Is Israel Doomed?

Why even dangerous demographics and the receding horizon of peace won't dim the lights in Jerusalem.

Israel's future is grim. Internal and external challenges abound. And like Scrooge in Charles Dickens’s A Christmas Carol, Israel has been forewarned by both its friends and enemies of a dire fate if it doesn’t do more to change its ways.

The latest prophet of doom and gloom is the inestimable Yuval Diskin, former head of Israel's Shin Bet and a man who surely knows what he's talking about. In a widely circulated article last July in the Jerusalem Post and another on Ynet last week, Diskin argued that unless Israel reached an agreement with the Palestinians, he wrote, "we will certainly cross the point of no return, after which we will be left with one state from the river to the sea for two peoples. The consequences of such a state for our national identity, our security, our ability to maintain a worthy, democratic state, our moral fiber as a society, and our place in the family of nations will be far-reaching."

Others have made similar points. In the mid-1980s, author and activist Meron Benvenisti opined that it was almost already too late -- five minutes to midnight to use his notion, largely because of Israeli settlement activity. And Secretary of State John Kerry repeatedly talks about "last chances" for a two-state solution, a fate seemingly validated by scant progress made on his latest Middle East trip.

And yet the beaches of Tel Aviv are packed; the cafes and hotels full; and 2012 was the first year in 40 that not a single Israeli was killed in a terrorist attack emanating from the West Bank.

But don't be fooled, the doomsayers warn. Israel is living an illusion or existing on borrowed time, or both. It sits atop a volcano of internal contradictions and conflicts between religious and secular, rich and poor. It is a society that has become increasingly less democratic. It's lost its mission, mandate, and soul. An angry and aggrieved Arab world, a putative nuclear Iran, and a Palestinian challenge completes the Dorian Gray-like picture. If left unresolved, say the Chicken Littles, that latter issue will undermine what's left of Israel's internal cohesion, Jewish majority, and democratic character.

After all, remember the Crusader kingdoms -- powerful but short lived. Time is the ultimate arbiter of what endures. And time will indeed have the last word unless Israel sees the error of its ways and acts before it's too late.

This narrative -- like the Dickens tale itself -- assumes that if Israel, like Scrooge, makes the right choices, then a conflict-ending solution to the Palestinian issue and Israel's acceptance in the region can be assured. And then everyone will live -- more or less --happily ever after.

But there's another narrative too. That Israel, despite all the challenges it has confronted and the odds arrayed against it, has managed to cope, survive, and prosper. Political Zionism, this story goes, was always a defiance of history, and will continue to be. This narrative suggests that it's a cruel and unforgiving world when it comes to Israelis and Jews -- and a complex one, too. It posits the notion that there are no truly happy endings, only imperfect ones: That ending the conflict with the Palestinians will be hard if not impossible to do; that at best only a temporary solution to the Iranian nuclear issue can be found (and even that could lead to military confrontation); and that the Arab world -- far from turning into a land of functioning democracies -- will be filled with dysfunction and uncertainty for many years to come. So, while Israel's actions make a difference, solutions to all these problems may well prove elusive and imperfect, regardless of what Israel does or doesn't do.

So far from prophesying happy endings, this line of thinking holds out the possibility that what's in store for Israel is a difficult path of maneuver in a harsh world. But by no means is it a course that will lead to its ruin. Indeed, so far, even with all its failings and imperfections, the modern Israeli state has exceeded the expectations of its founders and managed to become one of the most dynamic nations in the international system.

So which narrative will prevail? Will Israel endure? That, I suppose, depends on your time horizon. Will the State of Israel be here in 2113 or in 2213? And what kind of state will it be?

Well, as John Maynard Keynes maintained, in the long run we'll all be dead. So here's a more realistic metric for you. Will the State of Israel celebrate its 100th Independence Day in 2048 -- a prosperous and secure state recognizable to those who live there today?

Three powerful factors offset the doomsayers' warnings. And they aren't reflective of a momentary snapshot. The trend lines have been deepening for some time now. They do not eliminate the bad news nor the challenges -- particularly the demographic ones -- ahead. But they do provide a powerful advantage in coping with them. I'd bet that Israel will live to see its 100th anniversary. And here's why.

