Even as it flourishes, Israel faces a growing demographic challenge

On July 1, Yair Lapid became Israel’s 14th prime minister. Though he will serve only as caretaker until general elections are held on Nov. 1, he has a once-in-a-lifetime opportunity to make history as he helps his nation grapple with a complicated reality: enormous economic and political success coupled with a rising demographic challenge.

The State of Israel is enjoying a golden age. For more than 15 years — since the Second Lebanon War of 2006 — it has maintained relative calm, strategic stability and prosperity. The economy is flourishing: over the past decade the average annual growth rate was more than 3.5 percent, accelerating to an astonishing 8 percent in 2021. The national debt rate (relative to GDP) is significantly lower than that of the United States; the unemployment rate is close to zero; and the standard of living is rising steadily. The high-tech revolution has propelled Israel to the forefront of global technology, its unique innovative spirit attracting investors from around the world.

The Jewish state has signed peace accords with six Arab League nations, and its relationship with a wide swath of the Arab world is one of deepening cooperation — a de facto peace. Countries beyond the United States, including China, Japan, India, Europe and Brazil, view Israel as a strategic partner. With its population nearing 10 million and its per capita GDP eclipsing that of the United Kingdom, Israel is an astounding success story. In many respects, the Israel of 2022 has fulfilled both the Zionist dream of its founders and the Jewish people’s yearning for renewal after the harrowing tragedy of the Holocaust.

And yet, the nation faces a grave existential threat — not just from Iran’s nuclear capabilities but from its own demographics. In 2020, for the first time in many decades, the Arab population living between the Mediterranean Sea and the Jordan River rose slightly above the Jewish population, according to analysis conducted by two research groups associated with Israel’s defense establishment. And despite some changes in birthrate trends, this small Palestinian majority will become a significant one in a decade or two. This means that if the status quo persists and Israel continues to rule over the West Bank, it will in a relatively short time face a cruel dilemma: If it gives Palestinians full citizenship — and therefore full rights — it will no longer be Jewish. If it doesn’t do so, it will no longer be democratic. Either way, Israel, as a Jewish democratic state, will cease to exist.

Further complicating the situation are the profound changes sweeping Palestinian society. According to a poll conducted by Khalil Shikaki of the well-regarded Palestinian Center for Policy and Survey Research think tank, around 25 percent of West Bank residents today are in favor of negotiating with Israel, and only 28 percent still support a two-state solution. In contrast, 55 percent endorse an armed struggle against Israel. Younger Palestinians are turning their backs on the ideas of reconciliation, compromise and partition and embracing the idea of one state. The emerging demographic reality and the increasingly confrontational Palestinian mind-set foretell the Palestinian demand Israel will likely soon face: one person, one vote.

No external threat is as dangerous to the Zionist enterprise as this internal one. The basic premise of Zionism is that there should be one place on earth where Jews are the majority — so that this majority can exercise its right to self-determination within a democratic framework. If the Jews do not have a solid majority in their own land, Zionism will collapse.

Sadly, an apathetic public and a dysfunctional political system are preventing Israel from confronting this problem. Suffering terrorist attacks, most Israelis believe — justifiably — that they should not retreat under fire. But when the waves of terror subside, they feel no urgency to act, confident that they can continue to rule over millions of Palestinians without any truly perilous consequences. Economic prosperity, military prowess and international prestige blind them to the fact that each passing day brings them closer to the abyss.

It is time for Israel’s friends and allies to make their voices heard. Over the past 40 years, I’ve worked tirelessly for the Jewish state. I love Israel. I’m committed to it, and I’m doing everything I can for it. But today it is my duty to call upon the new Israeli prime minister to recognize his nation’s predicament and change course.

President Biden’s upcoming visit to Jerusalem and Ramallah presents a unique opportunity. So does the emergence of an American-Arab-Israeli security alliance. Lapid must seek a creative way to confront the Palestinian challenge, working hand-in-hand with the United States, the Sunni world and moderate Palestinians. Even if it appears impossible to arrive at a two-state solution, the prime minister must do everything in his power to avert a one-state catastrophe. No other mission is as important — or as urgent. Israel’s very future hangs in the balance.

Ronald S. Lauder is president of the World Jewish Congress and former U.S. ambassador to Austria.

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