A peace agreement with the Palestinians would be worth $123 billion to the Israeli economy over ten years, according to research published by US-based research institute RAND Corporation.
According to the RAND study, the Palestinian economy would also benefit from a two-state solution to the conflict, in fact proportionately more than the Israeli economy. RAND estimates that a peace agreement would be worth some $50 billion to the Palestinians over ten years, and that their per capita income would rise by 36%, compared with a 5% rise for Israelis.
Speaking to the "Financial Times", Charles Ries, one of the authors of the study, said, "In the absolute size of GDP dollar terms, the Israeli economy would be 5% bigger and the Palestinian economy 50% bigger in 2024 if the two parties were to agree a two-state solution.”
On the other hand, if the two sides were to return to violent conflict, per capita gross domestic product would fall by 46% in the West Bank and Gaza, and by 10% in Israel, by 2024, the study finds. Israel's economy would lose $250 billion over the decade.
The study warns that the cumulative damage to Israel from the international BDS (boycott, divest, sanctions) campaign could, in an extreme scenario, reach $50 billion by 2024. Although this is a large amount, spread over ten years it is not large in relation to the Israeli economy's output. In 2024, Israel's GDP is projected to be only 2% lower as a result of a full boycott, compared with what it would be without a boycott.
The study also puts a price on various other possible scenarios for the region - Coordinated Unilateral Withdrawal, Uncoordinated Unilateral Withdrawal, Nonviolent Resistance, and Violent Uprising - and even allows surfers to examine for themselves the effects of changes in its assumptions, via an interactive Costs of Conflict Calculator.
The researchers base their findings on historical precedents, published information, and interviews with experts.
Published by Globes [online], Israel business news - www.globes-online.com - on June 8, 2015
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