Our joint Palestinian-Israeli journal started publication over five
years ago with an issue devoted mainly to "peace economics." This
was in the period immediately following the 1993 Oslo agreement
between Israel and the PLO. Now, after some six years of ups and
downs in Israeli-Palestinian relations and negotiations, it is time
to publish another issue on this topic - Peace Economics Revisited.
This is the theme of most of the articles in the Focus
Section.
There are two basic approaches to conducting economic relations
between our two entities or states: integration or separation. In
the past, from 1967 until Oslo, there was integration - albeit a
totally inequitable one, which caused the Palestinians long-term
damage: fiscal drain, infrastructure misdevelopment and restricted
competition with Israel. See Gideon Eshet's paper on the unfair
nature of relations between Israel and the occupied territories.
Samir Huleileh maintains that, due to political and security
considerations, Israel's policy on the ground was prejudicial to
the spirit and letter of the Paris Protocol and damaging to the
Palestinian economy. Whatever the way to be taken, the
reconstruction and strengthening of that economy is an essential
element in the peace process.
From its inception, the Palestine-Israel Journal has supported
cooperation between Israel and the Palestinians; this has been
reflected in the articles published on many aspects of the conflict
over the years. Nevertheless, there are real economic issues to be
decided, not only by the supporters of the Journal, but by the two
entities. Professor Ezra Sad an illustrates the advantages to the
Palestinians of "equitable integration" as the best solution, but
he does not eliminate "second best" solutions. He concentrates on
the labor market. Several writers have pointed out the relative
size of the two economies, with that of Israel exceeding that of
Palestine by a factor of twenty. The Palestinian economy is highly
dependent on Israel for imports, exports of labor, services and
infrastructure. Most of the writers here argue for Israeli aid and
support f_C?~ .the Palestinian economy. Some of the writers see the
ultimate aim cif tnt:d:>alestinian economy in the context of
self-reliance and independence, while they support maintaining
economic relations on a basis of mutual consideration and
equity.
One important paper is the executive summary of the EPS Model
(Economic Permanent Status), which is a joint project of the ECF
(Economic Cooperation Foundation), on the Israeli side, and DATA
(Data Studies and Consultation) and the HCIF (Higher Commission for
Investment and Finance) on the Palestinian side. It was sponsored
by the Government of Norway during 1998 and presents a model for
long-term Israeli-Palestinian economic relations. One significant
aspect is its "shared vision of political separation and economic
cooperation, based on partnership for growth and development,
especially of the Palestinian economy." The Model tackles the
question of Jerusalem and states that it " shall be an open city
and the freedom of movement between the two states shall be
guaranteed." The EPS Model suggests a framework that is more
cooperative than the free trade agreement model (FTA) and less
integrative than the customs union model (see the
round-table).
The annual Mideast conference (Casablanca) should bear more fruit
now that there is some progress between Israel and the Palestinians
and signs of progress with Syria and Lebanon. The peace process and
the revival of a climate of investment go hand in hand.
In this context, the European Union is interested in a peaceful and
stable Middle East in which it can, and will, invest. The support
and external aid will help in the development of all the
populations of the Middle East. Central to this is the development
of closer political and economic relations between Israel and
Palestine. This is the core of the Journal's approach in examining
the economic aspects of the conflict and the need to move on from
an unhappy past to a more hopeful future.