Foreign Workers, Refugees and Prospects for an Israeli-Palestinian Agreement

David Bartram argues that Israel's recent acquisition of a sizable foreign labour force carries the potential to complicate negotiations between Israel and the Palestinians, especially concerning Palestinian refugees. Though officially temporary, many foreign workers in Israel show signs of long-term settlement, recalling foreign worker experiences in Western Europe and elsewhere. As the Israeli government attempts to manage foreign workers' demands for proper treatment and respect for human and civil rights, what is likely to emerge is the extent to which the country is unprepared to offer any meaningful membership to new populations of non-Jews. The foreign worker episode, then, may reinforce Israel's resistance to demands for the return of Palestinian refugees. As Israel and the PLO/Palestinian Authority stumble towards (and sometimes away from) a comprehensive peace agreement, a new factor in the equation needs to be considered: Israel's new foreign labour force. In this paper the author reviews the history of Palestinian refugees and surveys the problems associated with Israel's recent experience with foreign workers. The importation of these workers signals a transition in Israel's development trajectory that is in all likelihood irreversible, at least in the short term. Specifically, with low-wage foreign labour now constituting more than 10 percent of Israel's labour force, the size of the foreign labour population has easily reached a critical mass that typically leads to permanent settlement and the formation of networks that encourage sustained migration. The availability of low-wage foreign labour is also severely hampering efforts to increase productivity in certain sectors, notably construction. It is argued here that the presence of this new non-Jewish population in Israel is likely to complicate negotiations with the Palestinians concerning difficult outstanding issues, in particular the fate of Palestinian refugees from the 1948 Israeli-Arab war. The structure of the Israeli state is not well suited for coping with the prospect of non-Jewish immigration of any type. The government's handling of the foreign workers issue highlights the difficulties involved and has raised sensitivities concerning Israel's ‘self concept’ as a Jewish state. One likely consequence is an increased resistance to demands for the return of Palestinian refugees. This episode thus illustrates the effect of economic development choices on inter-state relations. Development (2000) 43, 72–78. doi:10.1057/palgrave.development.1110174