Israeli Capacity

Whether you see Israel as a friend, enemy, or frenemy, it's hard not to accept the reality that what the country has done in 65 years, particularly given their internal and external challenges, is nothing short of extraordinary. Put aside for a nanosecond if you can Israel's policies toward the Palestinians -- and I know it's impossible for some to get beyond the occupation -- and just focus on Israel proper. For a tiny state, in a tough neighborhood, the accomplishments in the fields of science, technology, agriculture, economic development, art, literature, and music have been remarkable.

Consider these impressive accomplishments:

1. Israeli GDP per capita is $32,800, 44th in the world, and 29th overall if you exclude countries with populations below 100,000 (and count the European Union as separate states). Israel ranks just ahead of Saudi Arabia and New Zealand and behind South Korea and France.

2. Israel is the world leader in startups per capita (1 per 1,800 Israelis).

3. It's No. 3 in companies traded on NASDAQ after the United States and Canada (65 companies).

4. It's 17th in total number of Nobel laureates (with the 96th largest population)

5. Israel holds more patents per capita than any other country in the world.

6. Israel has the third-highest rate of entrepreneurship and highest rate among women and people over 55 in the world.

7. It is the only country that entered the 21st century with a net gain in the number of trees. (my personal favorite).

8. Israel leads the world in the number of scientists and technicians in the workforce, with 145 per 10,000 as opposed to 85 in the United States.

The point is not to trumpet Israel's accomplishments or to suggest they will cancel out the challenges Israel faces in the future. It's to drive home the obvious: this is a serious country both in relative and absolute terms. It's not going away. Indeed, as the Arab Spring threatens to redefine or at least decentralize the Sykes-Picot territorial map, an Arab state or two may well go the way of the dodo well before the Israelis do.

Arab Incapacity

An Arab friend once argued that Israel was a mirror for their region. And every time the Arabs looked into that mirror, they saw their own incapacity and weakness reflected in Israel's strength in military, economic, and technological power.

As Israel has chalked up accomplishments, the nations that surround it seem to grow weaker and more dysfunctional. And that's the case now more than ever in the wake of the Arab Spring. The so-called confrontation states that share contiguous borders with Israel have either made their peace with Israel (Egypt and Jordan) or grown fundamentally weaker (Syria). It's stunningly ironic that the threats to Israel today come from national movements lodged within the non-states -- Hamas and Hezbollah, or from a non-Arab state: Iran. Simply put, the Arab world has diminished in consequence as a serious military or technological threat to the Israeli state.

At the same time, the gap between Israel and Arabs on issues of trade, economy, innovation, and technology continues to grow. Read any U.N. Human Development Report on the Arab region to get a sense of the staggering asymmetries. Just consider these unhappy realities:

1. Middle Eastern companies are globally uncompetitive. The region as a whole makes up less than 1 percent of global non-fuel exports, versus 4 percent from Latin America, which has a similar population.

2. Red tape, poor infrastructure, and other non-tarriff barriers, add 10 percent to the value of shipped goods in the region. Shipping goods from the Middle East to America is cheaper and quicker than shipping between two Middle Eastern ports.

3. Foreign direct investment into 20 of the Arab League states (excluding Comoros and Syria) in 2012 totaled $47.1 billion. Israel alone attracted around $10 billion in 2012.

4. Transparency International's Corruption Perceptions Index -- which measures how much citizens perceive their leaders to be abusing power -- gave Israel a score of 60 (the best score was 90) in 2012. By comparison, the average score of Egypt, Jordan, Lebanon, Syria, Iraq, and Iran was 30.3.

5. A UNDP statistic that assesses the amount and duration of education citizens of given countries are expected to receive gave Arab states a .5 versus .7 for Latin American and Caribbean states. That's roughly the difference between expected education in Cambodia and Russia.

6. Reporters Without Borders' Press Freedom Index gives the Middle East and North Africa the worst rating of any region in the world. The regional average is equivalent to Pakistan, where 7 journalists have been killed for their reporting in 2013 alone.

7. The Middle East/North Africa region has a greater gap in employment by gender than any other region in the world. Employment is also unequal between age groups -- with youth unemployment above 25 percent. 

8. The adult literacy rate in Arab states in 2009 was 73.4 percent, compared to 93.3 percent in developing Latin American and Caribbean states.

