Israel's two tribes: which will Netanyahu choose?

Could the Israeli prime minister be tempted to turn away from the far right and look left? Unlikely but not impossible.

In his 2004 essay Contemplations on Peace, the left-wing Israeli novelist David Grossman said this about the "flare of identity" in Israel. "It reaches as far as the Green Line," he argued, but "no farther." Beyond, "the nature of the blaze changes: it either cools and melts away indifferently, alienated from what is occurring there, or becomes an exaggerated frenzy, among the settlers and the various messianic Jews."

Two tribes

The election campaign has proven Grossman’s assessment to be acute. For at its heart has been a radical disconnect between the tribe of the frenzy and the tribe of the indifference. The fateful choice facing Binyamin Netanyahu, the likely winner, on Wednesday morning will be which tribe he turns to when he forms his governing coalition.

Netanyahu could rule with those who feel the "exaggerated frenzy" on their pulses. A new annexationism is rising on the right and the story of the election so far has been the surge of Habayit Hayehudi (Jewish Home) and its leader Naftali Bennett. He proposes annexing ‘Area C’ of the West Bank, including all the settlements and their environs. On Bennett’s List is Rabbi Eli Ben Dahan, who motivated annexation on religious grounds. Likud itself is not only running a joint list with Lieberman's hard-right Israel Beytanu, but saw its own party primaries oust secular nationalists Dan Meridor and Benny Begin (who did damage control in the last Knesset when it came to anti-democratic legislative proposals) and boost Moshe Feiglin - a man who ran the violently anti-Oslo Zu Artzeinu (‘This is Our Land’) and now proposes paying Palestinians half a million dollars to leave the West Bank.

Could Netanyahu be tempted to turn away from all that and look left? Unlikely but not impossible.  

According to the Times of Israel editor David Horovitz, as "the right has become the far-right" then Netanyahu is now "a discordant relative moderate" and "the closest thing the Likud has to a political dove." Most importantly – this being the hard-headed calculation that might yet make Netanyahu look left for his partners – he is "a constrained figurehead." And if he wants to escape that constraint, he knows the stats: 82 per cent of the electorate say that the answer to the budget deficit is to defund settlements, while 43 per cent say economic issues are the most important to them, and they are mostly left-wing and centrist voters.

Unlikely may be the choice, unstable may be the resulting coalition, but Netanyahu committed himself to two states at Bar Ilan University in 2010 and he could decide that the danger of a drift to bi-nationalism is too great, the price of international isolation too costly, and his own position to hemmed in, to form a coalition with the right. He could decide to look instead, or as well, to the centre-left parties – Shelly Yachimovich’s Labour, Yair Lapid’s Yesh Atid, and Tzipi Livni’s Hatnua are likely to win 33-36 seats. He could decide to look ‘westwards’.

A coalition with the centre or centre-left parties, some of which now include leaders of the 2011 social protest movement, would include strains, to say the least. Of course on the peace process – Netanyahu has said he would not allow Livni to negotiate with the Palestinians. However, the real fights would be on the economy itself. 

Two economies

The Israeli economy offers a mixed picture: In 2010, Israel’s GDP was calculated at $220bn and, the USA aside, Israel has the largest number of start-up companies in the world, mostly in hi-tech. From 2009 to 2012, the Israeli economy grew by 14.7 per cent – that’s more than any other developed nation. The credit ratings agency, Savings and Poor, gave Israel an A+ rating in 2012 citing "consistent growth and careful macroeconomic management." The impact of an anticipated slowdown in 2013 is being offset somewhat by the expectation that Israel’s offshore gas finds will start to come on stream.

But the centre and centre-left parties would want to focus on widening social gaps, frayed public services, and the 20 per cent of the population that lives below the poverty line. Israel’s middle class feels like ‘frayers’ (Hebrew for ‘suckers’) – squeezed and neglected, increasingly angry about both the growing welfare stipend given to the ultra-Orthodox, and revolted by the ostentatious displays of wealth enjoyed by the super-rich. While the price of food in Israel is higher than in the UK, the median annual salary in Israel is around £12,000 compared to around £21,000 in the UK.

Amongst OECD countries, Israel ranks fifth out of 27 when it comes to income inequality. For a range of social, cultural and political reasons, Arabs and ultra-Orthodox Jews are the poorest sectors of Israeli society.

