Israeli-Palestinian Peace Will Build on the Growth of Prosperity

Despite the agreement reached at the Wye Plantation, long-term peace will not be possible without a significant improvement in the Palestinian economy.

While both Israel and the Palestinians benefit from Palestinian economic development, for various reasons there have been only limited tangible gains since Israeli Prime Minister Yitzhak Rabin and Palestinian Authority President Yasser Arafat shook hands on the White House lawn on Sept. 13, 1993.

Essentially, for the agreements reached in Maryland to succeed, Palestinians must see real improvements in their quality of life. Regardless of political agreements signed, if Palestinians do not see advancement in their standards of living, their frustration, despair and anger will increase.

Many already feel betrayed by previous agreements and have lost confidence in their leaders to assist them through this process. Just as Israelis point to the number of victims of terror attacks as proof that the process has been flawed, Palestinians focus on the decline in their economic well-being.

Since the first Rabin-Arafat signing, Israeli per capita income increased from $13,800 to about $17,000, while Palestinian incomes in Gaza have dropped by a third. Unemployment in Gaza is estimated by the United Nations to be at 37%. However, other observers report that it is even higher.

While many factors contribute to Palestinian frustration, economic stagnation remains a major cause of resentment and ultimately of violence.

It is impossible to overestimate the feeling of despair that fathers feel when they cannot support their families or when Palestinians are unable to find jobs upon completion of their schooling. When there are limited prospects for meaningful employment, students lose interest school, drop out and become fertile targets for preachers of hatred, violence and terror.

Former Israeli Prime Minister Shimon Peres said that every dollar spent on improving the Palestinian economy is the equivalent of $2 that need not be spent on Israel’s security.

There are a number of provisions in the Wye agreement that address issues related to the Palestinian economy. These are useful and should be implemented, but even more needs to be done.

The agreement calls for the development of an industrial zone on the Gaza border with Israel. When completed, the so-called Karni industrial park will employ 40,000 Palestinians within 10 years. That is one-fifth of the Gaza labor force.

The Gaza airport is the second economic project agreed upon at the Wye talks. The airport has been built, but the Palestinians were not allowed to use it until the Wye negotiations resolved issues related to its daily operation.

In addition to their obvious economic advantages, both the industrial park and the airport present security concerns.

Israelis do not object to the export of items manufactured at the industrial park or to allowing people to fly peacefully to and from Gaza. Israelis are concerned that measures be put in place to ensure that weapons, bombs and individuals who wish to commit violent acts do not enter through the airport or the industrial park.

Security arrangements for both have now been agreed upon and the Palestinians have been forewarned that failure to comply with these measures would cause the closure of the industrial park and the airport, leading to deterioration of the peace process.

The industrial park, the airport, new measures to facilitate Palestinian transit between Gaza and the West Bank and potential increases in American aid to the Palestinian Authority are all important; but these will not succeed unless the Palestinian Authority undertakes steps to improve its own economic climate.

Corruption pervades the Palestinian economy and many businesses are “required” to make payments to myriad questionable characters. Cronies of political leaders are given monopolies over specific industries, which eliminates any form of competition and hinders economic growth.

The authority has not instituted consistent procurement policies for those who wish to do business or provide goods and services. Palestinians express as much frustration in their own leaders as they have for those in Israel.

Fortunately, many legitimate projects are already underway in Gaza. For example, Vice President Al Gore helped initiate an organization called Builders for Peace to encourage Palestinian economic development as a means of furthering the peace process.

A number of the projects started under the auspices of Builders for Peace are still underway. Hopefully, the interim agreement will breathe further life into these ongoing projects.

For example, construction is underway on a Marriott hotel and convention center in Gaza. Progress has been slowed by Palestinian bureaucratic inefficiency, periodic border closures and material shortages. Ultimately this project can employ hundreds of construction workers and employ even more people in its various services when completed. The hotel, convention center and an additional telecommunications component will help spur other improvements in the entire region.

The interim peace agreements have the potential to invigorate this and many other projects that can provide legitimate employment for Palestinians, thus reducing their poverty and replacing it with achievable hopes for the future. If these economic improvements occur, the prospects for peace, for Palestinians and Israelis alike, will be furthered.