None of this is to say the Arab Middle East cannot become more competitive or more integrated into the world economy. Or that its citizens cannot become more productive too. It's just that the trend lines, particularly in the wake of the turbulence sweeping the region, don't look good. And the gap with the Israel in just about every field is widening. If the hope and dream of Arab nationalists 50 years ago was to close that gap, to bring the formidable power of the Arab world to bear in the struggle with Israel with the goal of enhancing Arab state capacity and weakening Israel's, that project lies in ruins.

U.S. Support

That brings us to the third reason why the gloom-and-doom story or the "settle with the Palestinians or else" narrative loses some of its punch. With the possible exception of the 1973 war, at no point could you make the argument that American support was vital to Israel's immediate survival.

But it is critical to the long-term health, well-being, security, and prosperity of the Israeli state. From America's efforts to maintain Israel's qualitative military edge; to the billions in military and economic aid; to the latitude and support the United States gives Israel on protecting its security; to Washington's willingness to shield and defend Israel from political isolation, sanctions, and criticism; America's support is indeed vital.

And despite the tensions in that relationship it's only gotten stronger on an institutional level and in terms of public support. I've explored those reasons elsewhere but essentially they come down to a perception of common values and identity -- endorsed or acquiesced to by millions of non- Jewish Americans and a pro-active, affluent, and highly influential Jewish community that lobbies effectively on Israel's behalf.

And Israel's neighborhood validates that bond. From Hamas to Hezbollah, from al Qaeda to the Muslim Brotherhood, from Assad's regime using Scuds and chemical weapons against his own people to the U.S. experience in Iraq and Afghanistan, there's a perception that the entire region is inherently undemocratic and violent. This not only diminishes Israel's own bad behavior, it validates a pro-Israeli narrative. Indeed, there's a case to be made that the U.S.-Israeli bond will weaken when -- and only when -- the image of Israel fundamentally changes in the minds of Americans. The violent and extreme behavior of states and groups in the Middle East have delayed or even prevented that from happening. Still, even without Arabs behaving badly as perhaps Israel's best talking points in Washington, it's hard to imagine any U.S. administration trying to force Jerusalem to accept a peace deal and or imposing severe consequences if it did not.

But what about the demographic argument? Surely that spells disaster for Israel, a fate that cannot be avoided. Under the pressure of having to manage or control -- with or without the Palestinian Authority -- millions of unhappy, angry, and potentially violent Palestinians, Israel's image in the United States will only deteriorate as the democratic Jewish state is undermined. Demographics might mean that, absent some sort of Israeli-Palestinian agreement, Israel could reach such a state sometime in the next 20-30 years, right around its 100 birthday. It's a powerful argument that cannot be ignored.

Still even the demographics aren't necessarily determinative. Nobody can rule out an Israeli-Palestinian agreement to defuse the problem. And even if one fails to materialize, life is not necessarily that stark or binary in terms of the choices and decisions offered up. Nor is it easy to determine when the point of no return is crossed or the moment of truth and reckoning appears.

More to the point, a smart Israeli leadership could try to defuse the demographic challenge by breaking it into pieces. With regard to the 1.7 million Palestinians who are citizens of Israel, the government could make a concerted effort to eliminate discrimination and ensure that they are treated equally as citizens with their fair share of jobs, access to housing, and educational benefits. As for Gaza's 1.6 million Palestinians, as long as Hamas rules there, Israel will likely treat the problem as a security issue; and there will be little pressure from many other quarters to take Hamas's side and do otherwise. Jerusalem's 300,000 Palestinians seem to be in no great hurry to join up with the Palestinian Authority, and the vast majority have no interest in claiming Israeli citizenship or fighting. With greater attention to improving services and eliminating the barrier, Israeli could go quite a way in defusing tensions there too.

That leaves the 2.3 million Palestinians in the West Bank either living under some form of Palestinian Authority jurisdiction or under Israel's control. And that is a huge problem, particularly should the PA collapse or a third intifada erupt. Indeed, it would create a situation in which more than two million Palestinians would exist without hope, increasingly angry and radicalized. If the past is any guide, the most likely outcome of this unhappy situation wouldn't be a Martin Luther King-like non-violent movement to demand citizenship in an Israeli state; but an uprising marked by violence and terror. And we know where the last Intifada lead. Let's be clear. Israel has bad options on the demographic front. But Palestinian options(and their future) look much worse.