The issue which angers middle class swing voters, and which is therefore the one of most relevance to the election outcome, is the concentration of ownership of the economy in the hands of a few super-rich families, with the lack of adequate competition driving up prices, whilst wages in many sectors, including the public sector, remain low. A 2011 report found "the average wage of an Israeli worker was NIS 8,741 (some $2,300), and the minimum wage for full-time work was NIS 4,100. In contrast, the CEOs of the 100 largest companies received an average of around NIS 540,000 per month, 62 times the average wage and 132 times the minimum wage."

Doing anything about that inequality is unlikely, as the most immediate challenge for any coalition will be passing a budget as the economy slows and the outlook is for regional and global uncertainty.

Netanyahu is a fiscal conservative and is expected to try and tighten belts. The Finance Ministry announced last week that Israel’s budget deficit for 2012 was more than double the government’s target. Public debt is 74 per cent of GDP. Pay raises awarded to public-sector workers during the Netanyahu government – many of whom were previously so poorly paid as to qualify as low-income workers – amount to NIS 15-16 billion. (Most achieved by a militantly social-democratic Israeli trade union movement.) The social protest movement, since adopted by Labour, would oppose swingeing cuts and call for expanding the public purse with income tax increases for higher earners and businesses.

Another economic issue any coalition will have to agree on is a policy on so-called ‘burden-sharing’, i.e. the failure of the Haredim to contribute a fair share to the economy. This is a central campaign issue in particular for Yair Lapid’s Yesh Atid party. Ultra-Orthodox men are on the whole still not being drafted to the army, despite the law under which they were exempted having been made void by Israel’s Supreme Court, and continue to receive stipends to study in Yeshivot (religious seminaries). They are also not contributing in significant numbers to the work force. There was a 57 per cent growth in ultra-Orthodox elementary school enrolment between 2000 and 2010, yet their education, focused on religious study is simply not preparing students for the workforce.

The one socio-economic issue Netanyahu has made a clear stand on is the question of housing, the issue that triggered the social protest protests in 2011, when disgruntled tenant Daphni Leef pitched her famous tent in Rothschild Boulevard. Netanyahu committed to reforming the housing market and freeing up more land for construction at the beginning of his last term but house prices still rose steeply.

Interestingly, in the last few weeks Netanyahu has stated that he will keep the housing ministry in the hands of his own party, and not allow the ultra-Orthodox Shas party to keep control of it. Shas has been criticised for skewing housing assistance to its own constituents, the Haredim. Netanyahu’s commitment to wrestle the housing ministry away from Shas has sparked a harsh war of words between the parties. Could that be a glimpse of a dynamic that might yet produce a political realignment?

The editor of the Times of Israel has issued a "storm warning". "It’s the one in which an obdurate, sometimes insensitive right-wing Israeli leadership smashes into a confident, frequently wrong-headed and far more powerful American administration." He sees a long-shot alternative: "Perhaps if Lapid and Shelly and Tzipi (or two out of three) go in, they can replace the far-right and the ultra-orthodox partners."

Perhaps. But prepare for rain.

Israeli Prime Minister Benjamin Netanyahu chairs the weekly cabinet meeting at his Jerusalem office on January 20, 2013. Photograph: Getty Images.

Alan Johnson is the editor of Fathom: for a deeper understanding of Israel and the region and senior research fellow at the Britain Israel Communications and Research Centre (BICOM).

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Qatar is determined to stand up to its Gulf neighbours – but at what price?

The tensions date back to the maverick rule of Hamad bin Khalifa al-Thani.

For much of the two decades plus since Hamad bin Khalifa al-Thani deposed his father to become emir of Qatar, the tiny gas-rich emirate’s foreign policy has been built around two guiding principles: differentiating itself from its Gulf neighbours, particularly the regional Arab hegemon Saudi Arabia, and insulating itself from Saudi influence. Over the past two months, Hamad’s strategy has been put to the test. From a Qatari perspective it has paid off. But at what cost?

When Hamad became emir in 1995, he instantly ruffled feathers. He walked out of a meeting of the Gulf Cooperation Council (GCC) because, he believed, Saudi Arabia had jumped the queue to take on the council’s rotating presidency. Hamad also spurned the offer of mediation from the then-President of the United Arab Emirates (UAE) Sheikh Zayed bin Sultan al-Nahyan. This further angered his neighbours, who began making public overtures towards Khalifa, the deposed emir, who was soon in Abu Dhabi and promising a swift return to power in Doha. In 1996, Hamad accused Saudi Arabia, Bahrain and the UAE of sponsoring a coup attempt against Hamad, bringing GCC relations to a then-all-time low.

