Israel’s capital is badly run and out of cash

Poor but holy


EARLIER this year residents of Jerusalem woke up to find piles of rubbish strewn across roads, markets and other public spaces. Municipal workers striking against job cuts announced by the city had not simply stopped collecting refuse; they dumped lorry-loads of it.

Jerusalem has attracted a lot of attention since President Donald Trump announced in December that America would recognise it as Israel’s capital and move its embassy there. Yet for all the fuss over the holy city’s international status, its management and finances are a mess. Its streets are often filthy (even when city workers are not striking) and its pavements are crumbling—visible indicators that it spends a quarter less per person on services for residents than Israel’s other large cities.

Over the past four years the central government has tripled its grants to Jerusalem. This year it proposes to give the city 800m shekels ($233m)—14% of its operating budget. But its mayor, Nir Barkat, wants 1bn shekels.

The mayor’s critics say that his administration is bloated by cronyism. He has failed to put Jerusalem’s finances on a sound footing. Tax collection, already lax in ultra-Orthodox and Palestinian neighbourhoods, has not increased in six years. Although other local authorities in Israel receive grants to balance their books, Jerusalem gets four times more than its share according to a formula based on population and wealth.

To be sure, Jerusalem has structural problems that cannot be blamed on the mayor. It is divided principally between the Palestinians, who live in cramped and run-down neighbourhoods in the east (and get shoddier services), and the ultra-Orthodox, many of whom live off benefits and study the Torah instead of working. These communities make up two-thirds of the city’s 900,000 residents, and most of its poor.

The Jerusalem Institute for Policy Research reckons that 56% of children in Jerusalem are below the national poverty line, compared with 31% nationally; among Palestinians in Jerusalem the figure is 86%.

Israel calls Jerusalem its “eternal and undivided capital”. But nine years under Mr Barkat have left it broke and its people divided, hardly a desirable record for a politician who wants to stand for leader of the ruling Likud party.

January 21, 2018 | 4 Comments »

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  1. @ Cathy:

    Arabs living in E Jerusalem are not citizens but are permanent residents they can vote in municipal elections but not national elections. They can vote in all Palestinian elections. Most avoid paying municipal taxes and there are some 400K Arabs in Jerusalem’s municipality including 2 refugee camps and small villages…. Jerusalem is the largest city in land and population in Israel… Arabs plus Ultra orthodox, plus a large poor elderly population plus many christian churches and property that refuse to pay taxes make Jerusalem a poor city almost impossible to administer even without endemic corruption.

  2. @ leonkushner:
    Don’t believe everything the Economist says. Personally I haven’t seen the streets that bad. The writer, who isn’t mentioned, erred in calling the Arabs in East Jerusalem “Palestinians”. The eastern part of the city was annexed after the 1967 unification of the city within Israel, so the residents should be citizens. The media hasn’t been truthful about Jerusalem’s status. I presume the UN didn’t recognize the annexation and that is the reason for the confusion and errors made about the city. The taxes must be paid though, by everyone. Why should the Haredim and the arabs get off free? That is discrimination against the honest residents. It’s time to get tough on the irresponsible ones and enforce the laws equally. The corruption in Israel, not just Jerusalem, is terrible. The article says the Arab and Haredi neighborhoods are not serviced well. Well, what do they expect as free loaders? If they want clean streets, they can pay for them.

  3. It’s inhabitants (not all but most) either do not pay any taxes or don’t cover their fair share. If Jerusalem was not the important, holy city that it is, I wouldn’t care too much about it’s financial woes. But since it is, we must and therefore Israeli’s elsewhere and Jews everywhere should contribute towards its well being. If there is corruption it must be stopped immediately. Those who don’t pay should live in rougher conditions unless they have a legitimate reason for not doing so. I wouldn’t put too much blame on Barkat. It must be the most difficult city in the world to manage.