All these factors have afforded Israelis and their leaders the time and space to survive tough years, to strengthen their state, and to prosper. Some believe these assets have also permitted Israel not to make choices, to abdicate responsibility, particularly when it comes to settling up the Palestinians. But the asset triad also provides flexibility for Israeli leaders to make wise and intelligent choices. Some have; others have not.

The choices at hand, however, aren't only Israel's to make -- as if only Israel would do A, B, and C everything would simply fall into place. Israel has missed many opportunities and so have its neighbors. Neat and definitive solutions are hardly the norm. In the end, what is more likely to emerge isn't rebirth and renaissance of the dreamers nor the catastrophe foretold by the pessimists, but the muddle-through envisioned by realists. At least in the years ahead, the Israelis will keep their state and even prosper. But their neighbors will most assuredly never let them completely enjoy it.


Reality Check

Does America Still Have a Special Relationship with Israel and Saudi Arabia?

And, if so, is it even worth keeping?

A week or so ago, I found myself sitting on a panel about Iran with Saudi Prince Turki bin Faisal Al Saud and Israel analyst and former Mossad officer, Yossi Alpher.

If F. Scott Fitzgerald was right that the mark of the sophisticated mind is the ability to reconcile the yes and the no, he should have been there to see this. The Israeli-Saudi exchanges were fascinating, cordial, edgy, and quite instructive. There was some real push and pull on the Israeli-Palestinian issue, but clearly a common view on the danger and challenge posed by Iran.

As a historian by training though not by trade, the Israeli-Saudi conversation started me thinking about these two U.S. allies -- how they agreed and disagreed with one another and we with them. But most of all I was reminded how primary they both have been and still are to America's successes and failures in the Middle East.

During the 1940s when the United States was first getting its feet wet in the Middle East (and its oil), Washington developed very special, though very different, relationships with Riyadh and Jerusalem, roughly about the same time. The first with Saudi Arabia was driven largely by the growing importance of oil in the wake of World War II and the European recovery. Nothing was more emblematic of that emerging relationship than the famous meeting between President Franklin D. Roosevelt and Saudi King Abd Al-Aziz on Great Bitter Lake in February 1945. And while Roosevelt was likely as enamored by kings and the romance of distant and exotic lands as he was by Middle East strategy, the basis would be laid for a strategic relationship lubricated by Saudi oil in exchange for U.S. security guarantees and military, technological, and economic support for the kingdom.

A more complex mix of moral, humanitarian, and domestic political concerns would drive U.S. support for the creation of a Jewish state in the wake of the Nazi Holocaust. And a bit of realpolitik too. By the spring of 1948 -- with the newly created State of Israel coming into being -- President Harry Truman saw merits in adviser Clark Clifford's arguments that the Russians were poised to recognize Israel and that Washington shouldn't worry much about Abd al-Aziz's reaction. The Saudis, he argued, had nowhere else to sell their oil and no one else to help them develop it. Clifford turned out to be right, for the most part. Indeed with rare exceptions, notably the 1973 Arab Oil Embargo, the United States has succeeded in keeping oil and Palestine quite separate.

Over the years, these two special relationships would continue to develop, mature, and to define much about U.S. policy in the region. Indeed, of the three original reasons for America's involvement in the Middle East -- the Cold War, oil, and Israel -- only the last two really continue to shape U.S. policy. Regardless of differences between the United States and these two strange Middle East bedfellows, what binds the bilateral ties has been stronger than what divides them. And this is likely to continue. To bring Mark Twain into the argument, rumors of their demise have been greatly exaggerated. More than likely they're here to stay. And here's why.

Stability, Stability, Stability

It is the cruelest of ironies that with all of the promise of the Arab Spring and its tropes of democratization, gender equality, freedom of conscience, and the like, it is the authoritarian kings, Saudi Arabia in particular -- the anti-force to all of these values -- that have survived largely untouched. And this administration and its predecessor -- for all the talk of the Freedom Agenda and being on the right side of history -- still values stability as the paramount virtue. The Saudis don't want an Arab Spring in Riyadh. And neither does Washington.

