JERUSALEM (JTA) – Israel’s economy would gain $120 billion and the Palestinian economy some $50 billion over the next decade in a two-state solution, a study has found.
A peace agreement could also see Palestinian income rise by 36 per cent and Israeli by five per cent, according to the Rand Corp. study released Monday, which also said the Israeli economy could lose some $250 billion in economic opportunities in the event of a return to violence.
The Rand Corp., a U.S.-based non-profit research organization, said it interviewed 200 officials in the Middle East and elsewhere during more than two years of research into the costs of the Israeli-Palestinian conflict.
The study also found that a unilateral withdrawal by Israel from the West Bank would impose large economic costs on Israelis unless the international community shoulders a substantial portion of the costs of relocating settlers; intangible factors, such as Israeli and Palestinian security and sovereignty aspirations, are critical considerations in understanding and resolving the impasse; and taking advantage of the economic opportunities of a two-state solution would require substantial investments from the public and private sectors of the international community and from Israel and the Palestinians.
“A two-state solution produces by far the best economic outcomes for both Israelis and Palestinians,” Charles Ries, a co-leader of the study and a Rand vice-president, said in a statement.
The study also considered the effects of a co-ordinated, unilateral withdrawal from the West Bank by Israel; unco-ordinated withdrawal where Palestinians do not co-operate with Israeli unilateral moves; and non-violent resistance by Palestinians.
The implications of a unilateral withdrawal by Israel of West Bank settlers would depend on the amount of co-ordination. If Israel were able to co-ordinate with both the Palestinians and international community, the overall impact on the Israeli economy would be negligible and the Palestinian economy would gain nearly $8 billion over a 10-year period. With no co-ordination, Israel would lose up to $20 billion, according to the study.
Under non-violent resistance, Palestinians would call for international pressure including boycotts, divestment and sanctions, which could cost Israel $80 billion and Palestinians $12 billion.
Rand used its costs of conflict calculator to figure the economic costs and benefits to Israel and the Palestinians.