The realism of economic peace in Middle East
Can economic peace replace political peace?
Abdalhadi Alijla
Master of Art
Torino University- Italy
Master of public policy, and governance
Zeppelin University- Germany
0
Abstract
Palestinian society and economy are slowly being dismembered in Palestinian territories in
general and in Gaza in particular. The transformation in land, labor, demography, and society
have been destroyed and distorted. The current situation in Arab-Israeli conflict has many
aspects but still being defined by the occupation of Palestinian lands by Israel. Also, it can be
defined by the deterioration of the Palestinian’s life, economy, and society. The current situation
attracts international elements to the scene. These elements such as EU, USA, Russia, and
Quartet try to find a solution and push peace process forward. This paper discuss the term have
been used by Israeli Prime Minister Netanyahu. The term ―economic peace‖ refers to an
economic settlement for long term peace negotiation between Palestinians and Israeli. The paper
discuss if economic peace can replace political issues, and if it affect the development of ongoing
proximity negotiation. This paper go through the current situation and describe the most long last
conflict in the last period with an international dimension. Left undressed, the current conditions
in Palestinian territories will not only undermine the political peace, but will preclude economic
peace as well. This paper discuss the theoretical bases of economic peace, its realism, and if it a
Middle Eastern version could work. The paper will address and compare the theoretical bases
between Palestinians PM’s plan for Palestinian state and Netanyahu’s plan.
Keywords
Arab-Israeli conflict, Palestinian’s state plan economic peace, Peace process Negotiation, Palestinian
economy, economy for peace.
Martin Buber, the most prominent Jewish religious thinker of our last century wrote a letter to Mohandas
Gandhi. He explained the aspirations of Jewish people and their need for a homeland:
Dispersion is bearable, it can be purposeful if somewhere there is ingathering, a growing home center, a
piece of earth wherein one is in the midst of an ingathering and not in dispersion and from whence the
spirit of ingathering may work its way out all the places of the dispersion. When there is life, there is also
a striving, common life, the life of a community, which dares to live today, because it hopes to live
tomorrow. But when this growing center, this increasing process of ingathering is lacking, dispersion
becomes dismemberment.1
Today, there is no doubt that Palestinian society and economy are being destroyed and dismembered the
same way Mr. Buber mentioned. It is been observed for long time, how Israel acting towards Palestinians.
1
www.jewishvirtuallibrary.org/jsource/hstory/buber1.html
1
Background
Palestinian-Israeli Conflict
The Israeli–Palestinian conflict is an ongoing dispute between the State of Israel and the
Palestinians and is part of the wider Arab–Israeli conflict. At present, major polls show the vast
majority of Israelis and Palestinians agree a two-state solution is the best way to end the conflict.
Most Palestinians view the West Bank and Gaza Strip as their future state and most Israelis
agree(Khalidi 1992).
The negotiating parties have been the Israeli government and the Palestine Liberation
Organization (PLO). The official negotiations are mediated by an international contingent known
as the Quartet on the Middle East (the Quartet) represented by a special envoy that consists of
the United States, Russia, the European Union, and the United Nations. 2 The Arab League,
another important actor, has proposed an alternative peace plan. Egypt, a founding member of
the Arab League, has historically been a key participant. The United States has been an ardent
supporter of Israel often taking positions against UN Resolutions condemning the actions of
Israel( Roy 2009).
Since 2006, the Palestinian side has been fractured by conflict between the two major factions:
Fatah, the largest party, and Hamas. As a result, the territory controlled by the Palestinian
National Authority (the Palestinian interim government) is split between Fatah in the West Bank
and Hamas in the Gaza strip. Hamas is considered a terrorist organization by Israel and the
United States although it won the Palestinian elections of 2006; therefore, it has not been allowed
to participate in official negotiations. The Palestinians are an occupied people living in refugee
camps often without sufficient food, potable water, electricity, adequate medical care, or work.
