The Economic Advantages of a Trilateral Israeli-Jordanian-Palestinian Confederation
A joint trilateral confederation between Israel, Jordan and Palestine would extend over an area of more than 120,000 square kilometers, on both sides of the River Jordan. Jordan will extend over an area of more than 90,000 square kilometers, Israel over 22,000 and Palestine over more than 5,000 sq. km. in the West Bank and the Gaza Strip.
The total population living in the area of the confederation would number over 12 million, including 2.5 million Palestinian citizens of Palestine, about 4 million citizens of Jordan, and about 6 million Israeli citizens. It can be expected that within five to eight years after the establishment of the confederation, the population would rise to over 15 million.

Six Million Palestinian Residents - A Key Factor

The outstanding demographic factor in the proposed confederation is the existence of large communities of Palestinians, not only in Palestine, but also in Israel and in Jordan. The total number of residents in the states of the confederation who are considered, and see themselves, as belonging to the Palestinian people is as follows: about 5.5 million - 1 in Israel, about 2.5 million in Palestine and about 2 million in Jordan. It should be added that about half a million of Palestinians also live in Syria and Lebanon. The number of Jews is about 5 million.
From a political viewpoint, each of the three states of the confederation will be independent in all respects, each having its own (or shared) capital city and its own national administration, including government, parliament and judicial structure.
Confederation: Political Separation and Economic Unity
As against the present separation at the political level, in the economic field the confederation constitutes a united geographical area and a common market. A prominent characteristic expressing this economic unity will be found in the existence of two open borders between the three states of the confederation for the free movement of people, including workers, as well as transport, merchandise, currency, and various products and services.
An important institutional expression unique to the confederation is to be found in the existence of trilateral confederation development, and economic and social authorities. These are to be found in a series of branches of national activity, including the possibility of initiating development projects and of joint institutions. We are referring to confederative authorities for land traffic, tourism, medicine, education, culture, aviation and space, fighting drugs and crime, water, energy, agriculture and food, sports, army and security, finance, communications, computers, etc.

A Trilateral Confederation - The Correct Way to a Political-Economic Solution to the Palestinian Problem

On the one hand, a trilateral confederation assures the independence of the State of Palestine which will be established in the West Bank and the Gaza Strip. On the other hand, it holds out great prospects of settling the Palestinian refugees in Palestine and Jordan and of creating employment and speedy and impressive economic growth, which will consolidate and strengthen these states.

The Challenge of Confederation: Jordan and Palestine Can Enter the League of Developed Nations

It should be stressed that the challenge of confederation is not limited to a solution of the Palestinian problem. To this it is important to add another challenge, that of striving to add Jordan and Palestine to the league of developed nations. This means economic integration and the development of progressive business connections with the leading economic blocs in the world, e.g., North America, Western Europe and Japan.
This crucial goal is Middle Eastern and not only Jordanian and Palestinian. In order for these countries to compete successfully through implementing an ambitious strategic, economic goal of this sort, they are in need of the most rapid growth levels and a developed economic structure. This is also an Israeli state interest.
The outstanding characteristics of a developed national economy in the world today are as follows: entering global markets through special trade agreements; growth through increasing numbers of small and medium business enterprises in the leading branches of the world economy, above all, high-tech and biotech; and initiating large development projects, either independent or in cooperation with neighboring countries.
The growth of Jordan and Palestine as progressive national economies is the way to assure both their political independence, the rehabilitation of millions of Palestinian refugees living there, and also the settlement of those who will want to return from refugee camps in Syria and Lebanon.

The Challenge: Raising the Per-Capita Jordanian and Palestinian Average Income to the Present Israeli Level over a Period of Twenty Years

Before examining how to work toward these targets, it must be pointed out that we are speaking of most pretentious and ambitious national economic goals, which demand creative and innovative political and economic solutions. Nowadays, the average per-capita yearly income in Jordan and Palestine is about $2,000, as against an average of about $16,000 in Israel.
In order for Jordan and Palestine to approach this income level, their total product must reach about 100 million dollars. This means an increase of over 90 billion dollars within 20 years.
In more detail, the challenge to Jordan according to this approach is to aspire to an annual product reaching about 60 billion dollars, and for Palestine about 30 billion dollars.

The Keys to Growth in Jordan and Palestine: Aid Grants, Encouraging Small Business Enterprises, and Special Trade Agreements
In practice, such broad and dramatic growth depends upon a series of economic steps, particularly broad in their scope:
The reception of grant aids at an annual rate of 2 billion dollars from the U.S.A. and the European Common Market. These will be directed to developing the educational infrastructure, roads, housing, communications, computerization and finance in Jordan and Palestine.
Special trade agreements with the U.S.A. and Western Europe, and with other economic blocs, with the aim of assuring the free export of produce and services from the states of the confederation to world markets.
Encouraging the annual growth of thousands of new business enterprises in Jordanian and Palestinian towns and villages, in all branches of economic activity. Each of these will, on average, circulate between $100,000 and $250,000.
These business enterprises will, for the most part, be small and they will grow through local initiatives in Jordanian and Palestinian towns and villages. A minority of them will be established as extensions or large subsidiaries by tens of multinational companies in different parts of the world, which will reveal the great business potential inherent in the confederation states.

