GOI MOVES AHEAD ON STRATEGIC PLAN FOR THE NEGEV

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. -------------- The Development Plan for the Negev -------------- ¶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. -------------- --- 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. -------------- 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. -------------- Comment -------------- ¶9. (C) It is worth noting that Route 6 is supposed to pay, at least in large part, for itself through tolls. ********************************************* ******************** Visit Embassy Tel Aviv's Classified Website: http://www.state.sgov.gov/p/nea/telaviv You can also access this site through the State Department's Classified SIPRNET website. ********************************************* ******************** KURTZER