JERUSALEM — Supporters of a two-state solution to the
Israeli-Palestinian conflict generally start with a moral argument: Both
peoples deserve the rights of self-determination and sovereignty; one should
not rule over the other. Lately, President Obama and liberal American Jewish
leaders also frame their case in security terms, saying Israel cannot survive as a
Jewish democracy without ending its occupation of Palestinian territories.
But how about $183 billion as incentive for a peace deal?
That is how much a new report by the RAND
Corporation says the Israeli and Palestinian economies stand to
gain over the next decade if an independent Palestine were to emerge tomorrow —
admittedly a development that might require divine intervention. It translates
to an average per capita income increase of $1,000 (36 percent) for every
Palestinian in the West Bank and Gaza Strip, and
$2,200 (5 percent) for each Israeli.
If that is not enough, RAND calculates the cost of
four other possible situations, including another violent uprising by
Palestinians, which it estimates would shrink the gross domestic
product in the West Bank and Gaza by 46 percent and in Israel by 10
percent, or $4,330 less for each Israeli, $1,130 for each Palestinian.
“The point is to demonstrate that there is money on the
table,” Charles P. Ries, a RAND vice president who was one of the leads on the report, explained in an interview. “There are big
gains, and people don’t realize how big they are.”
RAND, whose policy analyses are often underpinned by
economics, is hardly the first outfit to try to put a price tag on the
conflict. The Adva Center in Israel last week published its own report about the state’s
“self-imposed economic burden” that noted its relatively poor credit rating.
Stav Shaffir, a leftist Israeli member of
Parliament, spent much of the past two years documenting government spending on
West Bank settlements. Others have pointed to Israel’s military budget, which
as a percentage of G.D.P. is nearly double that
of the United States’ military budget. Secretary of State John Kerry had a
high-powered team draw up a $4 billion economic growth plan alongside his
failed peace initiative last year.
RAND’s two-year, $2 million, 228-page
project focuses on such “opportunity costs” of the status quo versus increased
trade and tourism, for example, in a two-state future; in fact, the researchers
surprised themselves by predicting “no change” in security spending if that
happened. They also did not expect a reduction in American government aid to
Israel, which the report put at $118 billion since World War II, not including
classified programs. (There is no parallel number for financial help to
Palestinians; when asked, an economist on the RAND team said it was less than
$10 billion.)
The report comes with an online calculator detailing its assumptions on
five possible situations — including an Israeli withdrawal from some
settlements and nonviolent Palestinian protests like the boycott and sanctions
movement gaining steam — and allowing users to make their own.
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Still, this is a conflict that has
long defied the principle that people act in their financial best interest.
“It’s a mistake to think this can be
dealt with as a mathematical equation that you solve and then you proceed to
implement it,” said Manuel Trachtenberg, a renowned Israeli economist who was
recently elected to Parliament. He declined to participate in RAND’s research.
“Money is infinitely divisible, you can have solutions or
offers that can be resolved in terms of more or less,” Mr. Trachtenberg noted.
“When it comes to rights, that’s much tougher, because that’s zero sum, there
is no compromise.”
Samir Abdullah of the Palestinian Economic Policy Research
Center called the RAND study “an academic exercise with good intentions,” but
said the benefits of the two-state solution are “an issue that everyone knows.”
Mr. Abdullah, one of 20 people RAND invited to take part in a workshop in
Athens last year, said the critical question was what would be “the
consequences of killing the two-state solution” and ending up instead with a
single binational entity.
“Of course the road for that, it maybe passes through an
apartheid regime that will cause both parties much, much suffering and much
decline in the economy and isolation,” he said. “So the cost after that, the
cost to make people ready for the one-state solution, it will be huge.”
Mr. Ries of RAND said the one-state solution would require
“an entirely different approach,” which may be precisely the point.
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