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Tel Aviv University
TAU History Professor Gadi Algazi in Marxist journal denounces "Offshore Zionism"
gadi algazi
Faced with competition from low-paid computer programmers
in India and elsewhere, many Western software
companies have opted to ‘offshore’ their testing and development
operations to the Subcontinent or East Asia. In Israel,
however, the largest it company, Matrix, has come up with a novel solution:
introducing, as the Matrix website describes it, ‘the .rst Zionist local
offshore outsourcing’, using low-paid ultra-orthodox women workers
in state-subsidized settlements in the Occupied Territories. Matrix has
opened a new development centre, named Talpiot—after the idf’s elite
combat unit—in the West Bank settlement of Modi‘in Illit. As Matrix ceo
Mordechai Gutman explains, outsourcing to East Asia is not all perfect:
Long distances, cultural and language differences, different time zones,
as well as rising wages and high turnaround rates, all combine to reduce
the attractiveness of development in these countries. To tackle the problem,
Matrix has set up a development centre in Israel, employing a highly
quali.ed workforce at competitive rates . . . [At Talpiot], religious women
gain employment in development centres close to their home, in a homogeneous
environment that provides for their speci.c needs . . . Because the
religious population competing for the jobs faces relatively low living costs,
Matrix is able to provide its local offshore outsourcing services to customers
at prices similar to those in Far East countries, but with the advantages
of . . . geographic and cultural proximity.
Glossed over in this proximity is the fact that Matrixs offshore outsourcing
operation in Modiin Illit takes place in the OccupiedTerritories, and
that the low cost of living is due to the substantial subsidies advanced
by the state for the development of Israels colonial frontier.
Three miles east of the Green Line, Modiin Illit was founded in 1996. It
is situated some 20 miles east of Tel Aviv and 8 miles west of Ramallah,
on what were then the orchards, .elds and pastures of .ve Palestinian
villages: Nilin, Kharbata, Saffa, Bilin and Dir Qadis. Modiin Illit is
among the fastest-growing settlements in the West Bank today, soon to
be granted the status of a city, and with a population of over 30,000; the
Housing Ministry projects 150,000 residents by the year 2020. Along
with the huge ring of Israeli-only housing around Greater Jerusalem, the
eastward sprawling conurbation of Maale Adumim, and other rapidly
expanding settler towns such as Ariel, Karnei Shomron, Betar Illit and
others in the cluster of settlements at Gush Etzion, it is part of a rash of
new building that has transformed the West Bank landscape over the
past ten years.
Modiin Illit is not the work of messianic settler-zealots but of a heterogeneous
socio-political alliance that links real-estate developers, capitalists
seeking the opportunity to pro.t from land con.scation and government
subsidies, politicians driving forward the colonization projectand
captive labour. Its development, like that of Nirit, Alfei Menashe and
Tzu.n, is part of a larger project, begun in the 1980s, that aimed both
to establish enclaves in the OccupiedTerritories for wealthy, more
mainstream settlers, and to dissolve the Green Line (Israels pre-1967
border) by creating facts on the ground’—linking the new settlements to
communities inside the Line, while expanding the latter in the direction
of the Territories. Its very name, Upper Modiin, misleadingly suggests
that it is part of the town of Modiin, situated some miles away on the
Israeli side of the pre-1967 border.
With the post-Oslo expansion of West Bank settlements in the mid
1990s, thousands of housing units were built in Modiin Illit in violation
of the lawand with the ex post facto approval of the local council.2
In one area, the council whitewashed the illegal construction by making
retroactive adjustments to the zoning plan. According to a 1998 investigation,
the entire Brachfeld Estatebuilt on the lands of Bilinwas
thrown up without construction permits; though naturally, not one of
these houses was demolished when this fact was revealed. The close
cooperation between the Modiin Illit Council and powerful private
entrepreneurs, who were granted special bene.ts and no-bid contracts,
is well documented in the state comptrollers report: again and again
the council sought to justify its cosy relationship with the investors,
arguing that the private contractor has already built housing units and
other projects in the area, and that there is an urgent need to complete
the project. The state comptroller also determined that the Modiin Illit
Council collected only 10 per cent of the taxes that the developers owed
on the lands and that the Council offset the debts it was owed from the
two main developers of the settlement by means of shady bookkeeping
involving future building projects, even before receiving the required
permits for their construction.
