Khaled Abu-Aker: In the Palestinian territories, relations
with Israel were always seen as those between occupier and
occupied. Then, following the growing campaigns in the Arab world
after Oslo against normalization with Israel, certain groups
started to see relations with Israel as normalization. Yet, the
reality is different and relations between Palestinians and
Israelis cannot be compared to those between Jordanians or
Egyptians and Israelis. Where are we heading?
Hanna Siniora: There are difficulties in coordination and
cooperation with the Israelis at the moment caused by the lack of
progress in the peace talks. Is the talk of normalization a serious
phenomenon among the Palestinians? The Oslo Declaration of
Principles very clearly mentions joint ventures between Israelis
and Palestinians, and even pinpoints the Dead Sea area, the Jericho
area, for joint ventures. We are now in a different situation than
the one prevailing before the Palestinian Authority came into
existence. Then we were occupiers and occupied adversaries; to some
extent you could call us enemies at war. Now we are in a process of
creating a peace treaty between the two peoples. In this process,
economic cooperation is of the utmost importance, especially since
we are already tied together by the Paris Economic Protocol and a
customs union with Israel. Our situation is different from that of
other Arab countries, although there is opposition to the process
of normalization in Egypt and Jordan, especially among the unions,
federations and syndicates. However, it is a fact that Israel and
Egypt and Jordan have signed peace treaties, and there is some
commerce between them.
For us also, it was important that, during the Intifada, we
sometimes had over 100,000 people working in Israel, some even in
Israeli settlements in the occupied territories. Is this
normalization, or is this a situation that existed as a result of
the war, as a result of living together in the same country? We
want a separate Palestinian identity, a Palestinian state, with
proper political and economic relations between the two peoples.
However, I differentiate between dialogue and normalization. You
can call normalization what is happening between Israel and the
Gulf States where, without a peace process, trade is carried on,
and sometimes there are representation offices. With the three
countries that have relations with Israel - Egypt, Jordan and
Palestine - what is happening is actually a de facto result of
living together. Especially in the field of the economy, I believe
we are, in a way, profiting from working closely with the
Israelis.
Khaled Abu-Aker: Prof. Arnon, there were high expectations,
especially after Oslo and after the treaty with Jordan, people
spoke of a vision of a bright future for economic cooperation in
the region. But nothing was achieved on the ground. Can you tell us
why?
Arieh Arnon: Maybe I should note that we are speaking today
in mid-June, and by the time this is published, everything could
change. I think it is good to start from Oslo, as Mr. Siniora just
did. The fate of the Oslo process and of economic cooperation all
depends on what will come out of the next few weeks or months of
the political process. We may even go back to some sort of
confrontation between the two sides.
Oslo opened up the debate and raised expectations - from clear
occupiers and occupied, we hoped slowly to move to a different
relationship. One obstacle to the Oslo vision was that the process
was very provisionary in its nature. The two sides knew ahead of
time that they were not talking then about permanent solutions, so
they left lots of things open to battle over. Maybe the worst thing
that happened after Oslo in terms of the economic relationship was
the closures, which had a huge impact on the Palestinian economy.
On the Israeli side, many people - not all, but many - described
them purely as a security measure. On the Palestinian side, they
were seen as collective punishment or pressure to be used during
the negotiations. The entire framework of the Oslo economic
protocol was based on assumptions that were not fulfilled -
political stability and calm, free and open economic relations and
open borders, the whole area between the Jordan River and the sea
flourishing. At the time, I criticized the basic assumption that no
economic borders should be created between the two economies.
I worked with a group of economists in Beersheba throughout the
1990s on the Palestinian economy, and we published a book
criticizing the Protocol vision, not because we are against
integration and prosperity, but because we thought that, given the
political realities, it would be impossible, without a political
agreement, to jump from what we called the "imposed integration" of
the occupation - the pre-1993 arrangements - to a voluntary
economic integration to which the two sides would agree. A
political agreement will have to be an agreement between two
sovereignties, two states. In such an agreement, if both sides -
but one side suffices - would have clear political borders, which
would include economic borders, I think that would provide a better
framework for economic development. Borders do not mean that we
stop interacting and moving from one place to another, but that we
do very clearly define the movement.