Peace negotiations began at annapolis, Maryland, United States, in November 2007. No final
solution occurred. The parties agree there are six 'final status' issues which need to be resolved:
Jerusalem, refugees, settlements, security, borders and water.
Causes of the Palestinian-Israeli Conflict
The Palestinian--Israeli conflict stems from competing Jewish and Arab claims to the land in
Palestine (the Zionist occupation of Palestinian land), conflicting promises by the British in the
forms of the Hussein-McMahon Correspondence and the Balfour Declaration of 1917, and
several outbreaks of violence between Jewish and Arab residents of the region of Palestine.
The roots of the conflict can be traced to the late 19th century, which saw a rise in national
movements, including Zionism and Arab nationalism. Zionism, the Jewish national movement,
was established as a political movement in 1897, largely as a response to Russian and European
anti-Semitism. It sought the establishment of a Jewish Nation-State in Palestine so that they
2
Quartet established on 2002.It include UN,USA,EU,Russia.
2
might find sanctuary and self-determination there. The World Zionist Organization and the
Jewish National Fund encouraged immigration and funded purchase of land under Ottoman rule
and under British rule in the region of Palestine.
In the 1870s, a wave of anti-Semitism spurred a new migration from central Europe, and in
1898, Theodore Hertzl organized a Zionist international movement to establish in Palestine a
home for the Jewish People secured by public law. Thousands of Palestinians were already
living in Palestine as their descendants had done so for centuries.
In 1917, Arthur James Balfour, as Foreign Secretary, authored the Balfour Declaration, which
supported the establishment of a Jewish homeland in Palestine. The Balfour Declaration pledged
England’s support of Zionist goals in order to win support of international, especially American,
Jews to the Allies during World War I. In 1916, one year prior to the Balfour Declaration, a
secret agreement was made between the British War Cabinet and Zionist leaders promising the
latter a ―national home‖ in Palestine in consideration of their efforts to bring the United States
into World War I on the side of Great Britain. Following World War I and the dissolution of the
Ottoman Empire, Palestine came under the control of the United Kingdom through the SykesPicot Agreement and a League of Nations mandate. During the mandatory period, the British
made conflicting promises to both populations in the forms of the Hussein-McMahon
Correspondence and the Balfour Declaration of 1917. The Paris Peace Conference and
subsequent conferences made Palestine a British mandate. The League of Nations approved, and
more Jews entered Palestine. Palestine Arabs resented this ―immigration‖ into their homeland.
Tensions between Arab and Jewish groups in the region erupted into physical violence--the
1920 Palestine riots, the 1921 Palestine riots, the 1929 Hebron massacre and the 1936-1939 Arab
revolt in Palestine. The British tried to maintain a precarious peace, but Hitler’s anti-Semitic
policy increased the influx of Jews into Palestine and caused further Arab resentment. The
Jewish population rose to nearly half a million in 1935. The Arab rebellion started in 1936 and
continued to expand until a major British Military effort suppressed it two years later.
The British proposed a failed partition plan, while the White Paper of 1939 established a quota
for Jewish immigration set by the British in the short-term and by the Arab population in the
long-term. Both Arab and Jewish groups directed violence against the British in order to expel
the mandatory government, which was held in contempt by both sides. In 1942, Zionist leaders
met in New York’s Biltmore Hotel to devise the Biltmore Program which called for unlimited
immigration of Jews to Palestine which, after the war, would become a Jewish commonwealth
state(Sayigh 2003).
In May 1945, after the German surrender, the Jewish Agency wrote Prime Minister Churchill
demanding the full and immediate implementation of the Biltmore resolution, the cancellation of
the White Paper, the establishment of Palestine as a Jewish state, Jewish immigration to be an
Agency responsibility, and reparation to be made by Germany in kind beginning with all German
property in Palestine. The Palestinians seemed to have no say in any of this.
