Application of Sovereignty –an Economic Bonus


The application of Israeli sovereignty over Judea and Samaria carries enormous economic implications, to which both the Left and the Right can relate. Economist Eran Bar-Tal presents the initial conclusions of his comprehensive research.

The application of de facto Israeli sovereignty over Judea and Samaria presents many complex challenges, but the economic challenge that many cite, together with the demographic, as one of the greatest, is more of a bonus than a challenge.

Apparently, it is not easy to find an answer to questions such as “Where will the necessary resources come from to build a decent quality of life for the Arab residents in Judea and Samaria?” because clearly, if Israel takes official responsibility for all of those residents, Israel will have to build hospitals, schools, pave roads and supply the rest of the infrastructures that are there now, but only partially and in a run-down condition.

Before we answer this question we should ask ourselves how much we care that, until now, all of those infrastructures are in poor condition. Do the Left and the Arabs have a more suitable answer for all of those Arabs who have been waiting for a decision on these matters for 46 years? Clearly not. If it is up to them, the Arabs of Judea and Samaria would continue making do with their lower quality of life for the next several decades as well, and the Jews of Judea and Samaria are even less interesting for them.

But the impermanent life in this beautiful part of the Land is far from a heavenly edict. In work that students of Accounting and Economics from the organization “National Vision” prepared under my supervision, they divided the territories of Judea and Samaria into small units of land and traced the market value of this land in contemporary terms.

From this work it seems that most of the territories of Judea and Samaria are areas where land is in high demand in the country – whether in the western part between Hadera and Gedera or the eastern part, near Jerusalem and its environs. If, in the past, a western community such as Ariel was considered desirable, then today communities east of it are valued even higher. Thus, for example, in the community of Revava the value of the land stands at approximately 2.5 million shekels per dunam (approximately ¼ acre of land).

In Ariel the value of the land stands at approximately 300,000 shekels per dunam, in Alfei Menashe 670,000 shekels per dunam and in Sha’arei Tikva at 3.3 million shekels per dunam. In communities such as Giv’at Ze’ev the value of a dunam of land stands at about 2 million shekels on average and in Efrat at about 1.3 million shekels per dunam on average. These prices are correct for the year 2014, as Judea and Samaria is considered an area whose status is unclear and many Israelis hesitate to live there. Clearly, application of sovereignty will mark a new future and will cause the value to rise steeply.

There are building reserves in all of Judea and Samaria and these reserves represent a lot of money, but the state does not take advantage of this.

But even if not, in today’s terms, unfreezing the building and opening the market for building, according to ordinary demand, will bring tens of billions of shekels into the state’s coffers! In each one of the tens of communities that exist, there are thousands of dunams of reserve of land for building – and this is even before we build new communities. In simple terms, there is big money lying on the ground waiting for someone to redeem it, yet the state refuses to collect it. It is really like that.

The prices we checked in the aforementioned work relate to dunams of land for the building of houses. But of course the numbers are much greater when we talk about an urban building scheme that includes a different sort of layout – such as buildings and industrial and commercial areas. And in any case, the source of money for the state’s coffers is not only from the sale of land – it will stem from investment of the new residents in development and the leverage caused by acquisition of apartments and buildings there. Real estate is an important engine of growth for any market, since the owners of the assets raise money from mortgages (future funds) and actually commit to creating income. Also, when they create the income, many of them mortgage their homes in order to raise new money for real investment and capital investment. This is how economies develop in the world.

The World Bank has discovered the primary reason for lack of development in failed states stems from the problem of land registration. In places where the real estate is not registered in the name of the residents, they cannot take out mortgages and loans, they cannot leverage their investments, they do not have the motivation to improve it and they cannot trade their assets. This, more or less, describes the situation of the Arabs of Judea and Samaria in recent decades but it does not have to continue this way.

If we do not deal with the distress of the Arabs in Judea and Samaria as sovereigns, this distress will spill over to us.

Application of sovereignty has many additional ramifications from an economic point of view. It should catapult the Israeli economy and also enable it to contend with the challenges of improving quality of life for the Arab residents of Judea and Samaria. I believe that this is a worthy goal, because only if we understand that application of sovereignty is a good step for every side and we aim toward that, will this process be possible and yield fruit. We have no interest in being responsible for the poverty and distress of the Arabs in Judea and Samaria and there is no ethical justification for this. As long as we don’t apply sovereignty over this piece of land we are actually behaving as occupiers. Only the application of sovereignty will end the ‘occupation’, because no other solution is practical and will put an end to the distress of the Arabs of the area and it cannot be that their distress will remain only in their area and not spill over to our doorstep.

