Israel & Palestine ‘£111bn better off’ with peace

An ultra-orthodox Jewish man passes Palestinians sitting in a coffee shop in Jerusalems Old City. Picture: AP

Both would face daunting economic losses in the event of other alternatives, particularly a return to violence.

The Rand Corporation a US-based, non-profit, research organisation, interviewed about 200 officials from the region and elsewhere during more than two years of research into the costs of the Israeli-Palestinian conflict.

Its main finding was that following a peace agreement, Israel and Palestine stood to gain $170 billion (£111bn) over the course of a decade – the Israelis stood to gain $120bn and the Palestinians would gain $50bn, marking a 36 per cent rise in their average per capita income, the report said.

In contrast, the Israeli economy would lose some $250bn in lost economic opportunities with a return to violence, and the Palestinians would see their per-capita gross domestic product fall by as much as 46 per cent, the report said.

The findings are in line with long-time arguments that peace is in the economic interest of both sides.

“We hope our analysis and tools can help Israelis, Palestinians and the international community understand more clearly how present trends are evolving and recognise the costs and benefits of alternatives to the current destructive cycle of action, reaction and inaction,” said Ross Anthony, co-leader of the study and director of Rand’s Israeli-Palestinian Initiative.

The study looked into five different scenarios: a two-state solution, a co-ordinated unilateral withdrawal, an unco-ordinated unilateral withdrawal, nonviolent resistance and a violent uprising. Not surprisingly, the economic benefit for both sides dropped considerably in each alternative scenario down the ladder.

Some of the elements of the non-violent resistance scenario are already unfolding, with Palestinians taking actions to put economic and international pressure on Israel.

The study found that Israelis could lose $80bn and Palestinians could lose $12bn relative to current trends. But compared with a two-state solution, losses from the non-violent resistance scenario become even more dramatic: about $200bn for the Israelis and $60bn for the Palestinians.

Rand teams are in the region, presenting their findings to Israeli and Palestinians officials. The study was funded by an independent donor and the think-tank said it was not advocating, just providing tools for leaders to make good decisions.

In reaching their conclusions, researchers devised a “cost-of-conflict calculator” that factored in issues like Israel’s defence budget, its trade relations and what it would cost to relocate West Bank settlers. For Palestinians, variable costs included potential destruction of property, freedom of movement and banking regulations.

The Palestinians seek the West Bank and Gaza Strip as part of their future state, yet numerous rounds of peace talks have been unsuccessful.

“A two-state solution produces by far the best economic outcomes for both Israelis and Palestinians,” said Charles Ries, co-leader of the study and an executive at Rand.