While the settlement itself is kept spotlessly cleanwinning the Beauty
Star award from the Council for a Beautiful Israelmuch of its sewage
.ows into the Modiin stream, polluting the areas water resources.
All this is not a matter of mere corruption or mismanagement, but a
structural feature of the colonial frontier: unregulated settlement activity
creates possibilities for vast pro.ts at the expense of the human and
natural environment. In Israels Wild East, the need to establish facts
on the ground gives developers a free hand; the political urgency of the
colonization process works in tandem with investors attempts to secure
quick pro.ts. Ethnically, too, Modiin Illit practises the same policies of
destructive exclusion: of.cials in one of its main neighbourhoods claimed
that on principle and for the sake of security, they did not hire Arabs.3
The expansion of Modiin Illit and similar settlements was given a further
boost in the early 2000s by the construction of the separation wall,
under shelter of Sharons Disengagement Plan. With the de facto annexation
of the West Bank lands lying between the Wall and the pre-67 border,
real-estate developers could now promise the luxury and security of gated
communities to wealthy Israelis, as the local Palestinian inhabitants were
barricaded out of sight. At the same time, generous government subsidies
offered jobs, housing and social services unobtainable in Israel proper, a
powerful magnet for those struggling to subsist. Precisely because they
are not based solely on the messianic fervour of hard-line settlers but also
offer answers to real social needs, these settlements are able to broaden
the power base of the colonization movement, forging a powerful alliance
of state, political and capitalist interests, well-off home-buyers and
those suffering real hardship: large families looking for cheap housing or
new immigrants dependent on government subsidies and seeking social
acceptance. It is they who pay the price for the hostility that the Wall generates
among those whose land it robs.
The construction of the Wall around Modiin Illit is swallowing up
another 445 acres (about 2,000 dunums) of Bilin farmers lands, in
addition to what had already been stolen. In Palestine, as throughout
much of the Mediterranean basin, farmers have traditionally lived in
small villages rather than isolated farmsteads, and go out each day to
cultivate their family holdings in the surrounding area. To wall off the
village is thus a brutally simple way of robbing these families of their
ancestral lands. The inhabitants of Bilin have fought the construction
of the wall that separates them from their lands both by legal means and
through popular, non-violent struggle. Since February 2005 they have
demonstrated every Friday, hand in hand with Israeli peace activists and
international volunteers, in front of the developers bulldozers and the
idf troops accompanying them. They have joined a series of Palestinian
villagesJayyous, Biddu, Dir Ballut, Budrus and othersleading campaigns
of non-violent resistance against the Wall. Often coordinated by
the local Popular Committees against the Fencethough with scant
support from the of.cial Palestinian leadershipthese campaigns
have achieved some modest successes: impeding or slowing down the
advance of the separation barrier, or de.ecting its course so as to regain
some of their lost vineyards and .elds.
More than two hundred people have been injured in the violent dispersal
of the joint IsraeliPalestinian demonstrations in Bilin, and many have
been arrested under various pretexts. Forces of the Israeli Army, the
Border Guard, Israeli police and private security .rms have been used
against the protesters. Clubs, tear-gas, rubber bullets and live .re have
taken a heavy toll. With late-night sweeps and arrests, Israeli forces have
tried to deter the members of the Popular Committee of Bilin who, even
in these times of hatred and fear, steadfastly adhere to the principles of
non-violent resistance and open cooperation with Israeli opponents of
the occupation. The prison service even sent in its special Masada unit,
police provocateurs disguised as Palestinians, who tried to whip up the
crowd and incite demonstrators to use force against the soldiers.4 Only
the determination of the members of the Popular Committee of Bilin
prevented these provocations from causing an uncontrolled escalation
that could have ended with the loss of life.
Meanwhile, construction had already started on some of the newly
expropriated land even before the Bilin villagers case had been heard.
