Starved for a Vision: Growing an Interdependent Israeli-Palestinian Economy

June 2, 2013
Share:email print

When most people envision, however skeptically, a two-state solution for Israel and Palestine, they imagine adding a Palestinian state to the Jewish one — something similar to redeeming the partition the United Nations intended in 1948. But Israel is no longer the state envisioned in 1948 — and not only because in 1967 it bit off, without quite swallowing, what was left of Arab Palestine. Palestine has no hope of becoming that kind of state either.

In 1948, the area was sparsely populated with agricultural villages and collectives, and rivalries erupted over hilltops. Today, Israel and Palestine exist in a globalized, networked, densely populated, urbanized land. North of the Negev, Israel and Palestine together are approximately the size and scope of Greater Los Angeles — less than 10,000 square miles.Israel is more like a city-state, an arc-shaped, Hebrew-speaking megalopolis of about 6 million Jews, from Beersheba to Haifa and on into the Galilee. Bending around this arc is a string of hybridized Israeli Arab cities — home to another million and a half people — many of whom percolate into the civil society as professionals and merchants and whose Arabic disrupts Israel’s urbane Hebrew cultural hardly at all.

And interfacing with this Israel is a Palestinian, Arabic state-in-the-making, increasingly integrated with the economic life of Amman. Indeed, if and when hundreds of thousands of refugees start pouring back into the area, much of the West Bank hill areas (and Jordan Valley) will look like and will have the urban density of Amman.

Demography is not simply about counting live births in ethnic groups. It is also about education and development, the distribution of professional classes — in short, the political economy of growth in a networked world, where inflow of intellectual capital is the key to creating wealth.

Israel has a GDP of about $250 billion; fully 20 percent of this comes from exporting technologically advanced solutions and components to Europe, the United States, and the Far East. Over the past decades, Israeli businesses have built intimate relationships with a myriad of global companies. Freedom has allowed them opportunities to develop talent, scope markets, import components, and learn management. They had a lot to learn after the 1980s, when the state- and Histadrut-dominated economy nearly collapsed.

Palestine, for its part, has a GDP of about $5 billion, and Palestinian cities need international donors to provide around $2 billion a year to pay teachers and police. And yet, Palestinian individuals hold more than $8 billion in bank deposits (Jordanian Palestinians have much more than $12 billion). But the banks can’t lend even half of those funds because there are not enough Palestinian entrepreneurs with plausible business plans to borrow money. The main obstacle to building an entrepreneurial base is the occupation, to be sure. An additional urgent problem is a dearth of know-how in science and high technology — even in writing business plans, for that matter. There are also not enough freedoms to develop talent or scope markets, etc.

So statehood, yes; but independence as in 1948? On the contrary, only infrastructural integration and political interdependence — regionally and globally — will enable Palestine and Israel to grow fast enough to outpace their respective social problems and inequalities. Housing stock and office space in Palestine, as in Israel, will grow up, not out. The flow of know-how and know-about into Palestine from Israel and Jordan will matter more to Palestine’s urban development than any financial capital it may receive from Western Europe or the Gulf States. Consider this: Palestine graduates about 1,200 computer technologists a year, but those graduates will need to work on large-scale projects, such as those found in the technology centers Israel has established for Intel, Cisco, and Google, if they are to develop strong competencies. Israeli medical tourism, for its part, will be far more robust if it forges partnerships with Palestinians and Jordanians, and draws clients from Dubai and Qatar.

This inevitable interdependence has immediate political consequences; negotiations over two states should anticipate moves toward greater integration — hence, confederated arrangements — to mitigate the fears each side has of the other’s “self-determination.” The jurisdictions these city-states would exercise would encompass much more than police, education, civil law, and cultural affairs — what the Palestinian Authority has hypothetically exercised under the Oslo Agreement.  Rather, these jurisdictions also would cover water and sewage, bandwidth and telecom, health delivery and control of epidemics, labor law, certification and integration of tourist services, banking and currency controls, roads and bridges, railways, construction standards, and technical university certification. In effect, we would have one big system: two nations, but one urban infrastructure. And sharing these governmental responsibilities would help Israel and Palestine to work cooperatively and grow reciprocally.

In 2008, then-Prime Minister of Israel Ehud Olmert and Palestinian Authority President Mahmoud Abbas advanced a cooperative security arrangement. They also explored new confederative institutions for Jerusalem. They agreed that the city would serve as two capitals but would be constituted as one municipality. What was that projected municipality if not a confederative institution? What was the projected international committee that would become custodian of the old city? A confederative solution could also establish an international commission to resolve the right of return of Palestinian refugees.

I am not suggesting that either side is interested in abandoning national sovereignty, nor that notions of holiness or justice under international law won’t matter. Both sides will want to build their own state. And I know that the very word “confederation” raises eyebrows. How could two peoples that seem to hate each other contemplate anything but separation?

But confederative institutions are, historically, what peoples build precisely when they do not trust one another and their economic realities do not permit separation. That is how Canada and the European Union began. That is what the global economy portends for us all. Besides, poll after poll indicates that majorities on both sides can converge on the terms of a deal, but even larger majorities do not believe that the other side wants, or can implement, a solution. All are starved for a vision.

In this sense, confederative institutions should not be thought of as a stroke of optimism but as the reverse: a way of offering two despairing peoples a chance to slip the traps of the immediate past and move together into the new political economy that awaits them. Of course, they can also resume the fight to the finish, as in Bosnia during the 1990s; Israeli settlers and Hamas leaders seem eager to do so. But this will leave us with no finish, only more dead and grieving and the same damn problem: the need not just to keep the past at bay, but the present in sight.

Share:email print
Related Topics:

Bernard Avishai is adjunct professor of business at the Hebrew University, and visiting professor of government at Dartmouth College. His new book, Promiscuous: Portnoy’s Complaint and Our Doomed Pursuit of Happiness, was just published. He is the author of The Hebrew Republic and The Tragedy of Zionism, and contributes regularly to Harper’s and The Nation.

Post a Comment

Your email address will not be published.


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>