Accounting for the Benefits of Mideast Peace

http://www.nytimes.com/2015/06/13/opinion/accounting-for-the-benefits-of-mideast-peace.html

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In the endless Israeli-Palestinian conflict over claims to disputed land, what has been mostly lacking is a hard-nosed calculation of the benefits of peace, the costs of war and the gray zone of the status quo. A report published this month by the RAND Corporation, a nonpartisan think tank, attempts to offer that.

The RAND researchers looked at five possible scenarios. At one end of the spectrum is a negotiated peace agreement leading to two sovereign states existing side by side, with the Palestinian state in the West Bank and Gaza. At the other end of the spectrum is a return to some kind of sustained state of violence.

It should come as no surprise that a two-state solution, and the stability it presumably would bring, makes both sides winners. Israel’s economy would gain $123 billion over the next decade, with per capita income rising $2,200, or 5 percent, the researchers calculated, while the economy of an independent Palestine would grow by $50 billion, with per capita income rising about $1,000, or 36 percent, on average.

Among the assumptions underlying these conclusions are the return of 100,000 settlers from the West Bank to Israel, with relocation costs paid by the international community, and a tripling of Israeli trade with Arab countries in the Middle East. Over all, the study shows, Palestinians have more economic incentive than Israelis to make peace.

By contrast, a return to violence is projected to cause a 46 percent drop in per capita gross domestic product in the West Bank and Gaza by 2024, while Israel’s would decline by 10 percent. Israel’s military spending would rise 3 percent a year and tourism would drop by 25 percent.

Two of the three scenarios that lie between war and peace involve various forms of Israeli withdrawal from the West Bank that fall short of a negotiated peace settlement and a two-state solution. These are harder to quantify. The third scenario — essentially, the status quo plus nonviolent resistance by the Palestinians — is already underway, as Palestinians decide how they will exercise their membership in the International Criminal Court and press their case for membership in other United Nations agencies. They also are pursuing economic pressures against Israel under the boycotts, divestment and sanctions, or B.D.S., campaign.

The researchers said this resistance approach could cause a 2 percent drop in Israel’s G.D.P. and a 10 percent decrease in investment and in tourism. Palestinians could suffer from Israeli retaliation and the loss of an estimated 30,000 permits for Palestinians who work in Israel.

Given the political climate in Israel, where the new hard-line government appears implacably hostile to a two-state solution, there is no prospect of a quick revival of peace talks. That reality was reinforced this week when Israel’s defense minister, Moshe Yaalon, said he did not believe that a Palestinian state could be achieved in his lifetime. The RAND report offers one useful measure of what is being lost.