3
The British stalled, and the Haganah (the Jewish voluntary militia organized in local units
primarily for local defense) engaged in extensive smuggling. In October 1945, Haganah’s
clandestine radio station, Kol Israel, declared the beginning of ―The Jewish Resistance
Movement‖. On October 31, 1945 the Jews in Palestine engaged in an extensive ―terrorist‖
campaign and attacked three small naval craft, wrecked railway lines, and attacked a railway
station and an oil refinery. In June 1946, Jewish terrorists committed more sabotage in Palestine.
They destroyed twenty-two RAF planes at one airfield. The Haganah agreed to an Irgun
(terrorist group offshoot of Haganah) attack on British headquarters in the King David Hotel in
Jerusalem. The bombings killed ninety-one British, Arab, and Jewish people and wounded fortyfive. The British retaliated by raiding the Irgun headquarters in Tel Aviv. By the end of 1946
the Irgun-Sternist groups had killed 373 persons. The Haganah and the terrorists continued to
operate with at least tacit support of a large part of the citizenry. This violence and the heavy
cost of World War II led Britain to turn the issue of Palestine over to the United Nations. In
1947, the U.N. approved the partition of the British Mandate of Palestine into two states: one
Jewish and one Arab. The Jewish leadership accepted the plan, but Palestinian Arab leaders,
supported by the Arab League, rejected the plan, and a civil war broke out. Israel quickly
gained the upper hand in this inter-communal fighting, and on May 14, 1948 declared its
independence. Five Arab League countries (Egypt, Lebanon, Syria, Transjordan and Iraq), then
invaded Palestine, starting the 1948 Arab-Israeli War. The war resulted in an Israeli victory, with
Israel capturing additional territory beyond the partition borders, but leaving Jerusalem as a
divided city. The territory Israel did not capture was taken over by Egypt, Lebanon, Syria, and
Transjordan (now Jordan). The war also resulted in the 1948 Palestinian exodus, known to
Palestinians as Al-Naqba.
For decades after 1948, Arab governments had refused to recognize Israel and in 1964 the
Palestine Liberation Organization (PLO) was founded with the central tenet that Palestine, with
its original Mandate borders, is the indivisible homeland of the Arab Palestinian people. In turn,
Israel refused to recognize the PLO as a negotiating partner.
In the Six-Day War in 1967, Israel captured the West Bank from Jordan, the Gaza Strip from
Egypt, and East Jerusalem including the Old City and its holy sites, which Israel annexed and
reunited with the Western neighborhoods of Jerusalem. The status of the city as Israel's capital
and the occupation of the West Bank and Gaza Strip created more conflict between the parties
(Lenczowski 1980).
In 1970, the PLO was expelled from Jordan, in what was known as the Black September. Large
numbers of Palestinians moved into Lebanon after the Black September, joining the thousands
already there. In 1973 a coalition of Arab states led by Egypt and Syria launched the Yom
Kippur War against Israel.( Sayigh 2003). The Egyptians and Syrians advanced during the first
24–48 hours, after which momentum began to swing in Israel's favor. Eventually a cease-fire
took effect that ended the war(Shlaim 2000). This war paved the way for the Camp David
Accords in 1978, which set a precedent for future peace negotiations. Status of the occupied
4
territories Occupied Palestinian Territories is the term used by the UN to refer to the West Bank
and Gaza Strip—territories which Israel conquered from Egypt and Jordan in the 1967 Six-Day
War—in the conflict. The Israeli government uses the term ―Disputed Territories‖, to indicate its
position that some territories cannot be called occupied as no nation had clear rights to them and
there was no operative diplomatic arrangement when Israel acquired them in June 1967(Quandt,
Willian, Jabber, Fuad, Lesch, An Mosely) . The Israeli settlements in the West Bank and, until
2005, the Gaza Strip, have been an obstacle to a peaceful resolution of the conflict(Khaldid
2006) . The international media, the international political community (including the US, the
UK, and the EU), the International Court of Justice, and international and Israeli human rights
organizations who have also called the settlements illegal under international law. In the years
following the Six-Day War, and especially in the 1990s during the peace process, Israel reestablished communities destroyed in 1929 and 1948 and established numerous new settlements
on the West Bank. Most of these settlements of about 350,000 people are in the western parts of
the West Bank, while others are deep into Palestinian territory, overlooking Palestinian cities.
