Economics, while important, isn’t everything. Economic peace is meaningless and
cannot replace political peace. While undertaking serious negotiations between
the Israeli government and the PLO, Secretary of State John Kerry is equally
serious about ensuring that the Palestinian economy shows immediate signs of
improvement and growth. He knows that there must be a peace dividend for the
A growing Palestinian economy will provide people with hope
at a time when their economy has been staggering and unemployment has increased
as the Palestinian Authority has been incapable of paying its debts both to the
public and the private sectors. Having a job and a better future is essential to
build confidence in the peace process.
But at the same time, we should
all realize that you cannot buy a people’s national aspirations or pride. No
amount of money and promises of prosperity would ever replace the demands of the
Jewish people for a territorial expression of their identity – a land they can
call their own. The same is true for the Palestinian people – money and hope of
prosperity will not replace their demand for a territorial expression of their
identity – a land they can call their own.
Economic growth and hopes for
prosperity are important, perhaps even essential, but not enough to bring us
Palestinian economic growth can increase the chances that the
security calm we have experienced in the past years will continue. It is true
that when people have a clear sense of what they may lose, they are more
prepared to work to secure it and as a result there are increased chances of
lasting security. Investments in housing, infrastructure, commerce, business and
industry in Palestine are crucial for their economic growth and add to
Business development and economic growth can also build
bridges across the borders, beyond the fences and above the walls to develop
relationships and partnerships.
The creation of mutual and joint
interests between Palestinians and Israelis is a peace-building imperative that
provides reasons for people on both sides to care about the peace process and
the improvement of life for people on the other side.
Palestine is almost
completely dependent on the Israeli economy. The Palestinian economy is almost
completely insignificant for the Israeli economy.
importance of Israeli assistance and investment in the Palestinian economy far
outweighs the economic and financial values involved.
economy could experience a huge lift if the Israeli economy would be more open
to it. In the Oslo agreement the parties signed an economic agreement called the
Paris Protocol named for the the city where it was signed. This agreement linked
the two economies in a common customs envelope because there were no physical
borders to the Palestinian Authority. Without physical borders the can be no
economic borders. But with the agreement came measures of control of movement
and access and to a large extent the Palestinian economy became hostage to the
In the past there were over 100,000 Palestinian workers
in Israel, bringing home large quantities of Israeli shekels which were spent
mostly buying Israeli goods.
Since then, those workers were replaced by
foreign laborers who send their money home abroad rather than spending it in
Israel. When there were more than 100,000 Palestinians working in Israel it was
quite common for those workers to invite their employers to family celebrations
and holidays as it was common for the Israelis to invite their workers and their
families for the same reasons. These were not relationships built on equality,
yet they opened doors and contact between people was mostly
Israelis and Palestinians have had almost no contact over the
past 10 years. Movement between the two societies has been very limited and
today the young people on both sides have almost no contact. While it is true
that the Facebook generation has managed to cross borders virtually and reach
out to each other in numbers that are difficult to quantify (my impression is
that the numbers are quite high), the physical face-to-face meetings are few and
far between. Economics and business development may provide new opportunities
for people from both sides to reach out and meet each other.
Palestinians may be very critical of this approach as it borders on what they
call “normalization” – meaning giving benefits to Israelis without ending the
occupation. From their perspective the development of normal relations should
only occur once the occupation ends and peace between the two states
Many Palestinians will be very careful about entering into
business relationships openly because of the criticism from within. It is still
quite early for Palestinians to work openly with Israelis, but truth be told,
more than 80 percent of Palestinian trade is with Israelis.
throughout the West Bank and Gaza are filled with Israeli products (not from
settlements, but from within Israel proper) and Palestinians have no problem
buying them. Rami Levy’s two stores in the West Bank are filled with Palestinian
consumers who take advantage of the economy of scale, and benefit from the
cheaper prices in those stores than in local shops in their own towns and
The fastest growth in the Palestinian economy will happen when
the issues of movement and access are eased. There has been great improvement in
the past years and many checkpoints and roadblocks have been removed within the
West Bank, but there are more that could be removed.
Security checks of
cargo at crossing points between the West Bank and Israel could be greatly
Currently all trucks carrying goods from Palestine into Israel
or to the ports for export must be unloaded at the crossing points, checked and
loaded onto another truck (called back-to-back) – more than doubling the cost of
movement of the goods. Certainly trusted traders, larger companies with track
records of years of doing business and others could return to the “door-to-door”
policies that existed prior to the second intifada.
Even if Israel
decided that it did not want Palestinian vehicles on the roads in Israel as
existed prior to 2001, trucks owned by Israeli companies, even Israeli Arabs,
could be used and allowed to be checked without unloading and
The Israeli consumer should also be prepared to purchase
Palestinian products – including household goods, textiles, furniture, plastic
products, cosmetics, even pharmaceuticals which are being exported by
Palestinian companies to Europe. There are great opportunities for Israeli
hi-tech firms to contract Palestinian software engineers and other Palestinian
hi-tech graduates instead of contracting out to India and
Palestine is right next door, in the same time zone, with the same
currency, a banking system which is integrated with Israel’s and the possibility
to meet within a very short time. There are more than 1,600 hitech graduates
coming into the market in the West Bank every year. Opportunities exist and
should be explored.
Peace has to pay for both sides. It is quite easy for
Israel to help the peace to pay for the Palestinians and the benefits Israel
reaps would be worth their weight in gold.
The author is co-chairman of
IPCR, the Israel Palestine Center for Research and Information, and the
initiator and negotiator of the secret back channel for the release of Gilad
Schalit. His new book, Freeing Gilad: The Secret Back Channel, has been
published by Kinneret Zmora Bitan in Hebrew.