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Developing an Israeli Grand Strategy toward
a Peaceful Two-State Solution
straightforward to convince the Israeli public that it has a
vested interest in a prosperous Palestinian economy, both
as a natural market for Israeli goods and services and, more
importantly, as a means for securing stability and calm.
This article presented a selected set of feasible economic
measures that, if implemented, either in whole or in part,
would push Palestinian growth and development forward.
Although a political resolution (i.e. recognized and functional
borders) is necessary in order to allow the Palestinian
economy to reach its full potential, easing the restrictions and
implementing existing agreements could significantly improve
the economic outlook. In general, granting Palestinians
access to production inputs and external markets and
enabling unimpeded movement of goods, labor and capital,
as anticipated in the political agreements, would drastically
improve growth prospects of the Palestinian economy.
Unfortunately, there is no escaping the fact that currently both
sides are deeply entrenched in conflicting positions instead
of promoting constructive solutions to the many items on
the agenda which need not wait until the core issues of the
conflict are fully resolved. In agriculture, gas and electricity
and water issues, there are many opportunities to push
forward important protracted projects, at the professional
levels, without the need to wait for the political echelons.
Indeed, with the stalemate in official negotiations between
both sides and considering the political and ideological
constraints of the incumbent Israeli government, it is high
time to promote “bottom-up” initiatives on a broad basis;
if many different things happen in parallel, the combined
impact on the Palestinian economy will be substantial.
Finally, if the Palestinian economy is successful in achieving
substantial headway, coupled with the institutional capacity
necessary to sustain such headway, this would go a long
way in demonstrating to the Israeli public that its future
neighbor will not become a failed state threatening its own
wellbeing but rather a prosperous society and market open
for business and cooperation.
