FacebookTwitterGoogle+RedditEmail

Stalled Negotiations Have a Cost in the Middle East

by DR. CESAR CHELALA

A group of Israeli businessmen has warned Israeli Prime Benjamin Netanyahu that failure to reach peace with Palestinians has a high economic cost for Israel. The businessmen, who were invited to the meeting by Netanyahu himself, told him that unless there is diplomatic progress, the Israeli economy won’t reach its full potential.

According to the businessmen, some of whom are friends of the Prime Minister, if there is no progress towards peace Israel will cease to be the startup nation; it will continue to have an accelerated brain drain; foreign investors will refuse to invest in an explosive environment. At the same time, the defense budget will continue to drain the country’s resources.

The head of the group was Yossi Vardi, who had been an economic adviser to Netanyahu during the talks with the Palestinians that led to the Wye Agreement of 1998, where Arafat accepted the nullification of the Palestinian National Charter Provisions that called for the destruction of Israel.

The private meeting with Netanyahu took place before the start of the Breaking the Impasse initiative, where a few hundred top Israeli and Palestinian business leaders “sent a message” to their respective governments urging them to reach a peace deal. “We hear the voice of the extremists, but the majority is silent,” said Yossi Vardi. What makes this initiative particularly valuable is that, together, the firms headed by these businessmen represent about a third of the region’s economy and employ tens of thousands of workers.

There is a direct correlation between absence of overt conflict and economic development. In 1987, at the time of the outbreak of the first Intifadah, Israel’s economic growth was 6.1%, according to the ADVA Center, an independent policy center in Tel Aviv. One year later, it declined to 3.6% and in 1989 it declined even further to 1.4%. Economic growth only resumed at the time of a large immigration wave from the Soviet Union, one of whose effects was to stimulate the economy.

In 2000, at the time of the second Intifadah Israel experienced a remarkably high economic growth (9.2%), partly as a result of the sale of several hi-tech startups. This was followed by three years of deep recession, considered the longest in Israel’s history. The economy only recovered after the second half of 2003.

For the last decade, Israel has had to face the choice of increasing the budget for social services or spending more money on security issues. One of the casualties of limited spending on social issues is the increasing levels of poverty since the middle of the 1980s. In 1985, the poverty rate for families was 11.4%; it increased to 16.8% in 1995 and in 2010 it was 19.8%, after reaching over 20% for a short period.

Several factors can be responsible for these high rates of poverty, such as the arrival of hundreds f thousands of immigrants from the former Soviet Union and Ethiopia, most of whom are unemployed and work for low wages, a labor market with high levels of unemployment, and policies that tend to lower labor costs by weakening labor unions.

But also important among those factors are the high costs of maintaining the occupation of the Palestinian territories and the increased defense budget. “An in-depth analysis of the factors causing Israel to have more poor than any other developed country cannot overlook the fact that Israel spends 7% of its GDP on defense, compared with 1.5% on average in the other developed countries,” stated Prof. Momi Dahan, a Senior Fellow at the Israel Democracy Institute where he heads the Inequality and Public Policy project.

In addition to the economic and social costs, there are also heavy costs of the occupation of Palestinian territories. As stated by the AVNA Center, no other country in the world, including the United States, recognizes Israel’s occupation of the Palestinian territories; no other country, including the United States, recognizes Israel’s annexation of East Jerusalem; and no other country, including the United States, Israel’s strongest ally, recognizes the separation wall as a border.

All those actions only contribute to creating an atmosphere of distrust that makes a peace agreement more difficult. For Israel, to persist on those policies cast serious doubts on their legality and undermine its status as the “only democracy” in the Middle East. To persist on those policies will become a boomerang that may hinder the prospects for the country’s development as a democratic state.

Dr. Cesar Chelala is an international public health consultant and a co-winner of an Overseas Press Club of America award.

Dr. Cesar Chelala is a co-winner of the 1979 Overseas Press Club of America award for the article “Missing or Disappeared in Argentina: The Desperate Search for Thousands of Abducted Victims.”

More articles by:

CounterPunch Magazine

minimag-edit

Weekend Edition
August 26, 2016
Friday - Sunday
Paul Buhle
In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment
Andrew Levine
How Donald Trump Can Still be a Hero: Force the Guardians of the Duopoly to Open Up the Debates
Rob Urie
Crisis and Opportunity
Louisa Willcox
The Unbearable Killing of Yellowstone’s Grizzlies: 2015 Shatters Records for Bear Deaths
Charles Pierson
Wedding Crashers Who Kill
Richard Moser
What is the Inside/Outside Strategy?
Dirk Bezemer – Michael Hudson
Finance is Not the Economy
Jeffrey St. Clair
Roaming Charges: Bernie’s Used Cars
Margaret Kimberley
Hillary and Colin: the War Criminal Charade
Patrick Cockburn
Turkey’s Foray into Syria: a Gamble in a Very Dangerous Game
Ishmael Reed
Birther Tries to Flim Flam Blacks  
Brian Terrell
What Makes a Hate Group?
Howard Lisnoff
Trouble in Political Paradise
Terry Tempest Williams
Will Our National Parks Survive the Next 100 Years?
Ben Debney
The Swimsuit that Overthrew the State
Ashley Smith
Anti-imperialism and the Syrian Revolution
Andrew Stewart
Did Gore Throw the 2000 Election?
Vincent Navarro
Is the Nation State and Its Welfare State Dead? a Critique of Varoufakis
John Wight
Syria’s Kurds and the Wages of Treachery
Lawrence Davidson
The New Anti-Semitism: the Case of Joy Karega
Mateo Pimentel
The Affordable Care Act: A Litmus Test for American Capitalism?
Roger Annis
In Northern Syria, Turkey Opens New Front in its War Against the Kurds
David Swanson
ABC Shifts Blame from US Wars to Doctors Without Borders
Norman Pollack
American Exceptionalism: A Pernicious Doctrine
Ralph Nader
Readers Think, Thinkers Read
Julia Morris
The Mythologies of the Nauruan Refugee Nation
George Wuerthner
Caving to Ranchers: the Misguided Decision to Kill the Profanity Wolf Pack
Ann Garrison
Unworthy Victims: Houthis and Hutus
Julian Vigo
Britain’s Slavery Legacy
John Stanton
Brzezinski Vision for a Power Sharing World Stymied by Ignorant Americans Leaders, Citizens
Philip Doe
Colorado: 300 Days of Sunshine Annually, Yet There’s No Sunny Side of the Street
Joseph White
Homage to EP Thompson
Dan Bacher
The Big Corporate Money Behind Jerry Brown
Kollibri terre Sonnenblume
DNC Playing Dirty Tricks on WikiLeaks
Ron Jacobs
Education for Liberation
Jim Smith
Socialism Revived: In Spite of Bernie, Donald and Hillary
David Macaray
Organized Labor’s Inferiority Complex
David Cortright
Alternatives to Military Intervention in Syria
Binoy Kampmark
The Terrors of Free Speech: Australia’s Racial Discrimination Act
Cesar Chelala
Guantánamo’s Quagmire
Nyla Ali Khan
Hoping Against Hope in Kashmir
William Hughes
From Sam Spade to the Red Scare: Dashiell Hammett’s War Against Rightwing Creeps
Raouf Halaby
Dear Barack Obama, Please Keep it at 3 for 3
Charles R. Larson
Review: Paulina Chiziane’s “The First Wife: a Tale of Polygamy”
David Yearsley
The Widow Bach: Anna Magdalena Rediscovered
FacebookTwitterGoogle+RedditEmail