Crisis Spurs Migration to Israel
By SARA TOTH STUB of the Wall Street Journal
JERUSALEM -- Immigration into Israel and the Palestinian West Bank is surging after the financial crisis and economic downturn evaporated jobs elsewhere.
After years of a brain drain from the region, and despite the lack of a peace settlement, by the end of this month about 4,000 North American Jews will have immigrated to Israel this year, an increase of 33% over 2008 and the most in one year since 1973, according to Nefesh B'Nefesh, an organization that oversees and assists with immigration to Israel from North America.
Immigrants to Israel often have a longstanding desire to move, but the economic crisis has pushed them to make the jump this year, said Danny Oberman, executive vice president of Israel operations for Nefesh B'Nefesh. "The economy has a lot to do with it," Mr. Oberman said.
The crisis is also having an impact on the West Bank, which is seeing the return of hundreds of Palestinians, mostly from the Persian Gulf, looking for work as the economy there sours. The West Bank economy -- separate from Israel's -- is expected to grow 5% in 2009.
No official figures are available yet for how many Palestinians have made the move, but the International Monetary Fund is planning to study the issue over the next month.
"The economic crisis worked to our advantage," said Bashar al-Masry, a Palestinian real-estate developer overseeing an $800 million project to build a new Palestinian city north of Ramallah. "We're seeing more and more people willing to come back."
Amjad Sandoka, 36 years old, a civil engineer from Jerusalem, said he went to work in Dubai seven years ago, but came back in October and found a job in Ramallah. He took a job in the West Bank because he figured he would likely lose his Dubai post, after watching hundreds of people around him being let go.
"I started to feel the crisis there; on the other hand, I heard there was lots of work in the West Bank," Mr. Sandoka said.
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Israel's economy, fueled mainly by the software, biomedical, weapons-manufacturing and diamond sectors, has grown at least 4% a year from 2004 to 2008. And Israel has a lower unemployment rate than the U.S., at 7.8%, according to the Central Bureau of Statistics, next to 10.2% in October in the U.S. The Bank of Israel has raised interest rates twice since August, to its current level of 1%, at a time when banks around the world are cutting rates or leaving them low.
Israel also has almost no exposure to Dubai debt because the Arab League boycott prevents Israelis from investing there. That boycott also lessens the impact the Dubai crisis might normally have had on Israeli exports.
Palestinian Minister of National Economy Hassan Abu-Libdeh cautions that the Palestinian economy might ultimately suffer from the downturn in Dubai, because many Palestinian families rely on remittances sent from relatives working there. Oussama Kanaan, IMF representative in the West Bank and Gaza, said Palestinian remittances made up 10% of Palestinian gross domestic product in 2008. Income from Palestinians working in Israel makes up an additional 12% of Palestinian GDP.
Any impact of lower remittances would most likely be softened if those workers find work in the West Bank. With a building boom under way in Ramallah and other Palestinian cities, fueled partly by international aid money totaling $1.7 billion in 2008, many returning from Dubai are finding jobs.
In Israel, North American immigrants are making significant contributions to the economy, according to a recent study by consulting firm Deloitte Information Technologies Israel Ltd. U.S. immigrants who came between 2002 and 2008 have contributed directly 989 million shekels ($262 million) to the Israeli economy, the study said.
Zumi Brody immigrated to Israel with his wife and four young children in August. Mr. Brody, a vice president of a bank, said he had to sell his home in St. Louis for less than what he paid for it to make the move, but paying at least $10,000 per child to attend Jewish day school would have been burdensome. In Israel, his children can attend a state-funded school and still learn Hebrew and Jewish studies.
The increase in immigration from America also shows a change in the image and economy of Israel. The country is in the process of entering the Organization for Economic Cooperation and Development and has been upgraded from a developing to a developed economy, said Glenn Yago, an economist at the Milken Institute in Jerusalem.
This wave of American immigration suggests that Israel is shifting "from its primary, historical role as a refuge of last resort to a human- and financial-capital destination of first resort," Mr. Yago said.
Separately, on Wednesday, Israeli police arrested the mayor of a West Bank Jewish settlement after protesters blocked security forces from entering the community to enforce a construction freeze, the Associated Press reported. The showdown was the most serious incident of settler unrest since Prime Minister Benjamin Netanyahu last week announced the 10-month building freeze, which bars the construction of new homes in West Bank settlements.