More than 20 Arab towns are calling for the establishment of industrial and employment zones within their municipal boundaries or the expansion of existing ones. Despite the pressing need, the Ministry of Economy has allocated funding for industrial zones in just six towns: Al-Rineh, Al-Mashhad, Jatt (Triangle area), Al-Tira, and Araba, alongside an expansion in Kafr Qasem, which serves as the industrial hub for Arab towns.

This disparity underscores the deep inequality in resource allocation and land use between Arab and Jewish communities. Industrial zones near Arab towns currently make up a mere 3% of all industrial areas in Israel, while those near Jewish authorities account for 97%. This inequity stifles economic growth, forcing many Arab industrialists to relocate their businesses to Jewish municipalities and pay taxes there.

The lack of industrial zones near Arab towns not only hinders local economic development but also forces many workers to endure long commutes, reducing productivity and contributing to the widening socio-economic gaps. Local authorities in Arab towns remain financially strained, with significantly lower revenues from municipal taxes due to the absence of nearby industrial zones. As a result, 95% of Arab municipalities rely on insufficient "Balance Grants" from the Ministry of Interior, grants which Finance Minister Smotrich has further reduced, exacerbating the crisis.

Efforts to redistribute tax revenues from industrial zones, such as Nof Hagalil's Zipori industrial zone, to nearby Arab towns like Nazareth and Kfar Kanna have seen limited progress. Meanwhile, Government Resolution 550 allocated 475 million shekels over five years to develop industrial zones in Arab communities—only 15% of the actual development needs. To make matters worse, the Ministry of Finance recently cut this budget by 15%, leaving many towns without the means to address their economic challenges.

The Mossawa Center emphasizes that developing industrial zones is critical for sustainable economic growth in Arab communities. Such initiatives can reduce social disparities, increase employment opportunities, and enhance the financial independence of Arab municipalities, eliminating the need for "Balance Grants" and fostering a stronger sense of community security.

To address these urgent challenges, the Mossawa Center is hosting a conference on economic development in Arab society on December 12, 2024, in Nazareth. The conference will focus on industry, housing, and finance, and bring together mayors, officials, economic experts, and representatives from local authorities, banks, and companies. The event aims to foster dialogue, explore solutions, and advance the economic future of Arab society in Israel.