Confederation - The Incentive for Jordan and Palestine to Join Global Markets

There is little doubt that a confederal peace agreement between Israel, Jordan and Palestine will pave the way to yearly American aid to the extent of billions of dollars to Jordan and Palestine, as well as to Israel.
Parallel to this, both the U.S.A. and the European Union will give their consent to applying the special trade agreements that they have with Israel, to Jordan and Palestine as well. This will prepare the way for the opening of the prosperous markets of Western Europe and North America to Palestinian and Jordanian export, as they are open to Israeli exports. This is the way to promote the growth of thousands of small enterprises and businesses every year, and to draw in some tens of multinational companies to work with them.
The establishment of the confederation and the special world political status of the confederation as a whole and of its component states, promise it a unique economic status not enjoyed today by any state in the world: special trade agreements with three world economic blocs - the markets in North America, in Western Europe and in the Middle East. The continuation of peace agreements will undoubtedly come in the form of special trade agreements for the whole Middle East.

Confederal Development Enterprises

Confederation also means initiating and managing large joint enterprises, which will provide high-income employment to hundreds and thousands of workers with various degrees of skill from both sides of the Jordan. They will bring increasing growth in Palestinian and Jordanian buying power which, again, will contribute to speedy growth in all regions of the confederation. We are referring to a series of non-national development enterprises whose joint establishment by the three confederation states will assure their economic profitability and their financing through the mobilization of the necessary international investment capital.
The first such project will be large desalination installations, which will assure regular water supplies for all the residents of the confederation, and will facilitate the settling and flowering of large desert areas in each of the confederation states. This would involve a Dead Sea-Red Sea canal.
A second development project will be the construction of a joint traffic system of roads and railways to facilitate the free and speedy movement of vehicles and trains between all the cities and regions of the confederation.
A third project will deal with large-scale tourist enterprises, which will attract over 10 million tourists every year to the confederation states.
A fourth project will be joint recycling installations.
A fifth project will be solar and hydroelectric installations for the production of electricity in the Arava/Wadi 'Araba area and the Dead sea area.

Potential for the Growth of a Middle Eastern Economic Order

A special development enterprise proposed for the confederation is the development of the Jordan Rift on both sides of the River Jordan as a business and tourist area. It would incorporate tens of thousands of projects in various fields of economic activity, with the status of an area of free trade and production, without taxes and customs. Thus the Jordan Rift would be changed from a confrontation area into one of joint growth and development.
Over the years, with the establishment of peace between Israel and the Arab states, there are good chances that this economic and transit strip would be extended. It would then grow into an area rich in development projects and business stretching from Saudi Arabia to the south of the Red Sea and up to the Syrian border and Turkey in the north.
Such a corridor would facilitate the growth of tens of thousands of businesses and small enterprises in the many urban and rural settlements on both sides of it, linking the emerging markets of all the neighboring countries on both sides of the Syrian-African Rift. This will have far-reaching implications for the economies of Jordan and Palestine, which are located in the heart of the Rift.

Lowering Unemployment and Creating Employment Possibilities in Jordan and Palestine

Jordan and Palestine suffer from a chronically high unemployment rate. About 30 percent of the work force in these countries is unemployed. In numerical terms, this means the unemployment of over 100,000 workers in Palestine, and over 200,000 in Jordan.
Because of the special demographic structure in which millions of Palestinians are living in Jordan, Palestine and Israel, one can reasonably assume that the great majority of these unemployed are Palestinian breadwinners and workers with skills of various degrees and of all ages.
It can be added that hundreds of thousands of Palestinian and Jordanian workers are compelled to move and seek work outside their state, be it in Israel, in the Gulf states or elsewhere. With borders open to the free movement of workers and vehicles, it will be easier for these hundreds of thousands of Palestinians and Jordanians to work in Israel without the restrictions and constraints which apply today.
Moreover, in the confederation framework we will be witness to the establishment of large industrial parks along the Israeli-Palestinian border to the south and east, and to the concentration there of industrial enterprises by multinational companies that are world leaders in their branches. There will also be Israeli enterprises which will transfer their production centers from central Israel and the coastal area, and Palestinian enterprises which will also move from the densely populated Palestinian cities to these new and high-quality industrial areas. This sort of strip of industrial parks on both sides of the Israeli-Palestinian border can also make a real contribution to promising full employment and a decent income to all in need of these.

An Economic Commission to Promote the Development of the Confederation

This broad and varied development - in the fields of economy, erecting physical and human infrastructure, promoting trade, foreign investment, etc., in order to meet Palestinian needs for water, energy, transport, food, quality of life and decreasing unemployment in all the confederation states - will not come of its own accord.
Initiating each of these comprehensive economic steps behooves not only economic unity, but also economic coordination and partnership through a joint economic commission which will activate a series of joint development authorities in each of these fields of work.
In each of the development authorities of the confederation, the outstanding experts in their fields from Israel, Jordan and Palestine will be active members. Together they will crystallize and promote a series of joint projects. Outstanding people from the field of economics and business will also lead the economic commission. In this way, the commission will grow into a joint development institution for the three states of the confederation, activating and bringing together hundreds of experts from the top echelons of each state. This will contribute to generating hi-tech, well-paid employment, benefiting Palestinians and Jordanians.

From a Trilateral Confederation to a Middle Eastern Common Market

The establishment of the trilateral confederation on both sides of the Jordan means the growth of an economic market of over 15 million consumers. There are some prospects that, in the course of years, the confederation will also act as a stimulus for the formation of a Middle Eastern common market which, at the end of the process, could include over 300 million consumers.
The leading multinational companies in the world and the large economic blocs would do well to understand this, and would quickly appreciate the mighty business potential inherent in the confederation and its special economic status in the Middle East. This would be an additional reason for the confederation states to become a lodestone for large capital investments in development projects in all regions of the confederation. It would encourage a high degree of openness by the heads of the leading economic blocs in the world to the integration of the confederation states in world economic life and markets.