Researchers at the Rand Corporation's Center for Middle East Public Policy found that a two-state solution is the most profitable alternative to the ongoing Israeli-Palestinian conflict according to a new study released on Monday.
With a two-state solution, the Israeli economy would be three times greater than the Palestinian economy in one decade gaining $123 billion in GDP compared to Palestine gaining $50 billion. Yet under a peace accord, Palestinians would benefit more proportionally, seeing their average per capita income increase by 36 percent while Israelis would only see a five percent increase in income.
If Israel retreats back to the 1967 borders combined with agreed-upon land-swapping territories, 100,000 Israeli settlers relocated from the West Bank to Israel, Palestinian trade and travel restrictions are lifted and up to 600,000 refugees return to their homes in the West Bank and Gaza, a 20 percent increase in tourism and 150 percent increase in Palestinian trade would be among the significant and immediate economic booms.
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On the contrary, the study found that the most expensive alternative for both Israelis and Palestinians would be a return to violence. The per capita GDP would fall by 26 percent for Gaza and the West Bank and drop 10 percent in Israel.
Hopefully this strong financial incentive could persuade Israel and Palestine to consider peaceful negotiations. But as the researchers realistically note, Israel has made occupation relatively cheap.
“Israel, the country with by far the greater power, has a smaller economic incentive to diverge from present trends,” Rand writes. “Israel has learned how to manage security vis-a-vis the Palestinians at a relatively low cost.”