These settlements have been the site of much inter-communal conflict.
The second Intifada : deadlock of political settlement
The second uprising is a description of the clashes that engulfed the Occupied Territories late
Sept. 2000. As in the 1sth uprising a dramatic event in the context of diplomatic stalemate
sparked a reaction on the ground that was ripe for explosion. In 2000 it was Sharon's visit to the
Haram Al-Sharif on 28 Sept. and the deaths of demonstrators at the site. However, in both cases
one should look beyond the sparks to the deeper factors. The most crucial difference between the
first and the second uprising, lies in the changed political and diplomatic context in which they
took place and in the consequences they produced. The first broke out at a time when there was
no contact between the Palestinian national movement and Israel. The PLO had dispersed in the
aftermath of Israeli invasion of Lebanon, and the Israeli military was in full control of the daily
lives of Palestinians throughout the Occupied Territories. The 1st uprising enhanced the position
of the internal political forces. It took the form unarmed civil insurrections and succeeded in
brining home to the Israelis the notion that Palestine could not be governed by colonial rule. 3
But with the new uprising, a virtual Palestinian state apparatus is ruling over a population that
after seven years of the Oslo peace process is penned up in disconnected fragments of occupied
territory encircled by ever-expanding settlements4. The Palestinian entity is headed by the
relocated and expanded PLO bureaucracy, a substantial and armed security apparatus and an
elected parliament. Yet none of these new players capable of acting. On the front of negotiation
to implement Oslo accords (Sharm el Sheik agreement, Camp David Summit) Israeli side
insisted on moving directly to final status talks ignoring the original understanding that
3
Tamari, Salim, Hammarni, Rema. The Second Uprising: End or New Beginning? Journal for Palestine Studies, Vol.
XXX. No. 2 Winter 2001, p.6.
4
Tamari, Hammami, Ibid. p. 7.
5
withdrawal from the vast majority of the occupied territories would be completed during the
transitional period as a prerequisite to final status. Now withdrawal being linked to major
Palestinian concessions on final status issues. This shift represented the inevitable outcome of the
massive power imbalance between the two sides that has defined the logic of Oslo all along. 5
The breakdown of negotiations was the product of the clash between two contending logics: the
Israeli expectation of Palestinian concession on final status issue in return for greater land area,
versus the Palestinian leadership's inability to concede much on final status after having
conceded so much during the transitional period. 6
As with the first intifada the continuous dependence of the Palestinians economy on Israel is a
major vulnerability that has been used by Israel to suppress long-term resistance. A major
difference of the second Intifada in addition to the old vulnerabilies (reliance on Israeli water and
electricity network, dependence on Israeli labor market) there are new one that had emerged as
part of the Oslo process: the presence of a public sector employing 150.000 persons who rely on
the PA for salaries, 63 percent of Pa's revenue derive form taxes that are to be paid by Israel
under the share's custom regime that was part of Oslo process. Other interests that have emerged
since Oslo: the influential economic class that has emerged through strong ties to the political
leadership.
The Israeli side is vulnerable for its integration in the global new economy: the impact is felt in
tourism, the agricultural sector and the construction sector. The Palestinians suffer far greater
physical and human losses, but their secret weapon lies in the range of survival strategies that
households have developed over at least the past 15 years. 7 One major difference between the
two uprisings is the absence of wider civil rebellion, the population at large has been left with
virtually no active role. Popular committees as well as mass organizations began to collapse at
the end of the first intifada under the weight of Israeli methods. Their recovery was preempted
by the Gulf War and by Oslo. The only structure remaining to organize civil resistance is
(professionalized) non government organizations (NGOs) and what is left of the political
factions. Their structural limitation made them incapable of organizing at the mass level.
