The occupation of the Palestinian territories is exacting a high price from Israel, a local think-tank said.
"The prolonged conflict with the Palestinians is a millstone around Israel’s neck," the Tel Aviv-based Adva, a social justice NGO, said in a 4 June report, The cost of the occupation.
Israel’s poor carry much of the burden as inequality within the country grows. The percentage of families considered poor has doubled since the 1970s, the report said, noting this was due to the conflict and partially the result of immigrants from Ethiopia and the former Soviet Union being unable to integrate in Israeli society.
Government spending cuts in recent years have targeted social services. "[From] 2001 through 2005, child allowances were cut by 45 percent, unemployment compensation by 47 percent, and income maintenance by 25 percent," causing increased suffering for the poorest.
While generally seen as an economic powerhouse with a growing economy, Adva said Israel was actually lagging behind other countries. In the last decade, Israel’s economy grew by 43 percent compared to the world average of 67 percent. The US and Western Europe’s economies grew by 68 percent, the Gulf nations saw theirs expand by 174 percent, and China topped 193 percent.
Israel is also falling behind neighbouring countries such as Egypt and Jordan in terms of tourism.
"We live in denial of the price. We act as if there is no cost to the continuation of the Israeli-Palestinian conflict and must realise there is a heavy one," Shlomo Swirski, the academic director of Adva told IRIN.
The NGO pointed out that the building of the barrier in the West Bank, which Israel says it needs for security reasons, is estimated to have cost 13 billion shekels (nearly US$3.9 billion).
More generally, the increases in the military budget amounted to 36 billion shekels (US$10.7 billion) between 1989 and 2008, Adva estimated, which is "more than the total spending for elementary, secondary and tertiary education in Israel in 2008".
The total amount spent on running the occupation is much higher, but cannot be calculated "because most of the budget books about defence expenditures are secret".