A few years ago, I had the privilege of attending a small gathering in Oxford led by Raphael Luzon, a Libyan-born Jew and prominent leader of the Libyan Jewish community. After he spoke, I asked him the sort of question that I like to ask any expert talking about the Middle East – something about the likelihood and implications of a two-state solution to the Israeli-Palestinian conflict. His response was deeply surprising.
Instead of building his answer around the usual issues of refugees and borders and security, he came out with something a whole lot more optimistic, but somehow eminently reasonable, along the lines of:
The implications of a two-state solution to the Israeli-Palestinian conflict would be huge – because if the Arabs and the Jews were finally able to work together, there’s nothing in the world that could stop them.
I was reminded of Mr. Luzon’s thought last week when I saw details of the $15bn energy deal made between Israel and Jordan. It was a stark reminder that Israel’s neighbourhood, so often viewed in Israeli and Jewish discourse as nothing but a collection of threats, could in fact be a wonderful asset.
With that in mind, let’s briefly try to put aside the emotional baggage that comes with any discussion of the peace process and focus purely on the economics of it. It would, of course, be monumentally expensive for Israel to make the changes required for a viable Palestinian state to exist. The inevitable dismantling of many settlements and a great deal of military apparatus, as well as the difficult programme of settlement evacuations that would go with it (not to mention the compensation to settlers that would follow) would all be eye-wateringly pricey. Lest we forget, the disengagement from Gaza, which involved a fraction as many settlers as a disengagement of the West Bank would, cost in the region of $1bn. Despite the fact that US and EU governments would no doubt fall over themselves to contribute to the costs of an Israeli disengagement from the West Bank, it would still be an extremely costly endeavour. We’ll put that in the ‘economic cost of peace’ pile.
Now let’s turn to the ‘economic benefits of peace’ pile.
Israel has the as yet unutilised good fortune of being situated in immediate proximity to some of the wealthiest, most ambitious, fastest-growing countries in the world. There is, of course, already a significant amount of clandestine trade occurring between Israel and some of its less diplomatically friendly neighbours, often through intermediaries. It’s well known that there are Israeli firms that trade with Saudi firms through American intermediaries, and Haaretz reports, for example, that roof shingles on artificial islands off the coast of Dubai made their way there from Israel via the Italians. However, there will simply never be normal trade relations between Israel and the rest of the Middle East without a peaceful and just resolution to the Palestinian issue.
Were Israel to make a full, permanent peace with the Palestinians, it’s probable that the Arab world would cautiously invite Israel in from the cold, and begin diplomatic and trading relations. The impact of the Arab world opening its doors to Israeli business could be truly astonishing: Israeli start-ups would prosper in the breathtakingly ambitious cities of the Gulf, with their oil and finance billions to spend and a thirst for true innovation. Israeli agro- and eco-technology could be providing food, water and energy to a region of 300 million souls who struggle with many of the same issues that Israeli tech has solved for its own population. Even Israeli security and anti-terrorism technology could be sold to governments across the region, with authorities eager to protect civilians against the very real threat of terror in Dubai and Doha just as in Be’er Sheva and Haifa.
As I say, this has nothing to do with political or emotional sentiments about the peace process or lack thereof. You do not need to be a left-winger to accept that the access to new, growing markets that could feasibly come after making peace with the Palestinians would be worth huge and potentially transformative sums of money to the Israeli economy (not to mention doing good for the region as a whole). And before you suggest that the premise of Israel having friendly relations with its neighbours is an idealistic fantasy, might I remind you that the Arab League has in the past offered Jerusalem full diplomatic relations with the entire Arab world following a two-state resolution of the Israeli-Palestinian conflict. Furthermore, the volume of business already going on between Israel and some of its estranged neighbours behind closed doors, despite the many diplomatic, economic and cultural barriers to doing so, suggests that there is a genuine desire for Israeli goods and services in the Arab world. Even if we don’t agree on the route to getting there, we can all agree that closer trade links between Israel and the region would be beneficial for all parties, and while the conflict will resolutely not be solved by economics alone, it’s important to highlight that permanent peace comes with a dividend.
In the West, ‘the Middle East’ evokes precisely two distinct (if uninformed) images – one of bloody war, and the other of fabulous wealth. A just and secure two-state resolution to the conflict could help move Israel from being part of the first picture to being part of the second.