Release Bank Accounts to Nullify Refugee Status

On Aug. 14, 15, 1947, Britain partitioned its colony of India into two independent states, India and Pakistan. Both India and Pakistan accepted the partition. The partition was followed by a massive exchange of populations as large numbers of Hindus moved from Pakistan to India, and large numbers of Muslims moved in the opposite direction. Many lives and much property were lost. War began over competition for the independent state of Kashmir, where a Hindu minority ruled a Muslim majority. Despite the violence, no people on either side were designated stateless refugees with the right to return to their original homes.

On Nov. 29, 1947, the UN partitioned the British Mandate for Palestine into two independent states, a Jewish state and an Arab state. The Jews accepted the partition but the Arabs rejected it. They would not accept an independent Palestinian state alongside a Jewish state.

Arabs in Palestine attacked Jewish communities. When the state of Israel declared its independence on May 5, 1948, Arab armies from Egypt, Syria, Iraq, Lebanon, and Jordan attacked the nascent Jewish state.

Palestinians are the only people in the world able to inherit refugee status. As a result, the estimated number of Palestinian refugees has grown from about 700,000 uprooted by Israel’s war of independence in 1948 to about 5,900,000 today.

Palestinians and their advocates assert that Palestinians have a unique “right of return,” which would allow Palestinians and all of their descendants, in perpetuity, to move into homes inside Israel in which they or their families once lived. Israel respectfully rejects a Palestinian right of return.

Today, Jordan hosts 40% of all Palestinian refugees registered with the UN Relief and Works Administration (UNRWA). Jordan is the only Arab host country to have granted citizenship to Palestine refugees, while those residing in other host countries remain stateless. In 1994 Jordan became the second Arab nation, after Egypt, to sign a peace treaty with Israel. Israel can be grateful to Jordan for both actions.

In 1948 the new Israeli government froze the bank accounts of Palestinian Arabs, and never returned their money because they were not citizens of Israel. To initiate productive dialogues with Palestinians, Jordanians, and Arabs in other countries, we suggest that Israel might make the following offer to Palestinians citizens of Jordan. Israel will return the money in their bank accounts frozen in 1948, with 75 years of accumulated interest added, on the condition that each Palestinian recipient forfeit his or her status as a registered Palestine refugee, thus nullifying further claims on Israel by that recipient and all descendants of that recipient. This could be a limited time offer that would expire on Dec. 31, 2023, after which date the frozen bank accounts would stop accumulating interest. It would be interesting to see how many Palestinians would accept this generous offer by concluding that a bird in the hand is worth two in the bush. An offer to release frozen bank accounts to Palestinian citizens of Jordan might motivate Palestinians in other Arab host countries to demand citizenship in those countries in the hope that Israel would extend this offer to make them eligible also.

Prof. Sreemati Mitter, in her 2011 Harvard University doctoral dissertation in history, estimated the total value of Palestinian bank accounts frozen by Israel in 1948 was about 6,050,500 British pounds.

Using data on the website measuringworth.com, we calculate that for the 75 years between 1948 and 2023, Britain’s average long-term interest rate was about 6.32%, compounded annually. Applying the single-payment, compound-amount factor formula for computing the future value of a sum that earns compound interest of 6.32% for 75 years, the value in 2023 of 1 British pound in 1948 would be

£(1 + 0.0632) exponent (⁷⁵⁾ = £1(99.11) = £99.11.

Today, the Palestinian bank accounts frozen in 1948 would have an estimated total value of

£6,050,500 (99.11) = £599,665,055.

Using an exchange rate of $1.23 for 1 British pound on May 30, 2023, this estimated total value is about $737,588,018, nearly three quarters of a billion dollars.

The grant of Jordanian citizenship to Palestinian refugees allows Israel to argue that those Palestinian citizens can no longer be classified as refugees. The reason is that the categories of citizen and refugee are mutually exclusive, as a refugee is a stateless person, a non-citizen. By accepting citizenship, a Palestinian should lose the designation of registered Palestinian refugee and the aspirational right of return to Israel. Of course, Israel believes that all Palestinians deserve to be made citizens of their Arab host countries, but they are not eligible to become citizens of Israel.

During and shortly after Israel’s war of independence in 1948, many Sephardic Jewish citizens of Israel were forced to flee from various Arab countries with most of their wealth left behind. If a person is permitted to be both a citizen and a refugee, then Israel can negotiate with those Arab countries to return assets abandoned by the Sephardic Jews.