While the religious character of the 1st intifada was relatively muted, religion has played a major
mobilizing and symbolic role in the 2nd uprising. Nevertheless with Al-Aqsa as the main trigger
for the uprising religious fervour has been a salient dimension that at times has engulfed the
entire conflict.
Two contrasting trends within Palestinian politics in response to the events: the first call for
utilizing the political gains of the uprising to raise the ceiling of negotiations in which the
Palestinians would be able to extract better conditions. A second trend calling for the
5
Ibid
Ibid
7
Tamari, Hammami, Ibid., p. 17.
6
6
continuation of the uprising was exemplified by the more militant wing of Fatah and the
opposition parties (Islamic ones: Jihad and Hamas).
The intifada's role becomes means to keep up the pressure on a number of fronts: On the one
hand the continuation of clashes demonstrates the untenability of the status quo. In addition, the
Israeli military response helps justify the need for an international peace keeping force to protect
the population. Limited armed actions against settlements send a message to the settlers that they
cannot remain in Palestinian territory peacefully. What began as an uprising for Al-Aqsa has
increasingly become a battle against the settlements.8
Meanwhile inside the occupied West Bank and Gaza Strip a weak fractured PA was certainly not
thriving. It PA had been humiliated by the armed might of Israel (from late 2000 until the end of
2004), as the areas Israel had evacuated in the mid 1990s were reoccupied. The core of both PLO
and PA, the Fatah movement, has been riven by conflicts between its old and new guards and
between returnees from exile and local West Bankers and Gazan. It also plagued by rivalries
between the warlords who emerged from the competing security services created by Arafat. The
result is that Fatah, the political movement that has dominated Palestinian politics for nearly four
decades, has for the past few years often seemed to be paralyzed. The PA itself thoroughly
dominated by Fatah, was accused of corruption, and nepotism. Beyond these damaging
criticisms the effective monopolization of power in the PA by Fatah never brought unity and
discipline to the Palestinian politics scene. This was true even before the January 2006 election
for the PLC (Palestinian Legislative Council). 9
The Palestinian election gave Hamas, Fatah main rival, a sweeping victory in one of the most
democratic exercise ever took place in the Arab world. Hamas controlled the Parliament (PLC)
and a Cabinet headed by the Prime Minister. Israel and the U.S. reacted by announcing a policy
of isolating and destabilizing the new government, Gaza is effectively isolated and every effort is
made to block humanitarian funds to Palestinians. 10
Commercial liberalism?
The declaration of Netanyahu about potential impetus that ― economic peace‖ can give to
negotiations over permanent settlement between Israel and PLO have been received by a
complete disagreement from Palestinians, and a huge criticism from some Israeli. International
circles kept silent, but asked about the theoretical foundation of Netanyahu’s proposal. Jet, some
argued that Netanyahu want to avoid placing the core issues on the agenda. This paper try to find
a theoretical, or empirical data support the idea presented by Netanyahu.
8
9
Tamari, Hammami, Ibid
Khalidi, R. The Iron Cage 2006. Ibid
10
Carter, Jimmy. Palestine Peace not Apartheid 2006
7
Of the critics who actually relate to the core idea, some have argued that it is naïve to think that
economic issues can affect the development of negotiations over a disagreement that run so
deeply. This position sum up a basic position of political realism ,which states the issue of low
politics can not significantly affect significantly the foreign policy or high politics.
However, on the other side, some disagree with this position and try to point to some recent
academic studies that have tried to promote that economic growth and economic
interdependence are factors can reduce the probability of violence confrontation between nations.
The theoretical origins of most of these studies – commonly labeled studies of ―commercial
liberalism‖ – are those informing Netanyahu’s program. However, similar starting points are not
necessarily proof that the formal research models and the empirical evidence displayed in the
academic research can support the prime minister’s analysis.
