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An analysis on the future of Israel, the Palestinians, and Israel's place in the region.


During the past decade, a very significant shift happened in the demography of the area. The Arab birth rate, in both the occupied territories and Israel proper, began shrinking significantly, while the Jewish birth rate began rising. Currently, Arab births are only slightly ahead of secular Jewish births, and the gap is closing.
However, religious Jewish births, especially among the Ultra-Orthodox (Haredim), are higher than Palestinian birth rates, and curiously enough, the number of diaspora Jews immigrating to Israel is close to the number of Palestinians emigrating from the West Bank annually (about 15,000-20,000 per year for both, though it varies). 
What this means is that the one thing the Palestinians had going for them - the assumption that they will be the majority, is about to be effectively nullified. The idea that Jews would be a minority between the Jordan and Mediterranean was actually one of the main arguments of the Israeli left.
Israel's acquiescence to a two-state solution and the 20 years of negotiation wasn't as much about peace as it was about demographics. Indeed, Ariel Sharon's disengagement from Gaza in 2005 was really an attempt to buy time by lessening the number of non-Jews under Israel's rule, to prevent them from becoming a majority. 
In addition, the number of Jewish emigrants from Israel has dropped (most Israelis who go abroad return after a few years), the the amount of returning Israelis has reached record numbers. Currently, about half of emigrants from Israel are Russian-speakers, the majority of whom are likely not Jewish, which will only make the Israeli right-wing happier.
Within just a few more years, Jewish population growth will outstrip Palestinian population growth. And immigration to Israel is set to rise as Israel's economic growth will likely skyrocket this decade, antisemitic incidents continue their steady rise, and Jewish-Zionist education across the West intensifies (attachment to Israel among American-Jewish youth is already rising). Israeli demographer Yoram Ettinger has forecasted that there is a potential for 500,000 immigrants this decade, and that Jews could wind up an 80% majority between the Jordan and Mediterranean by 2035.
What this means is that the most likely end to the Israeli-Palestinian conflict is a one-state solution of sorts. Israel annexing the West Bank and granting the Palestinians citizenship. But it will not be a binational state. Israel will remain an officially Jewish state, with an Arab minority too small to have significant political power.
Also, it is a fact that while secular births have risen and births among Haredim have dropped as more enter the workforce, the average religious family has more than the average secular family, meaning that the future of Israel is one of right-wing and ultra-nationalist governments. However, seculars and leftists will still be a significant force, because their birthrate is rising, while the Haredi birthrate has shrunk somewhat due to them entering the workforce. The country will never be a religious police-state, because the seculars will be very numerous, and religious figures such as Moshe Feiglin want religion and state separate. Just as Israel's first Prime Minister David Ben-Gurion, who led what was then an overwhelmingly secular country, worked out a compromise where the Haredim will be exempted from military service and some religious holidays will be publicly observed, a new compromise between a hardline right-wing religious majority and a left-wing minority will be reached. Israeli beaches will still have with bikini-clad women and driving on the Sabbath will not be a crime.
Meanwhile, Israel's economy over the next decade will grow, and GDP could reach $500 billion or more by 2020. This will partially be due to Haredim and the Arabs entering the workforce in increasing numbers, which will result in 15% economic growth. The Haredim are already making their way into the workforce, especially hi-tech, and the Israeli government is investing heavily to educate Arabs more, so their participation will also increase. 
Revenue from the gas fields will contribute heavily, as will US military aid cuts. US aid to Israel is likely to be gradually cut this decade. This will in turn stimulate Israel's domestic defense industries, which will not only reduce dependence on the United States, it will result in Israel becoming a more capable arms producer, and as a result, Israeli arms exports will grow. And Israel is making efforts to attract foreign investment. This in addition to the Israeli economy being already remarkably robust and growing steadily on its own, without all these factors coming into play just yet.
Also, the nature of Israel's foreign trade will change. Exports to the European Union, once the majority, are declining, and the United States is now the main destination. In addition, Israel's trade with China is rising, and we can expect Israeli exporters to exploit the advantages offered by growing eastern markets in this coming decade.
This new wealth will mean that Israel will be able to spend more on its military as a lesser percentage of GDP, which means a more powerful and effective Israel Defense Forces. And due to the growth of the defense industries, it will be less reliant on foreign suppliers (especially the US). Israel's robust birthrate (higher than in most Western countries) means that the country will have 10 million people by 2020, which obviously means a larger IDF as well. This, in combination with the IDF being one of the most hi-tech militaries in the world and Israel having the world's sixth-largest nuclear arsenal, will make the country an effective regional hegemon.
By contrast, economic growth in the Arab world has been stalled. No Arab country will have the economic resources to build a military force that can counter the IDF. The only military counterweight will be Turkey. Turkey will be ahead in numbers but behind technologically and in quality, meaning there will be some sort of match.
Israel is already in a strategically secure position. It has peace treaties with two of its neighbors, secret economic and security cooperation with other Arab countries, especially the Arab Gulf states like Qatar, which includes semi-friendly relations with Morocco, despite an official refusal to recognize it. There is no reason for this to change, but as Israel's economic power grows, economic links with the Arab world will likely deepen. Israel, already accepted as a fact by much of the Arab world, will have even less hostility to face.
By 2030, any historian will be able to look back and declare that the Zionist project, which began in the 1880s, has not only succeeded, but has exceeded the wildest dreams of Herzl and the early Jewish pioneers. A militarily and economically powerful Jewish state will exist between the Jordan and Mediterranean, home to a majority of the world's Jewish population (Israel will soon have more Jews than the rest of the world combined), accepted (even if in deeds, not in words) by most of the surrounding nations, and will be a safe place. There will still be issues. The Palestinian refugees, who will never return, will remain in their camps for the forseeable future until some kind of solution is found for them, Israel will still be heavily politically divided, but the country will have permanently secured it's place in the region.

Submitted: February 17, 2013

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