The economic aspect of applying Israeli sovereignty over Judea and Samaria requires an unbiased look – what economists call the “aggregate value” to everyone involved in the matter. After 46 years of hesitancy the time has come for us to recognize the neglect – the wait that has become criminal negligence – and take responsibility for the land and for the people who live in it.

Instinctively, we look at how any of the choices will benefit us, just as the Arabs look for the maximum benefit that would accrue from any choice or concession. However, in the meanwhile, for 46 years both sides have been losing. The territories of Judea and Samaria comprise about one fourth of the territory of Israel now recognized by law. Most of the territories of Judea and Samaria are located between Hadera and Gedera – an area in maximum demand for land in Israel. But the status of these lands is undetermined and waiting for a decision that never comes and will not come in the normal course of affairs. Meanwhile, the cost of indecision is expressed in not exploiting the valuable land and, effectively, harming the local residents – and not only them.

For historical reasons, as is the case in the Middle East, we have developed a conceptual fixation in the matter of Judea and Samaria, which has brought us to think that we must decide amongst ourselves if Judea and Samaria is part of the territory of the State of Israel or not. The Left has taken the position of the Arabs according to which a new state must be established in this area that never existed before. The Left has succeeded in introducing terminology, according to which, many in the world, and even many in Israel, believe that this area was conquered from that state that never existed and therefore, supposedly, Israel has no ethical right to apply sovereignty over this area.

The Right, on the other hand, in general, of course, sees this area as part of the historical State of Israel, connected to ancestral birthright, and so forth. This argument has deep roots that draw from various concepts of nationalism, religion and the People. And therefore, it is not about to be decided even in the next 46 years.

It is not only the residents of Israel who are “bothered” by this matter, but the Arab world in general and perhaps even the entire world, yet those who are truly suffering from the situation are the Arabs and the Jews who live there. The Arabs are sentenced to severe poverty even though they are in demand as workers who build the Land – for industry, building and agriculture. Both sides lose capital from the loss of value of the land, from the lack of workers on one side and unemployment on the other.

strong>The Right and the Left can be unified in striving toward sovereignty that will benefit the residents, Jews and Arabs.

Israel is the only state that can take responsibility for the land and the residents and improve their situation.

Throughout the world, countries have managed to create various solutions that we don’t even think about. For example, the strip of land in northern Europe – Lapland – 3 states took responsibility for the residents and the lands and decided as part of the creative solution to grant 3 different citizenships to every resident. Isn’t this problematic? Of course, but this is reality. The time has come for us to say that we’ve had enough of searching for perfect and hermetic solutions which would leave no question marks. The time has come for us to understand the price the entire State of Israel pays for the lack of decisiveness.

If we look at the issue purely from an economic point of view, we will understand that we are obligated by the reality to apply sovereignty – it is the only solution that will grant a better quality of life to the Arabs and the Jews alike. The application of sovereignty must be done with consideration and respect for the residents there. The concept, if it exists, that a low quality of life for the Arabs will convince them to find better alternatives from among the Arab countries, especially Jordan, does not stand the test of reality.

Even if we tried to do such an inhumane thing, we could not compete with the evil of the Arab states’ regimes and therefore this possibility does not really exist. After all, Israel’s determined stance will slowly bring about the recognition that “the eternity of Israel is not false” and no diplomatic and political wind will move us from here.

The Arabs of the area will be able to integrate into the life of the country and live well, if only they would recognize the fact that it is a Jewish state. If national identity is more important to any one of them, he would need to find a different country, just as Jews in the countries of the world do not aspire to establish a Jewish state within the United States, Canada, or any other place and it is only possible to experience Jewish life fully in the State of Israel.

Published by Women in Green and the Forum for Sovereignty

Editor-in-chief and interviews: Shimon Cohen; Editorial board:  Yehudit Katsover, Nadia Matar

Translation from the original Hebrew journal: Sally Zahav; English Language Editor: Lisa Melamed

Design and concept: Studio Good; Graphic design: Eli Weissberg; Production: Efrat Itzuvim

Responses:; fax: 972-2-930-9148;;

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May 19, 2014 | 1 Comment »

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  1. The disengagement from Gaza should have taught something namely that the last thing the muslims care is economic infra/supra-structure. Applying unilateral israeli sovereignty in YeSha, which is IMHO the right thing to do, has to be tested in context of the tenets of islam and the reaction of Dar-al-islam which is in a permanent state of war with Dar-el-Harb, to such a move. Anything else is of secondary importance.