It was, indeed, the real-estate investors and developers who insisted on
this particular route for the Wall, to encircle land they had already earmarked
for future settler housing. The main entrepreneurs involved in
the expansion of Modiin Illit are Lev Leviev, one of Israels most powerful
businessmen and an owner of Africa Israel Investments; Levievs
business partner Shaya Boymelgreen, an American real-estate investor;
Mordechai Yona, the former head of the Contractors Association; and
Pinchas Salzman, an orthodox businessman. GreenPark, one of the
developments being built on the land robbed from the Bilin peasants, is
already under construction by Leviev and Boymelgreens Danya Cebus
company, a subsidiary of Africa Israel.5 It is a massive $230 million
project, with 5,800 apartments planned.
Serious .nancial interests are thus involved in the struggle over Bilins
farming land. They have received substantial assistance from two bodies
with claims to legal ownership of much of it: the Custodian of Absentee
Property and the Land Redemption Fund. The cap is a governmental
agency, of.cially entrusted with the management of absentee land. It
has played a key role in taking possession of Palestinian land, initially that
belonging to refugees within Israel and, more recently, in the Occupied
Territories as well. When Bilin residents appealed to Israels High Court
of Justice to change the route of the separation wall, it was revealed that
the cap had served as a cover for the settlers. In a special report, two
Israeli human rights organizations uncovered these revolving transactions:
the settlers transfer the land they purchased to the Custodian,
who declares it state land. This enables the planning process to start. The
Custodian allocates the land to the purchaser in the framework of the
planning-authorization agreement, and then for development, for no consideration.
6 The Land Redemption Fund was established some twenty
years ago by hard-line settlers (former Gush Emunim leader Zvi Slonim,
Sharon aide Avraham Mintz, Brooklyn-born terrorist Era Rapaport) with
the goal of coordinating the takeover of Palestinian land in areas targeted
for settlement expansion. Arab straw men act as mediators in the land
deals, posing as buyers, while the actual purchasers are Israeli investors.
These methods were also used to take possession of Bilins lands.7
The project is thus inextricably political and economic: colonization
and annexation yield enormous pro.ts. Among the lrfs donors can be
found the same capitalists who appear elsewhere as settlement builders
and real-estate investors. They donate considerable sums to the radical
settlers Fund not out of political conviction alone, for there is a pro.t to
be made. The same alliance can be encountered elsewhere in the West
Bank. The lrf is also the investor behind the expansion of the Tzu.n settlement
on lands robbed from Jayyousanother Palestinian village set
to lose most of its resources with the construction of the separation wall.
Here, an elevenfold expansion of the settlement is under way, and the
developer is once again a real-estate company controlled by Leviev.
In Modiin Illit, the old economy of contractors and developers meets the
new economy of high-tech development, epitomized in companies such
as Matrix, Motorola Israel, Teva, Amdox, etc. Both economies are closely
tied to the state. As its website explains, Matrix, through its wholly owned
subsidiary Sibam, is one of the largest it suppliers to the idf and Israeli
security forces, as well as government ministries, energy and transport
sectors and the Knesset. It also leads the market in banking information
systems, providing consulting services for most of Israels commercial
banks, mortgage banks, credit card companies and insurance companies.
 At a June 2004 meeting of it .rms with the Knessets Science
and Technology Committee, attended by Finance Minister Binyamin
Netanyahu, a request by Matrix ceo Mordechai Gutman for state assistance
to enable them to compete with cheap programmers in India was
warmly received. As both Netanyahu and the Committees chairman
agreed, the range of interests you represent here, around the table, is
also the interest of the state.