The people who had the vision of a political agreement without
borders - something described in the Israeli political vocabulary
as a functional agreement - understood that there could only be
such an agreement if it were enlarged to include not only Israel
and Palestine, but in the near future - or in the long run - also
Jordan, then Egypt, and maybe one day Syria. The whole idea of the
new Middle East, in a way, revolved around the model of the
Israeli-Palestinian agreement. This cannot work because of the
opposition to normalization in Egypt and in Jordan that existed
before an Israeli-Palestinian agreement. That is, they were against
normalization before there would be an agreement between Israel and
Palestine. The opposition to normalization in Palestine is, in a
way, imported from Egypt and Jordan under very different political
and geographical circumstances, and it is a totally different
phenomenon. It is impossible to have no relations - pure
de-normalization - under the existing circumstances.
Khaled Abu-Aker: The closing of borders between Palestinians
and Israelis, and economic hardships caused the politicians and
negotiators to suggest industrial parks on the borders between the
Palestinian territories and Israel. Can this solve the problem of
closures and bring economic development to the area?
Niron Hashai: In my opinion, the solution to the
Israeli-Palestinian dispute should be separation, and I am not the
only one saying this.
Khaled Abu-Aker: For you, separation might even mean a
fence. Do you mean divorce?
Niron Hashai: A physical fence, yes, because I think what
the Israelis are looking for is security and what the Palestinians
are looking for is independence. Separation is the way to achieve
both aims. Divorce, yes. I am a great believer in cooperation, but
I really do not think that agreement between the governments will
be achieved in the near future. Regrettably, I am not optimistic.
The parties are not serious; they are playing games. I do not think
the solution is for something like 25 percent of the work force of
Palestinians to keep working in Israel. Currently it is inevitable,
but in the long run - let's say five years - the Palestinians
should gradually have enough independent industry of their own so
as not to have to come to work in Israel in such numbers.
Why is cooperation important? First, because it sustains peace.
Businessmen will have vested interests in cooperation and this can
strengthen the peace. Second, I think that the Israelis and the
Palestinians need each other. If the Palestinians want to develop
an industry of their own and start being exporters - since today we
are in a global world, they can get the help of the Israelis with
regard to marketing infrastructure, know-how, creating brand names,
etc. The Israelis also need the Palestinians because of certain
comparative advantages that exist on the Palestinian side.
The only way to maintain cooperation with separation is through
industrial parks. Karni is one great example of a working
industrial park. Several Israeli companies have established
themselves there, and several Palestinians are working exclusively
for the Israeli Kitan Textiles. The border itself is very
sophisticated to control security. No weapons can pass through. So
the notion of an industrial park with a secure border is
working.
I am involved, from the academic side, in the binational park that
is projected for Rafah. If Karni is so-called low-tech, this park
will be for clean industries. We are also talking about creating a
hi-tech park in Tulkarem, which will be close to hi-tech centers in
Israel. An industrial park in Jenin is being planned jointly by
Israelis and Palestinians. Separation is necessary. It also means
that the customs union that exists according to the Paris Protocol
will not last. We will have to go to a free trade agreement or to
some other trade regime. Personally, I think it would not be so bad
- even though economists say this is a sacred cow - if the
Palestinians would protect their infant industries.
One more remark about cooperation. There is a lot of border trade
between Israelis and Palestinians. Every Saturday we hear that
there are traffic jams near Bidya. I think something like 1.5
billion shekels is being spent by Israelis on Saturdays and
weekends in all the Palestinian cities on the borders - Qalqiliya,
Bidya, even Nablus, etc. There is a lot of interaction there. It
frightens me somewhat because I am not sure how it can last in the
long run. But there we can see another trend towards
cooperation.
