Encountering Peace: Making peace pay

Economic growth and hopes for prosperity are important, perhaps even essential, but not enough to bring us peace.

Lapid and Bishara 370 (photo credit: Anat Hamemi)
Lapid and Bishara 370
(photo credit: Anat Hamemi)
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 people there.
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 peace.
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 stability.
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.
Nonetheless, the importance of Israeli assistance and investment in the Palestinian economy far outweighs the economic and financial values involved.
The Palestinian 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 Israeli economy.
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 positive.
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.
Some 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 exists.
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.
Shops 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 villages.
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 improved.
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 reloading.
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 China.
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.