US embassy cable - 05TELAVIV3151

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 003151 
 
SIPDIS 
 
E.O. 12958: DECL: 05/23/2015 
TAGS: ECON, PREL, SENV, IS, ECONOMY AND FINANCE, GOI INTERNAL 
SUBJECT: GOI MOVES AHEAD ON STRATEGIC PLAN FOR THE NEGEV 
 
REF: A. 04 TEL AVIV 02901 
     B. 04 TEL AVIV 03085 
     C. 04 TEL AVIV 03393 
     D. 05 TEL AVIV 02537 
     E. 05 TEL AVIV 02540 
 
Classified By: Economic Counselor William Weinstein for reasons 1.4 (b) 
 and (d). 
 
1. (C) SUMMARY: The GOI is moving ahead to prepare a 
comprehensive strategy to develop the Negev and Galilee 
regions, a plan which has as one of its objectives the 
reduction of public opposition to and concern over the 
disengagement.  Two private consulting firms Daroma and 
Mckinsey have been contracted by the GOI to develop the plan. 
 Despite the lack of a completed Negev plan, however, the GOI 
is seeking funding for several projects it currently has on 
the books.  These projects include the extension of Route 6 
and development of Road 31 in the Negev, and the relocation 
of military bases, military research and development centers 
from central Israel.  The planning process for these projects 
will last from three to four months with no current figures 
on the ultimate financial cost.  According to a staffer of 
Vice Prime Minister Peres, funding will be sought from the 
GOI budget, donations of overseas Jewish groups, and USG 
assistance.  END SUMMARY. 
 
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The Development Plan for the Negev 
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2. (C) On May 19, Einat Wilf, Foreign Policy Advisor to Vice 
PM Peres, and Haim Blumenblat, CEO of Daroma, provided an 
informal overview of GOI plans to develop the Negev to 
EconCouns.  Blumenblat said there is a nexus between 
developing the Negev and disengagement.  He described 
disengagement as a difficult but necessary endeavor that 
includes dismantling and uprooting large populations. 
Therefore development of the Negev should be viewed as a way 
to give hope to the Israeli population as they confront 
withdrawal from Gaza. The development of the Negev would 
support the economic development of both Israel and Gaza, he 
said, and promote economic and regional stability.  Turning 
the Negev into a magnet for a population shift through 
improvement of the quality of life and the construction of a 
strong, powerful and contributing community is essential, he 
emphasized.  A good educational system, infrastructure, 
housing, industry and employment is necessary to attract 
people to live and invest in the region. 
 
3. (C) The plan is being handled out of the Prime Minister's 
office and Minister Peres' office.  Directors General of key 
ministries are heading up a Steering Committee to integrate 
various projects for the "Negev and Galilee" development. 
The international consulting firm Mckinsey is also involved 
in this planning and integration phase, said Blumenblat. 
Both firms are an integral part of the plan to develop the 
Negev. 
 
4. (C) The goal of the plan, said Blumenblat, is for Negev 
GDP per capita to equal the national average, and lead to a 
population shift from central Israel to the southern region 
in ten years.  The population there will increase to 1.1 
million by 2015.  The Negev academic community should also 
get a boost in the number of students, eventually equaling 
the national average.  Blumenblat said employment and 
unemployment rates paralleling the national average will be 
another indicator of plan success.  Blumenblat noted that 
currently 9% of the Israeli population occupy the Negev, 
totaling 600 thousand people.  Jews account for 75% of that 
population and Bedouin 25%.  Negev income is only two-thirds 
of the national average, he said, and gross domestic product 
(GDP) per capita, is lower than the Israel average.  A high 
unemployment rate, and distance from the center of the 
country make the Negev unattractive, he said. 
 
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Civil Projects and Defense Component of the Plan 
--------------------------------------------- --- 
 
5. (C) Blumenblat noted that the lack of an overall 
development plan is not stopping GOI efforts to implement a 
number of projects in the region.  There are currently 
several road projects about to begin in the Negev, such as 
the extension of the Trans-Israel Route 6 and Road 31.  There 
is also a proposal for developing a Jewish-Bedouin industrial 
zone at Shocket junction, north-east of Be'er Sheva.  This 
project has received approval, he said. 
 
6. (C) Blumenblat said Negev development includes an 
important and major defense component.  Israeli Defense Force 
(IDF) base relocation, part of the development plan for the 
Negev, is in the works.  Relocating selected IDF 
installations will help speed economic development and induce 
population growth of the Negev.  The Israeli Air Force (IAF) 
base located in Ben Gurion Airport, he said, has already been 
selected for transfer.  This air base would bring employment 
to cities of Arad and Dimona.  An IDF army base also tabled 
for transfer will bring eight thousand soldiers to the Negev, 
adding to the region's economic and employment needs, he 
reiterated.  Another plan is to establish technology support 
centers for the IDF near Be'er Sheva city. 
 
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Who Will Pay? and What About the Bedouin? 
----------------------------------------- 
 
7. (C) Blumenblat said the Prime Minister's office and Vice 
Prime Minister's office will continue overall planning for 
Negev economic development and that a budget proposal will be 
put forward to the Knesset in September.  He did not address 
planning for the Galilee.  Wilf said the GOI will seek 
funding for the road and other immediate projects from 
different sources including USG, Jewish donors, domestic 
Israeli investment and a GOI budget supplemental. 
 
8. (C) Planning, Blumenblat said, must also take into account 
Bedouin interests.  Planning for the Negev includes 
infrastructure and education support for the Bedouin 
community in the Negev.  He emphasized that a major goal of 
the planning is to address education for Bedouin women. 
Infrastructure support would include tailored projects to 
help sustain Bedouin villages, providing jobs to help the 
high unemployment rate. 
 
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Comment 
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9. (C) It is worth noting that Route 6 is supposed to pay, at 
least in large part, for itself through tolls. 
 
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