Riad Malki: Why do we talk about cooperation at the same
time as separation? I understood from what I have just heard that
you mean individual separation: Palestinians separated from
Israelis in terms of human contact, to the Israeli benefit. This
precisely fits the Israeli position of trying to exploit to the
maximum a situation where, on the one hand, you have the political
perspective of total human separation, while at the same time
maintaining the economic connection through so-called industrial
parks as a form of cooperation. What is an industrial park? Sites
within Palestinian controlled areas, where Israeli companies open
plants and employ Palestinians. Why do these companies decide to
come to Palestinian areas in the first place? Obviously, because of
cheap labor. A businessman is not really interested in cooperation
between Israel and Palestine on a national level. He is interested
in how much money he can make by moving his plant to Madaba or
Irbid or Karni or somewhere near Jenin. He wants to benefit from
cheap Palestinian labor and from the chaotic economic laws and
regulations that exist in the Palestinian areas. These permit, to a
certain degree, the movement of goods, personnel and money without
checking and without taxation over a certain period of time, as an
encouragement to investors. I see this as a form of
exploitation.
A joint project should benefit both sides. It is said to benefit
the Palestinians because we are creating jobs, upgrading the
standard of living, etc. However, this is not a basic investment in
Palestinian infrastructure, but an economic loan given by the
Israelis to the Palestinians. The moment that investing in the
Karni or the Jenin industrial park is no longer profitable, the
Israelis will immediately withdraw their plants from these areas
and move somewhere else more profitable. This does not build a
strong solid base for the Palestinian economy. What we are doing
here is accommodating Israeli economic needs at the expense of the
Palestinians.
Hanna Siniora: It is exploitation.
Riad Malki: This is exactly how I see it. Are we really
investing in a solid Palestinian economic infrastructure, or are we
solving Israel's economic needs by means of solutions that might,
at first glance, appear attractive to Palestinians, because they
provide employment?
Khaled Abu-Aker: We want also to talk about regional
cooperation. After the treaty with Jordan, we saw Israeli factories
moving to the Madaba or Zarka industrial areas, and, on a small
level, joint ventures with Jordanians, some of which have succeeded
and some others which have failed. One of the ideas of Israeli
industrialists was to open the borders via Jordan to the Gulf and
to other countries.
Arieh Arnon: These topics are really at the heart of the
problem, and hopefully the negotiators will reach the point where
they will also tackle them. It is a fact of life that wages paid to
Israeli workers are much higher than those paid to Palestinians.
The same applies to other places, like Egypt. I do not like the
metaphor of divorce for describing the reframing of the
relationship between Israelis and Palestinians. I do not think it
is a good recipe for peace.
Riad Malki: There was no marriage in the first place.
Arieh Arnon: What we are talking about in the political
framework is whether we prefer what we used to call a two-state
solution or a one-state solution. In economics, we want to know
whether we are going to regulate the flow of economic goods -
including labor, trade and capital between the two sides - or
whether we leave this to what economists describe as the market
process, to be dictated by profit and interests. I prefer (for a
while, not forever) what I call open borders; that is, borders with
good gates. I do not want to separate. I do not want to stop human
interaction. On the contrary, I want human interaction, but I want
regulated borders. I think this is the best strategy for reaching -
one day, in the not too distant future - a convergence between the
two sides. Otherwise there will be only exploitation, as there has
been over the last 30 years.
As to industrial zones, I do not prefer them to development within
the Palestinian economy. But industrial zones were created as a
second-best or third-best solution under the Oslo circumstances.
When it became clear that there was no flow of goods between the
two sides and that the closures really stopped development, then
the World Bank, as well as many Palestinians and many Israelis,
thought that we had to do something and established industrial
zones.
In the future, when there are two states, Palestinian workers can
continue working in the Israeli economy, but with regulated
passages - not under a system of exploitation, but under a system
whereby the two sides will agree whether it benefits them or
not.
Riad Malki: If we take the Israeli budget of 200 billion
shekels in comparison to ours, the difference is so wide that it
would be naive of both sides to look for ways to cooperate. We are
talking about the big brother that has everything, possesses
everything, and the little brother that has nothing and is just
starting out. That is why it is very important to see if we are
really combining economic development with political stability. If
separation comes as a result of the need for security, and if we
talk about political stability related to economic development,
then it is important for us to see how the Israeli economy - and
the political establishment behind it - could find ways to help the
new Palestinian economy to develop in order to improve Palestinian
living conditions.