Sure, there are tensions in the relationship, and yes the oil-for-security tradeoff has been weakened. But billions in arms sales and oil technology, the U.S. commitment to Gulf security, and bases and prepositioning in Gulf Cooperation Council countries nearby continue to drive the importance of this relationship. Whatever doubts the Saudis have about U.S. reliability, should Iran or anyone else threaten the kingdom they won't be calling Moscow or Beijing first for help.

As for the U.S.-Israel relationship, the character of that bond remains as durable as ever. It's in the broadest conception of the American national interest to support likeminded democracies and that value affinity remains the bulwark of the relationship. Just take a look at the March 2013 Gallup poll revealing that public support for Israel is at an all-time high. Since the Arab Spring, that bond has only strengthened as Israel's Arab neighbors have melted down -- driving spikes in violence, anti-American sentiment, and anti-Semitic rhetoric.

The fact remains that Israel's best talking points in Washington in defense of a strong relationship remain the Arab instability and dysfunction that mark their neighborhood. It would take a fundamental change in America's image of Israel to break that bond. And part of that change would require a Sadat-like Arab leader to make the case in a way that few Arab leaders have ever done, at least since the death of Jordan's King Hussein.

The bizarre axis of common enemies

No two countries could be more fundamentally different in character, history, religious affiliation, political system, and culture than Israel and Saudi Arabia. The old joke that when the Jews left Egypt Moses should have turned right instead of left and everything might have been different puts the matter in perspective. That the United States has managed to maintain these relationships and benefit from them without much conflict given the differences between them is as much a result of basic Saudi and Israeli needs as it was American diplomatic creativity and skill.

Still, rarely, if ever it seems have Israeli and Saudi interests seemed to converge as closely as they do now, leaving the United States on certain issues the odd man out. Of course, there are major differences over the pursuit of Arab-Israeli peace. But on issues relating to Egypt (where Riyadh and Jerusalem welcome the military's return), and Iran (where both fear a nuclear Tehran) it may well be that this informal Jerusalem-Riyadh axis carries more influence than one may think, particularly on the Iranian nuclear issue. The United States will be hard-pressed to do a deal with Iran that leaves two of its last remaining Middle East allies angry, aggrieved, and fundamentally left doubting America's will and power. And so most likely, despite Saudi and Israeli fears, Washington probably won't be forced to accept its own stated slogan that no deal is better than a bad one. Two allies in hand is worth one very problematic potential frenemy in the proverbial bush.

* * *

But that leaves us with a big question: are these special relationships even good for Washington anymore? The argument has been made for years that the United States is too subservient to Israel and too addicted to Saudi oil. Why not reduce its dependence on these two and make new friends? How about Turkey? Maybe even Iran? Surely, building these relationships would help the United States be seen as more credible around the region. One could argue it would also allow it greater freedom of action to protect its interests.

There's no doubt that maintaining close ties with the specials come with liabilities. Washington is directly linked to supporting or acquiescing in Israeli policies toward the Palestinians and other Arabs that engender rage, and support for the Saudi monarchy makes a mockery of U.S. principles of democracy and respect for human rights.

But for seven decades now, the advantages of these relationships have also made America relevant and influential in a very tough region. In war and in peace, these relationships have proved invaluable. When Saddam invaded Kuwait, the Saudis offered vital staging areas and Arab cover to enable the United States to push him out. And without the U.S. relationship with Israel, there would have been no Egyptian-Israeli peace treaty and likely no chance of an Israel-Palestine peace agreement today either.

But the U.S.-Israel relationship is supposed to be special -- not exclusive. And America is still too dependent on Saudi oil and not nearly tough in pushing the kingdom to stop funding jihadi groups and Wahabbi ideology.

Yet today, especially, when Washington lacks a reliable Arab partner, when it can't seem to make up its mind as to whether Egypt is a friend or adversary, Israel and Saudi Arabia are critically important. There are clear differences in these bilateral ties; but these really do pale compared with the convergence. If the White House wants to manage the Iran nuclear issue or push the Israel-Palestine peace process forward or keep trying to find a solution for Syria, it needs their help. With friends like these, many critics of the special relationships argue, who needs adversaries? But the critics tend to see the world as they want they want it to be, not the way it is. But with diminished U.S. influence and perhaps even a reduced role in the region, can beggars be choosers? Who else are we really going to rely on? This really isn't Lehman Brothers. We have them; and they're too big to fail.

Jim Watson - Pool/Getty Images