Policy Studies in Israel, who also spoke at the session, presented data extracted from the center’s forthcoming State of the Nation Report 2013, which was released last month.

One of the most important problems the Israeli economy displays, according to Ben- David, is the populations’ low productivity level, meaning the amount that a person produces on average in an hour of work.

While Israel is increasingly lagging behind in productivity for the past 40 years compared to other developed countries, he pointed out that it does have the necessary conditions not to.

“We’re at least as innovative as the G7 countries, we have universities at least as good as these countries, our medical center is at least as good if not better and our living standard should be way above if not the same,” he said.

The reason for the problem, he explained comes from the fact that “there are two countries in one in Israel.”

“One country is a start up nation. It’s fantastic, it’s cutting edge,” he told the audience.

“But there is another country within Israel and that other country is not receiving either the tools or the conditions to work in a modern economy.

“That other part of Israel is huge but not only is it huge, its share in the total is getting bigger,” he said. “And if our productivity is such that we cannot be producing a Western levels, we’re not going to be competing on Western salaries either.”

Ben-David stressed the importance of education to remedy to the issue and said that one of the important things requiring improvement is haredi education, which he said is “among the worst in the world when it comes to the core needs of a modern economy.”

“Whether we like it or not, the less educated you are, the less chances you are going to have of finding a job, not just in Israel, in every Western country,” he added.

In showing other figures from his research, Ben-David also revealed that Israel’s tax and welfare systems are ineffective in reducing poverty in the country and that Israel is the country experiencing the greatest academic brain drain to the United States.

As far as solutions for the poverty issue, he expressed his belief that it requires a shift in national priorities focusing on elements such as increasing incentives to work and to employ and providing tools and conditions to do so, such as second chance programs for completing high school and college, vocational training coordinated with needs of the private sector and job placement.

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