Israel-Palestine peace deal ‘would be worth billions’

Israelis and Palestinians would gain billions of dollars from making peace with each other, while both would face daunting economic losses in case of other alternatives, particularly in case of a return to violence, according to a study.

The Rand Corp, a US-based nonprofit research organisation, interviewed some 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 $120bn over the course of a decade. The Palestinians would gain $50bn, marking a 36% rise in their average per-capita income, the report said.

In contrast, the Israeli economy would lose some $250bn in foregone economic opportunities in a return to violence, and the Palestinians would see their per-capita GDP fall by as much as 46%, the report said.

“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 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 co-ordinated unilateral withdrawal; an unco-ordinated unilateral withdrawal; non-violent resistance; and a violent uprising. The economic benefit for both sides dropped considerably in each alternative down the ladder.

The study found Israelis could lose $80bn and Palestinians could lose $12bn relative to current trends. However, 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 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.

The researchers devised a ‘cost-of-conflict calculator’ that factored in issues such as Israel’s defence budget, its trade relations, and what it would cost to relocate settlers. For Palestinians, variable costs included potential destruction of property, freedom of movement, and banking regulations.

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