That, by itself, would allow for a certain political stability
within Palestine, and would affect regional relations with Israel
and with the rest of the countries. Here we see the connection
between economic development and political stability. What is
important for Israel today is to find ways to invest in developing
the Palestinian economy so as to promote its prosperity and help it
find its own character and independence. Only when we reach the
level where the Palestinian economy can stand on its own two feet
and develop and compete regionally and globally, can the
Palestinians look to the Israeli economy for joint ventures,
investments and so on. We cannot close our eyes to the reality that
for the last 30 years - and even before the Israeli occupation of
1967 - the Palestinian economy has been totally dependent on
Israel. It needs to develop now not only through separation, but
also through assistance, and not through industrial parks where
Israeli industries move into Palestinian territories. International
companies, Palestinian investors from the Diaspora, Arab and,
sometimes, also Israeli investors, should be encouraged to invest
in the Palestinian economy so that it will be able to sustain
itself.
Khaled Abu-Aker: With regard to economic cooperation, we
have not witnessed any breakthroughs with neighboring countries.
Despite isolated cases in Jordan and maybe in Egypt, we have not
seen any real economic cooperation in the region. As one of those
involved in these failed attempts, how do you see this, Mr.
Siniora?
Hanna Siniora: The way separation is being preached now -
especially by Israeli political leaders, and foremost among them
the prime minister - it is really another form of what has been
called collective punishment. Today, between official and
unofficial permits, we have more than 100,000 Palestinians working
in Israel. Separation, the way it is being preached now, will
create hardship. We saw this already when the Palestinian Authority
came into power, with the closure policies of the Likud and the
Labor governments. Between 1994 and 1996, our economy declined by
25 percent. So if we are going to have separation, the Israeli side
has to think seriously about helping us create at least 100,000 new
jobs inside the Palestinian area.
Today we are talking about industrial zones. So far, there is only
one very modest industrial zone, and it is in Gaza. It has not
created many jobs, and it is an industry with no future. Most of
the joint ventures that are taking place, even with Jordan, are in
textiles, and textiles have no future in this region because of the
competition coming from Southeast Asia, and specifically China.
Today, textiles, leather and shoes are being imported from China
and this is killing all the local industries. I believe that those
who signed the Paris Economic Protocol made a grave mistake
because, as Prof. Arnon said, you cannot have a customs union
between a very developed country and a still underdeveloped
country. There is a big difference in per-capita income between the
two countries. In Israel it is about $16,000 to $17,000. In the
Gaza Strip it is about $1,200, and in the West Bank about
$1,800.
I also believe that what we have to develop is a kind of free trade
agreement between the Palestinian and the Israeli economic
entities. And it is essential that Israel help raise the standard
of living in Palestine by creating, and helping the Palestinian
Authority to create new jobs. When we have this kind of parity,
then we can think about a customs union. Meanwhile, the present
arrangement is detrimental. In a way, we are slowly ending what we
called occupation in its old forms, but under this customs union,
we are falling into an economic occupation. This has to stop. An
example of economic cooperation where the cooperating countries
enjoy the same level of economic progress is the Benelux
arrangement between Holland, Belgium and Luxembourg. This is not a
federation, but a form of economic cooperation or union based on
the fact that these three countries, with small populations and
very well-developed economies, could not compete individually with
their bigger brothers such as France or Germany. In our case, we
have the opposite - an arrangement between the haves and the
have-nots, resulting in continued exploitation.
I do not believe in a fence. I would like to have completely open
borders to allow for economic movement of people and goods.
Otherwise, there will be no investments, even by Israelis, in the
future Palestinian state. And if the Israelis do not invest, then
there will be no foreign investments. We are already seeing a
slowdown of Arab, and even Diaspora Palestinian investment in
Palestine because of the restrictions and borders and checkpoints.
The creation of more of these will lead to deterioration rather
than an improvement in the Palestinian economy.
