Israelis and Palestinians would gain billions of dollars from making peace with each other while both sides would face daunting economic losses in the case of other alternatives, particularly in the case of a return to violence, according to a new study released yesterday.
The RAND Corp, a US-based nonprofit research organization, 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, Israelis stood to gain US$120 billion over the course of a decade.
The Palestinians would gain US$50 billion, marking a 36 percent rise in their average per capita income, the report said.
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In contrast, the Israeli economy would lose about US$250 billion in foregone economic opportunities in a return to violence, and the Palestinians would see their per capita GDP fall by as much as 46 percent, the report said.
The findings are in line with long-time arguments that peace is in the economic interests 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 recognize the costs and benefits of alternatives to the current destructive cycle of action, reaction and inaction,” said C. 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 coordinated unilateral withdrawal, an uncoordinated unilateral withdrawal, nonviolent resistance and a violent uprising. Not surprisingly, the economic benefit for both sides dropped considerably in each alternative down the ladder.
Some of the elements of the nonviolent resistance scenario are already unfolding, with Palestinians taking actions to put economic and international pressure on Israel.
The study found that Israelis could lose US$80 billion and Palestinians could lose US$12 billion relative to current trends. However, compared with a two-state solution, losses from the non-violent resistance scenario become even more dramatic: About US$200 billion for the Israelis and US$60 billion for the Palestinians.
RAND teams are in the region, presenting their findings to both Israeli and Palestinians officials. The study was funded by an independent donor and the think tank insisted 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 defense 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, but numerous rounds of peace talks have been unsuccessful.
“A two-state solution produces by far the best economic outcomes for both Israelis and Palestinians,” RAND executive and study co-leader Charles Ries said.
“In a decade, the average Israeli would see his or her income rise by about US$2,200, versus a US$1,000 gain for Palestinians, compared with our projection for present trends. But that only works out to 5 percent for each Israeli versus 36 percent for the average Palestinian, meaning Israelis have far less and Palestinians far more economic incentive to move toward peace,” he said.
RAND spokesman Jeffrey Hiday said copies of the study had been sent to officials on both sides of the conflict, including the Israeli prime minister’s office, the Israeli Ministry of Foreign Affairs and the Palestinian Ministry of Finance.
Israeli officials declined comment, while Palestinian officials could not immediately be reached for comment.
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