​Peace between Israel, Palestine could bring $173bn in economic benefits – study

A Palestinian girl lifts her brother as she plays with him on a beach on the Mediterranean Sea, off the coast of Gaza City (Reuters/Mohammed Salem)
Peace between Israel and Palestine could lead to huge financial benefits. A new study says Israel would gain $123 billion over a decade, while Palestine would gain $50 billion. Violence would lead to losses of $250 billion and $46 billion, respectively.

Thestudy, conducted by US-based research organization RAND Corp, involved two years of research into the costs of the Israeli-Palestinian conflict. Some 200 officials were interviewed from the region and elsewhere.

According to the findings, Israel would stand to gain a staggering $123 billion over the course of a decade, if the two sides were at peace. Meanwhile, Palestine would gain $50 billion.

Unsurprisingly, violence and war would have the opposite impact on the two sides.

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Over a decade, the Israeli economy would lose some $250 billion (slightly less than its 2014 GDP) in foregone economic opportunities if a violent uprising took place. It would cost Palestine $46 billion (more than three times its 2014 GDP).

The research looked into five different scenarios for Israel and Palestine: a two-state solution, a coordinated unilateral withdrawal, and uncoordinated unilateral withdrawal, non-violent resistance and a violent uprising. The financial benefit for both sides dropped as each of the possibilities were analyzed in that order.

“A two-state solution produces by far the best economic outcomes for both Israelis and Palestinians,” said Charles Ries, co-leader of the study and vice president, international at RAND.

Ries said that Israelis would see their income rise by an average of about $2,200 in a decade, and Palestinians would see a $1,000 gain – but noted that the increase is a much more significant rise for Palestinians. The change for Israelis would be about five percent, compared to 36 percent for Palestinians.

This means that“Israelis have far less and Palestinians far more economic incentive to move toward peace,”he said.

RAND devised a “cost-of-conflict” calculator for both Israel and Palestine. For Israel, it factored in the country's defense budget, trade relations, and what it would cost to relocate West Bank settlers. For Palestine, it considered potential destruction of property, freedom of movement, and banking regulations.

The study's authors hope the findings can help Israel and Palestine understand that peace is the way forward.

"We hope our analysis and tools can help Israelis, Palestinians and the international community understand more clearly how present trends are evolving and recognize the costs and benefits of alternatives to the current destructive cycle of action, reaction and inaction," C. Ross Anthony, co-leader of the study and director of RAND's Israeli-Palestinian Initiative, said in the report.

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However, RAND maintains that it is not advocating for a particular political solution, but rather providing tools for leaders to make good decisions, AP reported. A team from the think-tank is currently presenting its findings to both Israeli and Palestinian officials in the region.

Israeli and Palestinian officials have so far declined to comment on the study.

Last week, US President Barack Obama warned that Israeli Prime Minister Benjamin Netanyahu's inconsistent views on Palestine could cost Israel its world “credibility.”

Obama was referring to Netanyahu's pre-election vow earlier this year, which claimed he no longer supported a two-state solution. However, he quickly backpedaled on the issue. In one of his most recent comments, Netanyahu claimed he supported a creation of a Palestinian state, calling for peace talks to resume.

Israel and Palestine have been fighting on and off for decades, since Israel began occupying Palestinian territories in 1967. Third-party countries have worked to facilitate peace agreements, though nothing has worked.

More than 2,100 Palestinians died in last year's Gaza war, mostly civilians. Sixty-seven Israeli soldiers and six civilians inside Israel were also killed.