On the issue of regional cooperation, it is premature to try it, or
even to talk about it. We tried in tourism, but there is still no
free movement of tourists. Border crossings in this region are a
big problem not only between Israel and Egypt or Israel and the
Palestinian areas, but also among all the countries of the region.
There are even problems crossing from Egypt to Gaza. In America,
you can move freely through the 50 states. You can move freely
through the 15 European Union countries. In order to promote the
economy of our region, we need something similar.
One way of preparing the Palestinian economic entity to have
economic cooperation with Israel is exactly the way the European
Union is doing it when it invites in new members. When Greece,
Portugal and Spain entered the European Union, they were given a
two-year grace period in which to prepare their economic house, and
there were huge investments made by the European Economic Community
into the economies of these three countries. Something similar has
to happen here.
Riad Malki: About regional cooperation, the question is what
comes first, cooperation or peace. Does cooperation bring peace or
will peace bring cooperation? Obviously, if we take the last three
or four years since Oslo was signed, we see very clearly that
signing peace agreements does not in itself bring about regional
cooperation. Regional cooperation cannot be achieved without
preconditions and prerequisites, the first of which is that peace
should be comprehensive. It is not enough to sign a peace treaty
with Jordan or with Egypt. The key to reaching peace with the Arab
countries is reaching peace with the Palestinians. Secondly,
signing peace with leaders does not mean that peace has really been
achieved. Take for example the cold peace with Egypt. Israel signed
a peace treaty with Egyptian leaders, but has not achieved peace
with the Egyptian people. We have to be creative enough to find
ways to bring the collective civil society as partners in peace and
regional cooperation.
Khaled Abu-Aker: It is obvious that the key to any
cooperation in the region is a political solution for the whole
conflict. But everybody thinks of Israel as dominating the Arab
world economically, culturally, and educationally - a form of
colonialism. Do you think it possible that the main issue is not
cooperation, but fear? That the Arabs in general are afraid of
Israel's domination?
Riad Malki: Yes, it is possible. But you have to see it from
a different perspective. If the Arabs are not prepared to engage in
real cooperation with Israel and to invest in regional cooperation,
and if they are not ready in terms of their infrastructure and
economy, obviously Israel, with its advanced economic development
and with its superior information technology and so on, will
dominate.
But if Israel does not dominate, somebody else will. France will
take advantage and try to do so, or the British or the Germans. The
problem is that we are mixing two things - Israel the former enemy
and Israel the potential economic partner. What we have here is our
fault as Arabs. It is our fault that we are not ready to have
Israel as an economic partner. We are still imprisoned in our own
past in terms of how we perceive Israel. We still see Israel as an
enemy. The moment we take this out of our minds and start looking
at it as a potential partner in our economic development, then we
will start considering it as we do France or Japan.
Because we see that our economy is inferior to that of Israel,
obviously we fear that the Israeli economy will be dominant.
Niron Hashai: I would like to comment on this point of
so-called Israeli colonialism. I think it is only in the eyes of
the Arabs that Israel wants to use economic means to take hold over
them. The concept that there is no potential for a developed
country like Israel to be tied to developing countries such as the
Arab countries is basically not true. Look at the examples of
Mexico and the United States, of Japan and China, of Germany and
Hungary. The collaboration between a developing country and a
developed country has great potential. Seventy-five percent of the
exports of Mexico go to the States. Thirty percent of Hungarian
exports go to Germany.
Hanna Siniora: Eighty percent of our exports go to
Israel.
Niron Hashai: This is very valuable.
The second point is to understand that cooperation helps the Arabs
to develop their own exporting industries. Take the example of
Korea. The Americans came to Korea 30 years ago and built
factories. At that time, the Koreans were saying that the Americans
were dominating them, building factories, and as you said just now,
exploiting their labor. But the Korean government said, Wait, we
will get know-how from them. We will get manufacturing techniques.
We will get marketing facilities, slowly and gradually, and then we
will develop these by ourselves. And after 30 years we have Samsung
and Datsun and many similar Korean companies and a flourishing
economy. One of the reasons for this was cooperation with the
United States.
