Israel risks emerging weakened and no longer a dominant regional power if it continues along its present trajectory, according to analysts and commentators from within the country and its diaspora.
They point to intensifying political polarisation, eroding investor confidence at home and abroad, and deep demographic shifts as warning signs that the current model of the Israeli state may become unsustainable in the coming decades.
“When people talk about the Israeli state ceasing to exist, it’s not about disappearance overnight,” said Shir Hever, a political economist. “The real question is whether it can continue in its current form. States can fundamentally change—South Africa after 1994 or East Germany after reunification are examples.”
Internal Divisions at the Core
Analysts argue that Israel’s core challenge is not only its treatment of Palestinians, but the deepening fractures within Israeli society itself. A growing number of secular Israelis—particularly entrepreneurs and highly skilled professionals—are leaving the country, while religious Zionist and ultra-Orthodox communities are expanding rapidly despite contributing proportionally less to the economy.
This shift, they say, threatens the tax base and investment flows needed to sustain Israel’s military posture and the social costs of supporting a fast-growing, benefits-dependent population.
Political polarisation has intensified in recent years, fuelled by war, prolonged national crises and attempts to weaken judicial oversight under Prime Minister Benjamin Netanyahu.
Warnings From Inside the Establishment
Concerns are not limited to critics of the government. In 2024, Eugene Kandel, a former head of Israel’s National Economic Council and a Netanyahu ally, along with Ron Tzur, warned that Israel may not reach the 100th anniversary of its 1948 founding if it stays on its current path.
They identified three competing visions within Israeli society: a liberal secular Jewish group, advocates of a religious Jewish state, and those calling for a state with equal rights for Jews and Palestinians. The deepest rift, they argued, lies between the first two.
“A struggle over identity and values that pits groups against one another creates an existential threat,” they wrote, warning such conflicts cannot be resolved without profound social change.
A State Transformed?
For others, that transformation has already occurred. American political scientist Ian Lustick argues Israel no longer fits the description many Israelis associate with a Jewish liberal democracy.
“It is no longer a Jewish state in the sense most Israeli Jews understand it,” he told Al Jazeera. “It now functions as an apartheid system governing everyone between the Jordan River and the Mediterranean Sea.”
Hever argues Israel cannot afford what he calls a “managed decline.” To maintain its current structure, he says, the country depends on a highly educated middle class that sustains its technology, medical and innovation sectors—groups now increasingly choosing to leave.
At the same time, continued territorial expansion and military dominance require sustained industrial capacity, technological leadership and living standards high enough to discourage emigration.
“Right now, none of those pillars are particularly strong,” Hever said.
Emigration Accelerates
Population growth has long been viewed by Israeli leaders as a strategic necessity. Since the state’s creation in 1948—following the displacement of roughly 750,000 Palestinians—maintaining a demographic advantage was central to state policy and military capacity.
But analysts say prolonged political turmoil has already driven many young graduates abroad, even before the judicial overhaul proposed in early 2023.
That reform effort sparked massive protests, with more than 200,000 Israelis—around 2 percent of the population—demonstrating against what they saw as a power grab.
The result has been a marked rise in emigration. While precise figures are difficult to calculate, parliamentary data and independent research suggest more than 150,000 people have left Israel in the past two years, and over 200,000 since the current government took office in late 2022.
“The upper middle class has the means to leave,” Hever said. “They’re educated, speak English and have global job options. What’s new is that families with children are also leaving, which suggests a deeper shift.”
He cited estimates from Israeli economist Dan Ben-David that Israel relies on roughly 300,000 highly skilled individuals to sustain its economy. “If enough of them leave, Israel risks slipping from a developed economy toward a developing one—something it simply can’t afford.”
Mounting Economic Pressures
Investor confidence has also suffered. Judicial reforms and prolonged conflict have dampened both domestic and foreign investment, weakening growth needed to fund defence spending and social support systems.
Kandel and Tzur estimate that in 2018, the average Israeli household contributed about 20,000 shekels ($6,450) annually toward supporting the ultra-Orthodox community. Demographic projections suggest that community could triple by 2065, potentially raising the burden on non-Orthodox families to around 60,000 shekels ($19,370) a year.
At the same time, defence costs are likely to rise if Israel maintains its current military posture.
“Even before judicial reforms, institutional investors were shifting money abroad,” Hever said, noting that around half of Israeli domestic investment is now overseas. Foreign investment, particularly in the tech sector, has also slowed amid political uncertainty and growing pressure on military-linked firms.
An Uncertain Road Ahead
For now, Israel remains relatively stable. A long-term US military aid package agreed in 2016 continues to underpin its defence industry, and economic growth persists, albeit at a slower pace than other developed economies.
But analysts warn that growing regional tensions, domestic political deadlock and the steady departure of young professionals could strain the system further.
Yossi Mekelberg of Chatham House offered a stark comparison: “Dictatorships collapse suddenly. Democracies erode gradually, until they are no longer recognisable.”
“If the current leadership and its ultra-right and ultra-Orthodox allies remain in power,” he said, “the trend will likely continue—with more liberal and mobile citizens choosing to leave.”
As emigration rises and social divisions deepen, observers say Israel’s long-term resilience may depend less on military strength than on whether it can rebuild internal cohesion before its foundations are irreversibly altered.