Economic peace: theoretical foundations
Although it is possible to point to a long line of classical liberal thinkers in the last three
centuries who argued that economic interdependence and growth can positively affect political
relations between states, it is only in the last thirty years that research has attempted to test the
claim and support it with firm theoretical and empirical underpinnings. Most of the research on
the topic focuses on the issue of the alternative costs involved in the conflict, or in simpler
words: what states and their citizens are liable to lose by taking violent steps( Keliman 2004).
Proponents of commercial liberalism assume that economic cooperation between two states
increases their absolute economic welfare, and therefore raises the alternative costs involved in
political confrontations. The deeper the economic cooperation, the more the economic welfare of
both sides grows, thus dampening their enthusiasm for taking steps that are liable to interfere
with regular economic activity. An analysis of Netanyahu’s statements reveals that the issue of
alternative costs is a central component of his idea of economic peace. At the 2008 Herzliya
Conference, he noted that the economic reality of the West Bank ―is liable to lead people to think
that they have nothing to lose, and the road from here to terrorism is short.‖11 According to
Netanyahu, there is a great deal of evidence for cases where promoting economic issues has
contributed to paving the way for political peace between two hostile sides.
The growth of globalization processes has been accompanied by a great number of academic
studies try to assess the lnk between economic growth and violent conflict(Humphreys ,2003).
Nearly all the quantitative studies have in fact succeeded in locating a negative correlation
between economic interdependence and conflicts.12 However, the dependent variable in these
11
Netanyahu has represented his idea of “ economic peace” in many occasions. But he talked in details and make
it more officially in Hertzilya conference last year.
12
see Edward Mansfield and Brian Pollins, “The Study of Interdependence and Conflict: Recent Advances, Open
Questions,and Directions for Future Research,” Journal of Conflict Resolution 45, no. 6
(2001): 834-59.
8
quantitative studies is violent confrontations between states. In other words, the thrust of the
theoretical underpinnings supports the claim that economic growth or cooperation between states
reduces the probability that they will go to war with one another, but does not address the
possibility of these economic elements leading to conclusions of peace treaties.
While it is true that there are academics work focus on specific case studies, specially examples
of Western Europe states that demonstrate the deepening of economic integration spilling over
into expanded cooperation in broader fields, the ability to generalize from these studies is
tenuous (Fledman 2005).
In case of West European countries, which were under Soviet threat and signed a peace treaty
before economic cooperation began. Can this example be used to conclude that promoting
economic cooperation will necessarily contribute to political cooperation?. The problem with
generalizing from a specific case is what prompted the quantitative research on the subject. And
in any case, both the quantitative and the qualitative studies focus on the interactions between
pairs of states, but do not discuss the cases in which one of the actors has yet to achieve political
independence.
According to the basic model, decision makers strive to raise the aggregate value of their
countries, and will therefore not initiate a violent conflict when the profits are lower than the
costs.13 The costs of a conflict are partly the result of loss of economic activity resulting from
cooperation with the enemy state. This is the main reason that expanding economic cooperation
reduces the incentive to initiate a conflict. However, that does not mean that reducing incentives
is always enough to prevent the eruption of violence. States will choose violence when the
potential marginal benefit of a conflict outweighs the marginal costs caused by the conflict’s
damage to economic cooperation. That is, even the model most closely identified with
commercial liberalism indicates that along with the economic potential inherent in cooperation
between two sides, the importance of the interests that the sides believe they can advance
through violence must be tested.
In order to explain the outbreak of second Intifada ,proponents of the model would claim that
Palestinians believed after the failure of second Camp David summit ,taking violent steps to
promote goals that could be gained more using violence than economic growth (Feldmann,
2005). However, proponents of this model would clarify that these parameters are not
unchangeable static factors. Therefore, launching moves that would create growth on the West
Bank and therefore raise the costs of a future conflict with Israel – alongside steps that would
reduce the belief that it is possible to attain successes through violence can indeed reduce
violence between the sides.
