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Somehow, certainly with the help of its common faith, Israel has managed to turn its varied population into a strong nation. There are still ghettos in Jerusalem, and the slums of Tel Aviv are filled with the stucco huts of North Africa. There is discrimination against the dark North African and Yemeni Jews. But government housing projects have been purposely filled with Jews of different nations, with varying success. And compulsory education has forced immigrating Jews to learn to read, write and speak the language of their common heritage: Hebrew.
Israel constantly points to the fact that 261,000 Arabs still live peacefully within its borders. By Israeli lights, they are treated well. Arabic is the nation's second official language, and the government subsidizes 120 mosques and 200 Moslem religious leaders. All Arabs over 18 can vote (Israel was the first state to allow Arab women to vote) and form their own political parties; six Arabs are members of the Knesset (parliament). Nonetheless, Israel's Arabs are unmistakably second-class citizens. They are discriminated against in employment and are segregated into Arab villages and quarters. Until last year, their settlements were under military governments, and Arabs had to obtain special permission to travel. Premier Eshkol has relaxed the rules considerably, but Israeli police still consider the Arabs a potential fifth column, keep a thorough vigil on all Arab communities to prevent their use by terrorist infiltrators.
Full Skid. For 17 years, Israel lived in the heady climate of hopes come true, prophesies fulfilled and glory reconfirmed, despite the vengeful hostility of its Arab neighbors. But the pace could not last forever. In 1965, Israel's economy began to slow down. In part, the deceleration was due to a concerted government effort to stop inflation—which had reached 10% a year. In part, it reflected a decrease in income from abroad: West Germany had finished its reparations payments, U.S. aid had fallen off, and Zionist fund-raising organizations were finding it harder and harder to pry donations out of Jewish communities abroad. But the economic slowdown was also a direct product of something more serious: the immigrants had stopped coming. The number of arriving Jews fell from 239,424 in 1949 to 31,600 in 1965—and dropped again to 12,000 last year.
The economic downturn quickly developed into a full skid. Construction fell 40%. Credit was tightened. The government, which completed two major development projects early last year, refused to begin new ones. Existing industries maintained their production lines, but few new ones were started, and the gross national product, after more than a decade of spectacular gains, rose last year by only 1.6%—not even enough to match the population growth. By the end of the year, in a land where the word unemployment had seldom been heard, 100,000 workers—more than 10% of the labor force—were looking for jobs.