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Firstly what the hell do you mean by that?
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An Arab majority would mean the end of Israel as a Jewish state. We can discuss the merits of the existance of Israel if you want (although I can't promise to be dispassionate about it), but regardless of whether you wish Israel well or not, an Arab majority would kill it.
Your economic information is a bit out of date
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Israels public debt is 101% of the GDP
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About 98% now.
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with an unemployment rate of about 10.6%
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Less than 8.9% now. Not fantastic, but better than France and Germany.
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and 20% of the popultaion lives below the poverty line, which is less than Jordan, but more than Egypt (16%) and IIRC about the same as Syria.
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I don't think poverty in Israel is the same thing as poverty in Egypt, Jordan or Syria. Israel is a first world country whether you like it or not.
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Israels unemployemnt rate is infact the highest in the region exceptn for Jordan.
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See above, and also, Israel's government doesn't purposely keep inefficient nationalized industries or bloated bureacracies just to keep unemployment down, as some countries do.
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Tarde with Arab countries is the states only way forward, (in addition to reconstruction of the economic setup).
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Besides my response of "no, Israel can develop independent of the Arabs as it has for over 50 years", I repeat my previous question: in what way is Israel opposing trade with Arab countries?