Economic union

The UN Partition plan that formally created the basis for the two-state solution, (UN Resolution 181, 29 November 1947) was officially termed: Plan of Partition with Economic Union. In Article “D” of the resolution, detailed steps were proposed to implement the unification and harmonization of the economies of the Jewish and Arab communities living between the River and the Sea. Some of the specific details of that plan are quite interesting and still relevant. They are listed below with my comments between brackets:

2. The objectives of the Economic Union of Palestine shall be:

(a) A customs union (under Oslo, the Palestinians were forced into the Israeli customs envelope – not quite a union in that there is no joint decision making, but with the same systems and rates of customs, the basis exists for such a customs union); (b) A joint currency system providing for a single foreign exchange rate (the Palestinian Monetary Authority, a kind of Central Bank, monitors Palestinian banks but has no separate currency to manage; the Palestinians use the Israeli shekel); (c) Operation in the common interest on a non-discriminatory basis of railways; inter-State highways; postal, telephone and telegraphic services, and port and airports involved in international trade and commerce (we share many of the same roads, albeit since 2001 Palestinian vehicles cannot enter the State of Israel, but nonetheless, this can easily be implemented); (d) Joint economic development, especially in respect of irrigation, land reclamation and soil conservation (another provision which could easily be implemented in full if Palestinians were granted more rights to be part of genuine decision making); (e) Access for both States and for the City of Jerusalem on a non-discriminatory basis to water and power facilities (access of course does not exists under claims of “security” limitations, water is controlled entirely by Israel as is power – but both water and energy developments are largely dependent on cross-border cooperation).

3. There shall be established a Joint Economic Board, which shall consist of three representatives of each of the two States and three foreign members appointed by the Economic and Social Council of the United Nations… (This would certainly help to mitigate the lack of trust between the parties and its impact could go far beyond economic development).

The resolution goes into great detail on how to implement it following the end of the British Mandate. The resolution was of course not accepted and two states have not yet been established. Despite the binational one-state reality that has existed since June 1967, the Palestinian economy has been assumed into the Israeli economy but there is no economic union. The economic and social gaps that exist between Israeli and Palestinian economies, which are so close to each other in such a small geographic space are just one of the many reasons for the continued existence of so much animosity from the Palestinians side towards Israel.

There seems to be no immediate possibility for political negotiations between the parties at this time on the partition of the land into two states, yet much could easily be done economically that could lead to an economic union with the Palestinians, that could also easily become transformed into a wide economic zone that Jordanian Prince Hassan (the late King Hussein’s brother) termed WANA – West Asia-North Africa, running from Marrakesh to Bangladesh. An economic union would not preclude the final status of the territories as it could be appropriate for a two-state solution, a one-state solution, a federation or even a confederation.

Today, according to the World Bank, GDP per capita in Palestine is about $3000. GDP per capita in Israel today is about $40,000! That is a huge gap to close. Unemployment in Palestine is above 25% in the West Bank and above 50% in Gaza (70% of youth in Gaza). But the Palestinian education system has expanded dramatically in the past decade. Two striking factors are impacting real potential economic growth there: increasing numbers of Palestinian students studying mathematics, computer science, and engineering. The West Bank and Gaza together have 14 universities, an open university for distance learning, 18 university colleges and 20 community colleges. But according to the Palestinian Central Bureau of Statistics 37.8% of male graduates and 72% of female graduates were unemployed in 2017.

Palestinian-American businessman Sam Bahour recently published a paper in the Internet magazine CounterPunch under the title “Israel’s Mockery of Security: 101 Actions Israel Could Take” (November 14, 2018). Bahour notes in his introduction: “Before offering the list, I must state upfront and clearly, my goal in presenting these ideas is not to assist the powers-that-be to design an embellished military occupation intended as permanent. Rather, my purpose is to reveal Israel’s underlying intentions, its indefinite time frame for continued domination, and the cornucopia of diverse types of actions carefully calculated to humiliate each and every Palestinian, while structurally blocking a path to Palestinian statehood, otherwise known as the two-state solution. That noted, for those who simply cannot fathom the notion of a Palestinian state free from Israeli occupation, I welcome all efforts to get my list addressed while the occupation continues, which would align Israel’s actions somewhat better with the law of occupation, the Geneva Convention Relative to the Protection of Civilian Persons in Time of War (Fourth Geneva Convention, 12 August 1949).”

I concur with Bahour and suggest that the ideas of seeking to create economic union presented above are not aimed at continued domination of the Palestinians by Israel, but rather as a means to seek equality between all of those living in the geographic area between the River and the Sea prior to being able to determine political borders that characterize our different identities. The lack of progress in negotiating peace and the lack of opportunities for young Palestinians to fulfill their dreams has in the current period led many of those young people to focus on their educations and their careers. Yet the economic gaps between Israel and Palestine are unfathomable and destructive and we must address this difficult reality.

The frustration of the aspirations of so many Palestinians does not bode well for the Palestinians nor for Israel. Perhaps we should, for the time being, go beyond the argument of one state, two states, three states or more and focus on creating economic equality and opportunities. These measures would be positive for all of us and perhaps could even help to bridge political gaps.

The writer is a political and social entrepreneur who has dedicated his life to the State of Israel and to peace between Israel and her neighbors. His latest book In Pursuit of Peace in Israel and Palestine was published by Vanderbilt University Press.