Morocco is the only country which may be capable of paying damages
Dr. Adam Reuter

Can Jewish refugees claim billions from Arab states?

More than 700,000 Jews fled from Arab countries by the mid 1960s, most of them immigrating to Israel. The property they left behind is estimated at billions of dollars, but the disintegration process most of these countries are going through doesn’t leave Mizrahi Jews much hope for compensation.

Mizrahi Jews lived in the Arab domain for many generations, in Iraq from the days of Babylon and in North African countries since the Roman era.


Throughout certain periods of history, the majority of the world's Jews lived in districts which are now controlled by Arab countries, but as a result of demographic changes and the immigration to Europe in the Middle Ages, only five percent of the world's Jews remained in the area at the beginning of World War II – mainly in Morocco, Iraq, Egypt and Tunisia.



The standard of living of the Jews in Cairo and in Baghdad on the eve of World War I was higher than the standard of living of Eastern European Jews, who lived in small and mostly remote towns. Their main occupations were in commerce, textile, customs, dressmaking, gold crafting, banking and finances.


In countries under Ottoman rule, Jews could also get into the governmental sector and become high-ranking government workers, tax collectors and even judges. Quite a few Jewish families gained a lot of capital over the generations.


At the same time, the Zionist movement evoked antagonism among the Arab residents, which increased amid the revival of nationalism. The establishment of Israel increased and intensified the anti-Semitism, leading to a rise in cases of harassment, plunder and even massacres.


Jewish refugees. Quite a few Jewish families gained a lot of capital over the generations (archive family photo)
Jewish refugees. Quite a few Jewish families gained a lot of capital over the generations (archive family photo)


The government of Iraq (which became an independent state in the 1950s) even nationalized Jewish businesses and much Jewish property, allegedly as "compensation" for the Palestinian refugees – but this money mainly reached the hands of senior government members.


In the early 1960s, Egyptian President Gamal Abdel Nasser nationalized Jewish property in Egypt, and the same happened to Libya's Jews. In Syria, Tunisia and Algeria, most Jews fled with only the clothes they were wearing after the declarations of independence, leaving all their property behind.


The Jews of Morocco were treated much better, and were perhaps the only ones who could leave in a relatively organized manner with their money, but in many other cases they left their homes and businesses behind.


By the mid 1960s, more than 700,000 Jews had left the Arab states, most of them immigrating to Israel.


How much Jewish property was left behind?

The estimates regarding the property left by Jews in Arab states vary from one source to another and are very difficult to verify, especially as there is a need to conduct a general evaluation of the real estate left behind in today's prices.


A large portion of nationalized Jewish real estate was left, for example, in the most posh neighborhoods of Cairo, Alexandria and Baghdad. The communal property of Egypt's Jews covered huge areas, including about half of the district of Maadi (a city of villas and gardens located about 20 kilometers from Cairo, where all the luxurious houses have turned into the residences of ambassadors from various countries).


In addition, there is a need to assess the flow of income from the factories, stores and businesses that the Arab regimes (or Arab neighbors) gained control of after the Jews fled, and which remained operational for many years (in rare cases, some are still operating today). Even the most conservative assessments point to compensation of billions of dollars, which according to some estimates reaches $15-20 billion, and much more.


What is are the chances of financial compensation?

One of those trying to collect as much information and possible and raise an interest among members of the veteran generation and among the children of the Israeli refugees is Dr. Edy Cohen, an expert in Middle Eastern affairs and a senior researcher at Bar-Ilan University's Department of Middle Eastern Studies.


Dr. Cohen, the son of Jewish refugees who fled Lebanon in the 1980s, managed to collect information about this aspect of the "nakba" of the Arab state's Jews as part of his studies. Through the Kedem Forum for Arabic Studies and the conferences he holds, he is trying to create a buzz regarding the need to try to get Mizrahi Jews this huge financial debt back.


But the Arab states' current disintegration process is not helping the chances of actually receiving compensation. Syria no longer exists as a state, as only 25 percent of the territory is controlled by the Assad regime and the rest is divided between the Islamic State, Jabhat al-Nusra, the national rebels and the Kurds.


The situation is similar in Iraq, where almost one-third of the territory is already controlled by ISIS. Libya has essentially been divided between a number of large tribes, and the situation in Algeria and Tunisia isn't promising either.


Of all the countries mentioned so far, the only relevant ones are Egypt and Morocco, which can allegedly afford to pay compensation. Morocco, which has a relatively stable economy, may be capable of paying damages if it has to, but Egypt – which is relying on external donations right now – won't be able to do so.


An amusing anecdote is the fact that huge Egyptian bank Misr, which has about 500 branches in Egypt and in other countries and which is owned by the Egyptian government, is now claiming ownership of the King David Hotel in Jerusalem. The bank is demanding compensation for the hotel's shares, which it says were expropriated by the Israeli Administrator General in as early as 1948. The Egyptians must have forgotten that the Israeli Administrator General can claim all the assets of Jewish families in Egypt – and that even after deducting the value of the King David Hotel, it could be quite a good deal for the State of Israel.


Deduction agreement with the Palestinian property?

In February 2010, the Knesset approved a law safeguarding Jewish refugees' right for compensation. The law states that "as part of negotiations for peace in the Middle East, the government will include the issue of compensating Jewish refugees from Arab states and Iran for the property they lost, including property which was owned by a Jewish community in those countries."


According to one estimate, the lost property of Palestinians who became refugees following the War of Independence amounts to about 60 percent of the property lost by Jews expelled from Arab states. In the past decades, ideas have been raised about different deduction agreements.


It's possible that following an international agreement, the United States or other international elements will assume responsibility to financially compensate both sides as part of a final agreement settling this dispute, but in light of the shaky economic situation the entire developed world has been facing since the 2008 crisis, this possibility seems far-fetched at the moment.


Dr. Adam Reuter is the chairman of the Reuter Meydan Investment House and CEO of Financial Immunities Ltd.


פרסום ראשון: 08.03.15, 10:17
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