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Report Finds A Two-State Solution Is The Best Economic Option For Israel And Palestine

new report from RAND Corporation indicates a two-state solution between Israel and Palestine would generate $123 billion in growth for Israel over a 10-year period.

Moral arguments about the need for sovereignty and self-determination haven’t broken much ground, but some peace advocates hope both sides might be more willing to come to the table to create an independent Palestine if the resulting arrangement would generate major economic benefits.

An independent Palestine is just one of the four hypothetical scenarios listed, in which net benefits and costs are projected into the future, although it stands as the best economic option. Under that arrangement, average per capita income on the Palestinian side over the next decade would increase by $1,000, or 36 percent. For the Israelis, that number jumps to a higher absolute amount of $2,200, but the percentage increase is lower at 5 percent.

Other alternatives include coordinated unilateral withdrawal by Israel from the West Bank, withdrawal absent Palestinian coordination, and non-violent Palestinian resistance to Israel. Unilateral withdrawal implies the voluntary removal of 60,000 settlers, with the international community paying up to 75 percent of the costs. This scenario would produce $10 billion for the Palestinians. Without coordination, owing to Palestinian resistance to international organizations, Israel would actually lose $20 billion because only 30,000 settlers would willingly leave. Israel would have to foot the entire bill. Security costs would still remain high.

Non-violent resistance from Palestine, including international and economic pressure, would cause Israel to lose $80 billion, but Palestinians would lose $12 billion, if current trends carry forward. This might entail boycotts and sanctions, prompting Israel to limit work permits for Palestinians and throw up internal and external trade barriers.

The study, produced by researchers from Israel, the Palestinian Authority, the United States and Europe, comes a year after an extended Israeli incursion into what’s deemed Palestinian territory in the Gaza strip. Israeli troops have withdrawn, but tensions remain high, and researchers also noted the protracted consequences of alternative scenarios involving violence after interviewing 200 officials in the region.

For example, a Palestinian uprising could cost Israel $250 billion, mostly driven by lost tourism and increased military expenditures and prices. Palestine’s GPD would likely collapse by up to 46 percent.

“We hope our analysis and tools can help Israelis, Palestinians and the international community understand more clearly how present trends are evolving and recognize 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.

RAND researchers sent the results to Israeli officials at the Foreign Ministry and Palestinian Finance Ministry.

Back in 2009, Israeli Prime Minister Benjamin Netanyahu came out in support for a two-state solution, but in March of this year, suddenly shifted his long-held stance. His justification is that he became convinced that an independent Palestine would create a power vacuum just waiting to be filled by the forces of radical Islam.

He flipped again to his original position almost immediately following the election.

“I remain committed to the idea that the only way we can achieve a lasting peace is through the concept of two states for two peoples,” Netanyahu said, according to Haaretz. “A demilitarized Palestinian state that recognizes the Jewish nation-state of Israel.”

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