Vision to Reality: The Reut Blog

The Government of Israel and others have repeated the same thesis for quite some time: that an advanced railway network linking the remote areas of Israel to its urban center will have two positive effects. One, it will  narrow the present socio-economic divide between remote and urban communities; and two, as this divide narrows and people move to remote areas the high cost of living in the urban center will go down.

But today, the CEO of Israel Railways, Yitzhak Harel, stated the opposite. Harel declared that improving railway infrastructure alone would have little, if any, effect on the housing prices in Tel-Aviv and surrounding cities. Likewise, he added that it would not significantly improve the socio-economic situation of remote communities, often refereed to as the periphery. Reaching this later goal, Harel aruged, requires a broader development plan–one not focused solely on railroads but rather on attracting both residents and business.

We at The Reut Institute believe in a similar plan, that of regional leapfrogging. We think a new approach  can dramatically increase the quality of life in Israel’s peripheral regions. Our plan argues that if regions develop their unique assets and mobilize economic activity, they will be able to compete in the global sphere. While infrastructure may assist in such development, it is surely not enough to generate it.

For more details,  read our preliminary summary of economic clusters.