Predatory Inclusion: Financial Markets, Debt and Palestinian Citizens of Israel

Palestinians in Israel suffer from chronic unemployment and impoverishment. In 2018, only 57.7 percent of Palestinian Citizens of Israel (hereafter PCI) between the ages of 25-64 were employed, in comparison with the national employment rate of 80.3 percent. In the same year 45 percent lived in poverty. Many PCI are excluded from Israel's financial market with 18 percent not having an active bank account. Others, however, have been incorporated on an unequal and discriminatory basis. Despite constituting 21.4 percent of the population, PCI hold 1.8 percent of mortgages. While access to mortgages is limited, consumer credit is accessible. Concurrently, the majority (68 percent) of PCI report a protracted state of indebtedness and are disproportionately (37 percent) subjected to asset forfeiture following debt default.

Consequently, over the last decade, the Israeli government has developed a strategy to increase the financial inclusion of its two million Palestinian citizens. Policies implemented as part of this strategy include the doubling of granted mortgages and increasing access to credit and microcredit loans through newly established funds. Official documents discursively frame financial inclusion as a means of elevating the socio-economic status of PCI and weakening the role of organised Palestinian criminal organisations. The financial marginalisation of PCI - Israel's most disadvantaged community - is said to push them towards borrowing from illicit lenders, who respond with violence in cases of insolvency (e.g.
Governmental CEO Committee 2020; Resolution 292).

I propose researching Israeli state financial inclusion strategies and policies towards PCI, to understand their history, character, and implications for racial capitalism in Israel, and their relationship to the ongoing practices of Israeli settler-colonialism. Utilising theoretical work on financial markets, race, debt, inequality, and marginalisation in other socio-political contexts (e.g. Elyachar 2002; Gilmore 2007; Galino 2010; Han 2012; James 2014; Taylor 2019), my project will deliver new insights into a range of scholarly debates, particularly on financialisation and inclusion; Israel/Palestine studies; racial capitalism; and settler-colonial studies.

My research will be guided by three questions:
1. What are the financial inclusion mechanisms and policies targeting PCI, developed since Israel's neoliberal turn in the early 1980s?
2. How have the racial and class dynamics of PCI been shaped by Israel's financial inclusion strategies?
3. How have policies of financial inclusion impacted the integration and position of PCI within Israeli society?

This research will fill a gap in scholarship on the political economy of the Palestinian-Israeli conflict by focusing on the overlooked case of PCI. As Israeli citizens, PCI face a distinct form of marginalisation that differs from Palestinians in the West Bank and Gaza. The relationship of PCI to Israeli racial capitalism is significantly mediated through their access and incorporation into Israel financial, housing, and labour markets. This research will also shed light on how the PCI reality is shaped by global capitalist dynamics and a regime of racial domination. Furthermore, my research will situate PCI in a comparative context with other groups subjected to structural racism and exploitation, and where financial inclusion has been used as a political tool, including South Africa, the USA and Chile. Exploring the similarities and divergences with these case studies will help move away from a framework of exceptionalism that pervades scholarly research on PCI.

This project will integrate quantitative and qualitative research methods including content analysis, a survey to assess the shape and depth of PCI indebtedness and semi-structured interviews with policy makers, creditors and indebted PCI from various backgrounds between the ages of 20-45.