I believe that Israeli-Arab cooperation can help the Arabs get a
short cut to the world's leading markets. It is not that Israelis
will be exploiting them. Of course, businessmen always go wherever
it's cheap. What should matter is how many work places are opened
up and what know-how is transferred so that, in the long run, the
Palestinian who today is a subcontractor of an Israeli company, in
five years will open his own software or whatever company and will
export by himself. You can learn these facts from business history
all around the world.
Hanna Siniora: An example is the way agriculture in
Palestine has profited from developments in Israel and the transfer
of technology. Although the land area has decreased in Palestine
because of political factors, there has been a growth in
agricultural products and we have become competitive. Today there
is even a lobby inside Israel to prevent Palestinian agricultural
products from entering Israel because now we are being perceived as
a threat to the survival of the Israeli agricultural sector.
Khaled Abu-Aker: The Israeli attempt not to move technology
into the Arab world, but also to open new markets for its own
industries raises Arab fears, and they also say it is too early as
long as there is no political solution.
Arieh Arnon: Let's assume for the moment that there is a
political solution. We should then distinguish between the level of
trade in commodities and the level of economic relations in factors
of production. This is an important distinction.
One illusion, when Oslo was created and the peace process started
rolling, was that suddenly there would be enormous trade among the
various partners. It was exaggerated because the partners do not
specialize in the same things. And there is not much chance that
Israel, for example, will buy and sell a lot to the Arab world or
that an Arab country will buy and sell a lot to Israel. Israelis
will look for markets. And Arab entrepreneurs will look into the
Israeli market such as in agriculture, and say, We can do it better
and cheaper, so let's compete in agriculture. That is natural, and
it is okay.
Hanna Siniora: This is actually the future.
Arieh Arnon: I do not think there will be a lot of trade of
this sort, at least for the near future. I would prefer that the
Palestinians have their own trade protocol. Then we need a free
trade agreement and we cannot have an open customs union. But on
the level of factors of production, we should convince the
Europeans that we are not even at the stage of Portugal and Europe
yet. It will take us a long time. We are in the Mexican-American
schedule where there is a free trade agreement with borders and a
lot of things moving. The borders are not closed; they are open.
But Mexico maintains its trade protocol, and I think this is the
right way to go. By the way, the ratios of the US to Mexico are
very similar to the Israeli-Palestinian ratios - population, GDP,
etc. We are both much smaller, but the ratios are similar. They
have a free trade agreement, and I think we should too.
Niron Hashai: And industrial zones.
Arieh Arnon: But let's go to the difficult field of factors
of production - labor and capital. Here again, the potential is
much smaller than many people think. It is not the case that lots
of Israeli capital will run to Jordan. There are a few cases, and
they will build textile factories there, but I do not think it will
become a big movement. I think it should be regulated because of
political fears. That is, people will describe it as a form of
exploitation and I do not think it is worth the price. It would be
better if international capital and joint ventures, rather than
Israeli capital, would move first into either the Palestinian or
Jordanian or Egyptian economy - maybe joint ventures with locals,
maybe together with Europeans, but under the agreement of the
sovereigns in the various places. Otherwise, the concept of
exploitation by an ex-enemy - I hope ex-enemy - will distort
things. I think all sides should be very careful about regulating
those types of economic relations.
Hanna Siniora: Another example is the way the Israeli
economy has developed since 1948. It opened markets in Europe and
in the United States, and not in the Arab countries. Certainly
there is some trade with Arab countries, especially in the Gulf,
but it is minimal and should not create a fear that we are going to
be economically exploited by Israel. Also, when our market is
opened to Israeli and European goods, sometimes the European goods
are cheaper than the Israeli products of the same quality. However,
I gave the example of agriculture to
illustrate that when we really use modern technology, we can
compete with Israel.
Riad Malki: Most of the Arab countries that are using
sophisticated technology in terms of software and so on may not
even know that parts of this software might have been developed by
Israeli companies.