Read more: How to end the stand off in the Gulf

The spat was ultimately resolved, as were a series of border and territory disputes between Qatar, Bahrain and Saudi Arabia, but mistrust of Hamad - and vice versa - has lingered ever since. As crown prince, Hamad and his key ally Hamad bin Jassim al-Thani had pushed for Qatar to throw off what they saw as the yoke of Saudi dominance in the Gulf, in part by developing the country’s huge gas reserves and exporting liquefied gas on ships, rather than through pipelines that ran through neighbouring states. Doing so freed Qatar from the influence of the Organisation of Petroleum Exporting Countries, the Saudi-dominated oil cartel which sets oil output levels and tries to set oil market prices, but does not have a say on gas production. It also helped the country avoid entering into a mooted GCC-wide gas network that would have seen its neighbours control transport links or dictate the – likely low - price for its main natural resource.

Qatar has since become the richest per-capita country in the world. Hamad invested the windfall in soft power, building the Al Jazeera media network and spending freely in developing and conflict-afflicted countries. By developing its gas resources in joint venture with Western firms including the US’s Exxon Mobil and France’s Total, it has created important relationships with senior officials in those countries. Its decision to house a major US military base – the Al Udeid facility is the largest American base in the Middle East, and is crucial to US military efforts in Iraq, Syria and Afghanistan – Qatar has made itself an important partner to a major Western power. Turkey, a regional ally, has also built a military base in Qatar.

Hamad and Hamad bin Jassem also worked to place themselves as mediators in a range of conflicts in Sudan, Somalia and Yemen and beyond, and as a base for exiled dissidents. They sold Qatar as a promoter of dialogue and tolerance, although there is an open question as to whether this attitude extends to Qatar itself. The country, much like its neighbours, is still an absolute monarchy in which there is little in the way of real free speech or space for dissent. Qatar’s critics, meanwhile, argue that its claims to promote human rights and free speech really boil down to an attempt to empower the Muslim Brotherhood. Doha funded Muslim Brotherhood-linked groups during and after the Arab Spring uprisings of 2011, while Al Jazeera cheerleaded protest movements, much to the chagrin of Qatar's neighbours. They see the group as a powerful threat to their dynastic rule and argue that the Brotherhood is a “gateway drug” to jihadism. In 2013,  after Western allies became concerned that Qatar had inadvertently funded jihadist groups in Libya and Syria, Hamad was forced to step down in favour of his son Tamim. Soon, Tamim came under pressure from Qatar’s neighbours to rein in his father’s maverick policies.

Today, Qatar has a high degree of economic independence from its neighbours and powerful friends abroad. Officials in Doha reckon that this should be enough to stave off the advances of the “Quad” of countries – Bahrain, Egypt, Saudi Arabia and the UAE - that have been trying to isolate the emirate since June. They have been doing this by cutting off diplomatic and trade ties, and labelling Qatar a state sponsor of terror groups. For the Quad, the aim is to end what it sees as Qatar’s disruptive presence in the region. For officials in Doha, it is an attempt to impinge on the country’s sovereignty and turn Qatar into a vassal state. So far, the strategies put in place by Hamad to insure Qatar from regional pressure have paid off. But how long can this last?

Qatar’s Western allies are also Saudi Arabia and the UAE’s. Thus far, they have been paralysed by indecision over the standoff, and after failed mediation attempts have decided to leave the task of resolving what they see as a “family affair” to the Emir of Kuwait, Sabah al-Sabah. As long as the Quad limits itself to economic and diplomatic attacks, they are unlikely to pick a side. It is by no means clear they would side with Doha in a pinch (President Trump, in defiance of the US foreign policy establishment, has made his feelings clear on the issue). Although accusations that Qatar sponsors extremists are no more true than similar charges made against Saudi Arabia or Kuwait – sympathetic local populations and lax banking regulations tend to be the major issue – few Western politicians want to be seen backing an ally, that in turn many diplomats see as backing multiple horses.

Meanwhile, although Qatar is a rich country, the standoff is hurting its economy. Reuters reports that there are concerns that the country’s massive $300bn in foreign assets might not be as liquid as many assume. This means that although it has plenty of money abroad, it could face a cash crunch if the crisis rolls on.

Qatar might not like its neighbours, but it can’t simply cut itself off from the Gulf and float on to a new location. At some point, there will need to be a resolution. But with the Quad seemingly happy with the current status quo, and Hamad’s insurance policies paying off, a solution looks some way off.