Possible benefit of carrots

Editorial

Israel is withholding $100 million in tax transfers from the Palestinian Authority in response to the non-state observer status vote at the United Nations last month. Israel sees money as a diplomatic tool, which it is, but perhaps there is a more positive way to leverage money to turn the tide toward peace in the region.

Lawrence Solomon wrote an enlightening piece in the Financial Post Dec. 15. He made the surprising assertion that peace would make good financial sense for Israel, but not for the Palestinians.

Before peace with Egypt was established, Solomon writes, Israel spent one-third of its gross domestic product on defence. By 1982, that had fallen to 25 percent and now it is down to about seven percent. (By contrast, he notes, Canada spends about 1.5 percent.) Dependable peace, Solomon suggests, would let the Israeli economy grow even more dramatically than it already is, as Israel would no longer have to sink resources into providing the civil infrastructure in the West Bank for which billions in foreign aid was intended, but which was instead frittered away by Yasser Arafat, who died with a $3 billion estate.

For the Palestinians, though, the end of the conflict would result in economic devastation, he argues. Foreign aid would likely decline. The PA has had the dubious distinction of receiving more foreign aid per capita than any other people in the world, a fact, Solomon says, that has made Palestinians among the better-living Arabs outside the oil states. Moreover, independence could end the migratory employment of the 10 percent of the West Bank workforce who are employed either inside Israel or on Jewish settlements and earn, on average, double what other Palestinians earn.

Meanwhile, a new public opinion poll of Palestinians in the West Bank and Gaza, conducted after the recent Israel-Gaza conflict by Arab World Research and Development, a Ramallah research centre, found that 88 percent of Palestinians believe that armed struggle is the best route to independence. The poll also said that West Bank residents, who are governed by Mahmoud Abbas’ Fatah, think that Hamas, which controls Gaza, has the better approach to dealing with Israel. Conversely, Gaza residents would rather be governed by Fatah than Hamas. The grass is always greener, apparently, in the terror regime next door.

That 88 percent of Palestinians see armed struggle as preferable to, or more effective than, negotiations, is horrifying ... but why wouldn’t they think so? With the reliable exceptions of Canada, the United States and a few micro-nations, the entire world has rewarded, excused and justified every incident of Palestinian violence. When the Palestinians upended the negotiating table in 2000 and began the Second Intifada, the world overwhelmingly rewarded the Palestinians for their decision. Almost never has Europe or other such parties unequivocally condemned violence and demanded peaceful negotiations as a prerequisite to continued foreign aid and diplomatic support. No wonder ordinary Palestinians think violence works.

But these numbers may reflect something the poll didn’t ask. If, when speaking of “Palestinian independence,” we mean two states living in peace, negotiation might be the reasonable approach. If, by “Palestinian independence,” respondents heard “the destruction of the state of Israel” – and for an unknown but significant proportion of the Palestinian population, that is precisely what it means – it would be foolish to imagine that Israel would negotiate itself out of existence. In this latter case, armed struggle would be the only route since, for many or most Palestinians, national liberation does not mean creating a Palestinian state, but rather destroying the Jewish one. But what if we took what we learned from these recent news stories and developed a different approach to ending this conflict?

While it is true that Palestinians have been indoctrinated for three generations with hatred of Israel – and the Oslo process recognized that this, as much as anything, was the barrier to peace – perhaps the only thing that might counter that indoctrination is if Palestinians saw their individual and collective opportunities increasing and economic conditions improving. True, as Solomon notes, Palestinians are, on average, better off than, say, Egyptians. But imagine if they were as well off as Israelis?

The global community – the United Nations, the World Bank, Europe, the United States, Israel (and, to a much lesser extent, the Arab world) – have dumped billions into Palestine, which has proved a veritable black hole for foreign aid. What if they instead effectively put in place a system where the Palestinian proto-state would be “rewarded” with incrementally increasing influxes of international cash in exchange for reaching tangible benchmarks in terms of democratization, the development of civil infrastructure, improvements in social services and other economic and social measures?

A critic might say that’s the kind of bribery we tried in the peace process and the Palestinians took the money but didn’t deliver the peace. But no, in this case, the benchmarks would have to be met before any funds are released. If, through free-trade agreements and other incentives, the Palestinian economy could be brought somewhere near the power of the Israeli economy, the results would do more than almost anything else to alleviate the ideological aspects of the Palestinian body politic. If the Palestinian leadership reneged, the negative economic impacts would be felt at the street level and the people, moderated by improved living standards – with tangible awareness of the prosperity that economic freedom and independence can bring – would know who to blame: their own leaders.

Israel cannot be faulted for withholding the $100 million this week; it is one of the few diplomatic sticks it has available. But, since nothing has worked to bring mutual coexistence and lasting peace, might it be wise now if the world came together to try carrot, rather than stick?

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