13
The model being cited was developed in 1980 and almost all quantitative studies on the subject cite it as the
basis for presenting their hypotheses: Solomon Polachek, “Conflict and Trade,” Journal of Conflict Resolution 24,
no. 1(1980): 55-78.
9
Netanyahu claims that ―economic peace relies on two forces, Israeli security, and market forces‖.
He is expressing that in principles. He claims that economic peace would not make political
negotiation , rather would create conditions for them to mature. The rationale behind the models
of economic liberalism supports this claim only to a limited extent, because it does not formally
explain how reducing violence and expanding cooperation lead to a compromise on core political
issues. However, even if we assume that reducing violence is a necessary condition for political
negotiations between the sides, the model refers to interactions between states and has not been
applied to cases in which one side has yet to achieve independence.
Fayyad’s plan : An alternative
As Netanyahu’s idea of economic peace was received with suspicion and scorn by many in the
international community, the emphasis on the economic dimension in Fayyad’s program for
nation building received much favorable interest among many in the West. After Fayyad made
his program public in August, Thomas Friedman, who popularized the idea of commercial
liberalism when he coined his ―Golden Arches Theory‖ (the assumption that two countries with
McDonald’s franchises will not go to war with one another), coined a new term that is beginning
to gain popularity: Fayyadism14.
Fayyadism refers to the ability to realize political goals through rapid economic development of
the West Bank that would be accelerated thanks to increased transparency and efficiency of
institutions. Constructing effective, efficient governmental institutions meeting Western
standards would raise the level of attractiveness of the West Bank to foreign investors, and
enable the laying of the foundations of a market economy. The combination of functioning
institutions and a market economy would create the infrastructure for the future Palestinian sate.
The quick rise in the standard of living on the West Bank would present an alternative to Hamas’
governance because it would clearly emphasize the profits inherent in abandoning the notions of
Islamic rule.
There is much overlap between Fayyad’s plan, and Netanyahu’s economic peace term. First both
express the hope that market forces and economic growth can achieve political goals. Their ideas
want to avoid using violence in the future. Second, both ideas refers to building an bureaucratic
institutions to ensure Palestinians rights and improve their quality of their life in the West Bank.
However, while Netanyahu urged that creating a reality of economic freedom and security in the
West Bank is what will allow the Palestinians to sit down and start discussing real peace,
Fayyad’s program is meant to create the conditions for establishing a de facto Palestinian state
by 201215.
14
Thomas L. Friedman,” Green Shoots in Palestine,” New York Times, August 4, 2009,
http://www.nytimes.com/2009/08/05/opinion/05friedman.html.
15
Fayyd’s speech at Palestinian information center ,January 2010.
10
The paradox between Fayyadism and Netanyahu’s ideas undermine the basic concept of
commercial liberalism that support the claim that advancing economic cooperation, and
creating conditions for swift economic growth in the West bank will by that time facilitate
reaching a peaceful settlement.
Achieving fast economic growth and building market economy will for sure lessen Palestinian’s
willingness to engage in violent struggle against Israel. Yet, if there is economic growth without
political development, this will encourage Palestinians to take unilateral steps that from Israeli
point of view considered provocative. An improved security, government, and economic
situation in the West Bank bolsters the popularity of Fayyadism among Western thinkers, who
might encourage international elements to support a Palestinian unilateral declaration of a
state(Feldmann 2009).
Implementations of the two models
An analysis of the economic development in the West bank indicates that both Fayyad’s
government and Israeli government taking steps towards implementation of their plans. These
steps are being presented as policy implementation of economic peace. This policy have
contributed to the economic improvement, security situation . Many international organizations
have notices and reported that, and listed that building up a bureaucratic institutions in the West
Bank going very well, and it allow for renewed growth.16 Yet, International organizations call
for more flexibility from Israeli side, they ask for removal of blockades, and lifting the siege over
the Gaza strip.