Docile labour
The state indeed sustains Matrixs venture in Modiin Illit: not only are
the workers wages subsidized by the government for at least .ve years,
but the colonial project continues to put at the disposal of the developers,
contractors and high-tech .rms the cheap, stolen land of the local farmers,
as well as the public resources, policemen and soldiers necessary to
secure itand a captive and disciplined workforce. A much-publicized
feature of Matrixs offshoring at home operation in Modiin Illit is the
companys use of ultra-orthodox womens labour. At the Talpiot software
development centre there the rules of Kashruth are observed, and there
are separate kitchens for women and men. There is also a pumping
room for women to nurse their babiessince, while working for Matrix,
they are also breeding for Israel. Although many are mothers of six, they
miss fewer days of work than a mother of two in Tel Aviv, an Imagestore
project director in Modiin Illit told a journalist. These women have no
issues. They just work. No smoking or coffee breaks, chatting on the
phone, or looking for vacation deals in Turkey. Breaks are only for eating,
or pumping breast milk in a special room. Some women can pop home,
breast-feed and come back.
The Matrix development centre is strictly kosher, with two local rabbis to
supervise the site. We painstakingly uphold every kosher rule, say the
companys directors, so as not to lose rabbinical approval. In exchange
for the rabbinical seal, the investors get obedient kosher girls. The rabbis
play a crucial role in instilling capitalist work discipline. The ominous
word gezela loaded moral term in Jewish religious tradition, meaning
taking by force and robberyis applied, not to the lands of Bilin, but to
stealing the employers time through idle talk. Visiting journalists are
struck by the silence at the workplace:
Personal conversations in the work room of Matrixs development centre
are forbidden, not only between men and women, but among the women.
They pay you for eight hours of work, says Esti [one of the workers], so they
expect you to work. If someone is talking too much . . . someone else will tell
her Hey, thats gezel, as though we are taking from the company. Once we
asked if we could take a break of .ve minutes for prayer, but the rabbi said
that the ancient Sages didnt take a break but would call out the Shmawhile
working, and thus we can put off the prayer until after the working day.
The girls are described as diligent, ef.cient and exceptionally productive
workersevery human-resource managers dream. The punctilious
adherence to the rules is maintained even when the bosses are not
present. Estis group supervisor is usually in Petach Tikva. But even so,
with the ecology of mutual pressure among the women, the rules are
upheld. We are accustomed to rigour and obedience, she says with half
a smile, we have gotten used to not doing forbidden things even when
no one is looking, because there is someone watching from above.13 The
Matrix recipe is a new combination of reciprocal social control among
workers, of surveillance and discipline, with rabbinical authority.
How much are they paid? During the .rst six months, which includes a
comprehensive government-sponsored computer-programming course
in Java and dot.net, the women earn $435 per month, or 2,000 shekels.
After that they receive the minimum wage, which stood at $725 per
month at the end of 2005. From their second year they get $1,045 per
monthcompared to perhaps $3,500 or $4,000 per month for an experienced
programmer in Israel, and over $5,500 per month in the us. In
addition, the state subsidizes Matrixs Talpiot centre by $215 per month
for every worker. There are no bonuses, and the women are tied to the
company for at least two years; they have to pay a .ne equivalent to two
months salary if they want to quit.14 The companys pr department is
careful to explain that the wage rates in Modiin Illit have nothing to
do with the exploitation of cheap labour. They do not re.ect the relative
productivity of the girls or the price of their services in the international
market, but rather, their low cost of living. As one of their religious leaders
explained to another Israeli reporter: The ultra-orthodox community
is used to living on nothing, so making a little is a lot for them.
Cannon fodder?
Israeli press reports of the workers at the Talpiot centre give the impression
of an encounter with a remote and exotic tribe, whose women
are given to strange rituals and high birth-rates. Despite their strange
ways, the writers emphasize, these women can be trained for productive
labour. They are content with very little and are disciplined and obedient,
thanks to the priests of the tribe, who add their authority to the employers
commands. Great is the fortune of Israeli capitalists! Faced with the
challenges of globalization, they have no need to search for cheap docile
labour in faraway countries; they have found it in their own colonial
backyard. But if these descriptions are reminiscent of Webers invocation
of pious female workers and the Protestant ethic, such idealized representations
should not be taken for everyday reality. The ultra-orthodox
women working for Matrix surely .nd their own ways to circumvent
rabbinical injunctions and shop-.oor control.
