According to a report in Haaretz, the Organization for Economic Cooperation and Development (OECD) ordered Israel on Tuesday to stop subsidizing yeshiva students while increasing money for Arab schools.
The OECD analysis comes in response to actions taken by Israel’s finance minister, Betzalel Smotrich, to raise funding for the Charedi yeshivot while postponing and cutting the budgets for development and education for the Arab sector.
The OECD study offers specific recommendations for each member nation as well as general advice on how to achieve optimum growth. Charedim and Arabs are underrepresented in the high-tech industry, according to the group, and their employment rates, as well as the range of their working hours and pay, are low.
The OECD advocated removing yeshiva subsidies and tying the provision of day care services to employment participation in order to address this problem, as had been stated by the previous finance minister, Avigdor Liberman.
Israeli economists have expressed concern that Netanyahu’s move to raise yeshiva student stipends while giving out significant subsidies to charedi institutions that do not cover the core curriculum will speed Israel’s descent into a Third World nation.
The OECD also suggested increasing the budgets of Arab local governments and educational institutions in order to increase their involvement in the labor force.
Smotrich made the decision to freeze municipal budgets for Arab towns in July, referring to the support of local governments under the previous administration as “a bribe” from Arab MK Mansour Abbas.
Prime Minister Benjamin Netanyahu and Interior Minister Moshe Arbel have pleaded with Smotrich to reverse his decision to block the cash.
The OECD said on Tuesday that Israel was becoming a dual-track economy, with the hi-tech industry on the one hand and everyone else on the other, with the majority of economic gains coming from the use of technology and employees in other industries falling behind.
The group also condemned Israel’s gender disparity and urged Israel to lower import restrictions.
According to data released by the OECD in August, Israel’s price levels were 38 percent higher than those of the rest of the OECD. Israel’s cost of living started to increase significantly in 2009, while price levels were still comparable to those in other OECD nations.
Following his first term in government in the 1990s, Netanyahu was elected to his second term in office that year.
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