Recovery from the global recession and improvement in Israel’s economy also contribute to a
strengthened West Bank economic situation because they increase Palestinian exports and the
scope of foreign assistance. The renewed growth in foreign aid, representing more than one
quarter of Palestinian gross local product, will allow the PA to continue paying salaries in the
coming months and even increase government spending on investments in infrastructures
without creating irregular deficits.However, the current improvement in economic indicators
does not demonstrate a higher standard of living or the achievement of sustainable growth.
Government investments in infrastructures and the current rate of foreign investments are not
enough to ensure that the West Bank economy continues to grow at a reasonable rate over time.
Interest on the part of foreign companies must increase significantly in order to create a market
economy in the West Bank that can ensure sustainable growth. The penetration of foreign
companies focusing on the industrial sector, as well as the institutionalizing of trade relations
with companies specializing in supplying input for industry are the requisite factors for
establishing an export sector that allows the Palestinians to reduce their dependence on Israel and
foreign donations. 17 However, in order to achieve this there is an initial need for closer
16
17
Transparency international, Amnestry report,and UNhuman development report 2009.
Palestinian Economic Bulletin, Portland Trust, Issue 33 (June 2009).
11
cooperation with Israel over both security and economic issues. The removal of individual Israeli
roadblocks increases freedom of movement and therefore contributes to a growth in personal
consumption and economic activity, but investors looking to make long term investments must
be convinced that there will not be a regression in terms of freedom of movement in the West
Bank. Similarly, the rate of foreign investments will not increase significantly if foreign
companies have reason to believe that the instituting of transparency in the bureaucratic
establishment is unlikely to gain further momentum.
Conclusion
It is apparent to most observers not only that the Palestinians are a people with clear national
rights, but that for all their material weaknesses, and their lack of a state, they are nevertheless a
significant factor in the Middle East.
One can debated precisely who deserved the credit for putting the Palestinians back on the
political map and bring them from the brink of oblivion. However some would say that the
revival in the salience of the Palestinians was mainly the result of persistence and perseverance
of the Palestinian people and their stead fastness and their stubborn refusal to cease to exist in the
face of the extraordinary pressures on them to disappear. It would therefore seem that just as
Israel is a reality which Palestinians must accept, Palestinian nationhood is a reality which Israel
must accept. As Israel is here to stay, Palestinians are here to stay. It will be a tragedy - for the
Israelis the Palestinians, and the world, if peace is rejected and a system of oppression, apartheid
and sustained violence is permitted to prevail.
For now, one may conclude that continuing short term growth processes in the West Bank as
well as laying the initial foundations for attaining sustainable growth depend on close security
coordination between the PA and Israel and the rate of reforms in Palestinian government
institutions. Because the economic dimension is a decisive component of Fayyad’s program for
establishing a state, and because economic growth in the West Bank is in Israel’s best interests,
there is a possibility of promoting cooperation that would to some extent raise the standard of
living on the West Bank even in the absence of progress of the political negotiations.
Making such moves is crucial because an improved West Bank economic situation promotes the
alternative to Hamas rule and is likely to contribute to calm on the security front. However, one
must not err in hoping that these processes alone are the central key to a political breakthrough. It
is precisely because the economic dimension and other issues of ―lower politics‖ are gaining
momentum on the Palestinian agenda and in international discourse that the assumption that
exclusive focus on economic cooperation will spill over to political peace in the future is flawed.
Not only does an Israeli focus on economic cooperation in the absence of political negotiations
not contribute to the maturation of conditions for future political negotiations between the sides;
it is also liable to give the Palestinians an opportunity to take unilateral steps that can reduce
Israel’s scope for political maneuvering.It is necessary that International organization help both
12
Israeli and Palestinians to reach a political agreement simultaneously with an impetus and
incentives of economic growth. I think, the conflict is more politically, and have a religious
dimension which in my opinion needs more considerations.
Finally, Israel should not use security as a pretext to escape from their commitment in political
and economical agendas according to international resolution of UN. I think, these resolutions
can help achieving economic growth as well as achieving political goals.
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