In addition, there are pressing material reasons for obedience to the prevailing
labour discipline. Where else can these women work? One of
the female managers of the project openly states: There is no work in
Modiin Illit, and women do not have cars to travel anywhere else. Most
of them have no drivers licence, making it crucial that there is a place of
employment close to home.The rate of car ownership in Modiin Illit
is among the lowest in the country60 vehicles per thousand population,
and there are no industrial areas. This is the law of the stick and the
carrotand the stick is the same stick, unemployment and poverty, that
also drives Palestinian workers, in Israel and the OccupiedTerritories, to
participate as day labourers in building the settlements and the separation
wall. They are victims of colonial capitalism, like many others who are
being incorporated into the settlement process through the exploitation
of their social distress. But what future awaits them and their children, as
long as their existence is based on theft of land and serving as a human
wall, a target for the hatred of the dispossessed Palestinians?
Most of the residents of Modiin Illit are ultra-orthodox and have many
children. Two years ago, speaking to a reporter from Haaretz, some
emphasized that they did not think of themselves as settlers. It is the
housing shortage that pushes large ultra-orthodox families into the settlements,
where they .nd public housing and government assistance that
do not exist within Israel. In the settlement of Betar Illitlikely to be the
site of the next struggle around construction of the separation walland
in Modiin Illit, a two-bedroom apartment costs less than $100,000. But
even if they didnt come here for ideological reasons, said the spokesman
for the Settlers Council with con.dence, they wont give up their homes
so easily.17 The mechanisms that incorporate people into the colonial
process, making them settlers despite themselves, occasionally emerge
into the open. In 2003, the mayor of Betar Illit, Yitzhak Pindrus, went so
far as to tell the reporter that the ultra-orthodox were sent to the Occupied
Territories against their will, to serve as cannon fodder.
The colonization process is built not just on capitalist expansion but on
social misery and poor peoples pressing needs, just as the separation
wall is built on fears, real and imagined, ampli.ed by daily propaganda.
It draws in young couples from the slums of Jerusalem and enrols new
immigrants from the Russian Federation, who may .nd themselves sent
to settle Ariel, for example, in the heart of the West Bank; large ultraorthodox
families too, gain access to subsidized housing only by joining
the settlement project. All these can .nd themselves defending the occupation
in order to defend the fragile social existence they have built for
themselves under the guidance of government authorities, the settler
movement and private capital.
Matrixs pro.ts rose by 61 per cent in the .rst quarter of 2005, and by 76
per cent in the third, compared to the previous year. Its valuation on the
Tel Aviv Stock Exchange stands at around half a billion shekels ($110m).
Matrix it is controlled by Formula Systems, of the Formula Group, with
worldwide sales of $500 million.18 It is also quite vulnerable to public
criticism and boycott. Matrix is, for instance, the primary distributor of
one of the most popular commercial versions of the Linux operating
systemRed Hat. What would happen if Linux users were to announce
a boycott of Matrix until it withdraws its investments from the Occupied
Territories, or put pressure on the public institutions that are among its
clients? Among others, the HebrewUniversity, the Weizmann Institute
of Science, BenGurionUniversity, and my own TelAvivUniversity have
all purchased Red Hat licences from Matrix. What if users threaten to
boycott the companiessuch as Oraclewho use the services of the
Talpiot development centre in the settlement of Modiin Illit? This does
not apply to Israel alone: Matrix represents some of the most important
international companies; all are vulnerable to public pressure from
opponents of the settlements.And what of Formula Systems, which
owns Matrix? Formula Systems is very sensitive to its public image. It
takes pains to present itself as a socially responsible company. Its customers
too can demand that Formula stop supporting the building and
expanding of settlements in the occupied West Bank.
It has sometimes been suggested that the dynamic of capitalist modernization
would compel Israel to abandon its attachment to old-style
colonialism. The case of Matrix in Bilin demonstrates that Israeli capitalism
can be both colonial and digital, occupying both global markets and
frontier settlements, campaigning both for unbridled privatization and
for heavy government subsidies. Left to itself, it will neither extricate itself
from colonial expansionism nor exert pressure on the state to do so
that is, unless Israeli colonialism becomes an overwhelming liability, and
resistance by the colonized and their allies forces a change of course.
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