Occupied Jerusalem- The war on Gaza has exacerbated the crisis in the construction sector in Israel, as Benjamin Netanyahu’s government continues to ban the entry of more than 100,000 Palestinians to work in the country, while this sector is threatened with collapse with the failure of government plans to bring in more foreign workers instead of Palestinian workers from the occupied West Bank.
The decision taken by the Israeli government immediately after the outbreak of the war on Gaza, to impose a complete ban on the entry of Palestinian workers from all fields, was a fatal blow to the construction sector, which was confirmed as the war continued for the tenth month.
According to data from the Bank of Israel published in the first days of the war on Gaza, until October 7, there were 333,000 workers in the construction sector, including 208,000 from inside Israel, 75,000 workers from the West Bank, 12,000 workers from the Gaza Strip, 23,000 foreign workers, and 15,000 workers from the West Bank without permits.
To bridge this gap, the Israeli government has been working in several directions to bring a large number of foreign workers to the country, to boost the construction sector and other affected industries, such as agriculture and nursing, as it was supposed to bring in 6,000 foreign workers per month, from India, China, Sri Lanka, Moldova and Ukraine.
Hiring foreigners
According to the Population and Immigration Authority of the Israeli Ministry of Interior, the workers brought in so far are mainly replacing those who left the country following the surprise attack launched by Hamas on the “Gaza envelope” settlements and Israeli towns in the south, where there were 23,000 foreign workers in Israel in the construction sector.
According to the economic newspaper Globes, tens of thousands of Palestinian workers were dismissed from the workforce, which in fact constituted about 80% of all workers on construction sites and workshops in Israel. With the outbreak of the war, a government plan was approved to bring in tens of thousands of foreign workers, but the plan failed and did not achieve its goals.
As the war on Gaza continues for the tenth month, the shortage of workers in the construction sector continues to worsen, despite the government’s plans to bring foreign workers to this sector. Construction sites are waiting for no less than 50,000 workers, according to government decisions, and about 10,000 of them have arrived in Israel so far.
Many problems have arisen in dealing with foreign workers due to their shortcomings, according to what the newspaper quoted from the Vice President of Business Development at the Keren Real Estate Company, Yotam Rabinovich, who said that they do not speak Hebrew or even English, making it extremely difficult to communicate with them during work, which negatively affects the workflow and its quality.
Rabinovich adds that they are “less professional than Palestinian workers, not to mention that the foreign worker’s wages cost him more than double, compared to the Palestinian worker who works more hours than the foreigner.”
He explained that many foreign workers left Israel for fear of war, and those who stayed had much higher costs for the contractor. “They benefited from the fact that supply and demand changed in their favor.”
So Rabinovich says that foreign workers are raising their demands and want more money, and they work for whoever pays them more. The monthly wage of a foreign worker may reach about 30,000 shekels ($8,000), and this exacerbates the crisis in the construction sector and leaves negative repercussions on the real estate market, both in terms of costs and rising prices.
Looking for a solution
In light of the repercussions of the war on the construction sector, the continued ban on the entry of Palestinian workers, and the reluctance of foreign workers to come to Israel in light of the escalating security tensions, the Israeli Ministry of Construction and Housing published a new tender for foreign construction companies to carry out residential construction work in Israel.
According to the ministry, 10 foreign companies will be selected, and priority will be given to companies with international experience in building high-rise buildings. It is worth noting that until the end of 2023, there were 11 foreign companies operating in Israel, and with the exception of one Turkish company, all the others are Chinese, according to a report by the economic newspaper Calcalist.
According to the ministry’s announcement, the winning companies will be required to build several residential buildings in hundreds of thousands of square meters during their period of operation in Israel, and the companies will be registered in the database for 5 years, with the possibility of an extension for another 3 years, which means that the labor crisis will accompany the labor sectors in Israel for many years.
The newspaper’s correspondent, Guy Nardi, explained that the Ministry of Housing’s tender is nothing more than an “attempt to put out fires” to find solutions to the intractable problems in the construction sector since the beginning of the war, which have left negative repercussions on the real estate market.
He pointed out that the proposed solutions include increasing the number of foreign construction companies in Israel and expanding the number of countries in which companies can submit tenders to work in the country, with the aim of maintaining functional and operational continuity in the construction sector to avoid its collapse.
He pointed out that foreign companies that will submit bids will be subject to strict and precise selection procedures, during which they will have to demonstrate international experience in high-quality construction and implementation, as well as professional capabilities with advanced technological techniques and financial strength.
complete paralysis
According to the Israeli Contractors Association-Boni Haaretz, the shortage of construction workers has led to the loss of more than 18 million workdays, equivalent to a loss in GDP of 17 billion shekels ($4.86 billion).
Commenting on the government’s decision to employ foreign companies in the construction sector, the newspaper “De Marker” quoted the Israeli Contractors Association “Boni Haaretz” as saying: “The decision means the government’s abandonment of the construction sector at the height of one of the worst wars in Israel’s history, and at the height of the most severe crisis in the construction sector.”
The Contractors Association held Netanyahu’s government fully responsible for the crisis sweeping the construction sector and the worsening foreign workers crisis, saying, “The government is responsible for the worsening crisis, and its decision comes after 9 months in which the government – through its actions and policies – caused complete or partial paralysis for most contractors in Israel.”
According to the Contractors Association, there is no shortage of construction companies in Israel. Rather, thousands of Israeli contractors lack tens of thousands of workers whose work was terminated by a government decision to bring in foreign workers. It proposes to get rid of construction contractors who employ more than 300,000 Israelis and to use foreign companies and their workers.