Khaled Abu-Aker: When the peace treaty was signed with
Jordan, instead of an Israeli invasion, we started witnessing a
kind of invasion of laborers from Jordan to Israel, some legal and
many illegal, and they have created a competition with the foreign
and Palestinian workers. When you talk about fences or separation,
do you think that Israel will replace Palestinians with foreign
workers? Do you see Arab workers invading the Israeli markets as a
solution to the separation you are talking about?
Arieh Arnon: This is a major issue. After the Oslo treaty
when there was a lot of tension and violence, Israel opened its
gates to foreign - that is, non-Arab, non-Palestinian - workers,
from Rumania and Thailand and the Philippines. In a matter of two
or three years, their number grew from 10,000 or 15,000 to nobody
knows exactly how many - 100,000 legal, and maybe another 100,000
or more illegal foreign workers in the Israeli labor market. At
first we thought, they are substituting - and this was a fact - for
the Palestinian labor, as you all know. But since then, a lot has
changed.
First, Palestinians came back into the Israeli labor market. Today,
according to the Palestinian Central Bureau of Statistics, there is
something like 120,000-130,000 Palestinians working in the Israeli
economy. Only 50,000 or 60,000 are legal, and the rest are illegal,
mainly from the West Bank, not from Gaza. This is one important
factor. And this is in spite of the fact that something like
100,000 non-Arab foreign laborers are still present in the Israeli
economy. We know that there is a small stream of Arab laborers from
Jordan and from Egypt entering into the Israeli economy. I heard
cries last week from Palestinians who live within Israel, within
the Green Line, complaining about competition from Jordanians
working in construction and taking their places. Here again, they
are cheaper and they are good workers. As an economist - albeit not
an orthodox one - that is exactly where we have to say that the
rule of the market, of profit and price, has to be put aside and
the government should be the sovereign. Otherwise, we will
immediately have a huge - and justified - outcry from all those who
will be hurt. And these are not usual circumstances. It might be
reasonable for a laborer in Jordan to work for $200 or $300 a
month. For Palestinians and Israelis it is not reasonable.
This is why I say we have to regulate the labor market, and the
only way to regulate this aspect of the labor market is to regulate
borders. I do not mean you have to close the Israeli labor market.
Palestinians should work in the Israeli labor market, but under
regulated conditions, and that might be one of the best
contributions that Israel can make to the development of the
Palestinian economy. Israel should guarantee that it will continue
to let Palestinians work in the Israeli labor market, and maybe
Israel should cut the numbers of foreign non-Palestinian, non-Arab
laborers. This would be a contribution to the peace process and a
contribution to the development of the Palestinian economy.
Riad Malki: And the Israeli economy.
Hanna Siniora: And Israeli society.
Arieh Arnon: Let them come in, but the long-term strategic,
political, and, perhaps, also economic considerations should be
taken into account and the labor borders regulated. However, it is
hard to convince people to regulate labor borders.
Khaled Abu-Aker: If there is a peace treaty, will there be a
wave of Arab workers coming into Israel?
Arieh Arnon: It is a very real fear. Sixty-five million
Egyptians live on an estimated $800 per capita. We can say, okay,
from the humanitarian point of view, let's bring them in. Let's
open the gates for everybody, for the whole world.
Niron Hashai: I do not think there is a real fear that, at
the moment, Egyptians or Jordanians will come in substantial
numbers. Political pressures will regulate this, and I do not think
the Palestinians have to fear it.
As I said before though, in the short run, I think Palestinians can
and should continue working in Israel. And in the long run, we
should see how, for the Palestinians' sake, we could reduce the
number of Palestinians working in Israel and develop the
Palestinians' own industry so they can work there.
Khaled Abu-Aker: Regional cooperation is not only in the
field of the economy. Economy may be the main factor, but there are
other aspects as well.
Hanna Siniora: We have two problems now that cannot be
solved on a bilateral basis, but only on a regional basis. One is
water and the other is the environment. And that is why both of
them are part of what we call the multilateral talks. Today, for
the first time, Israel awoke to the fact that water is going to be
scarce this year and they might be forced to import water from
Turkey. This actually should not have happened because, in both the
Palestinian area and in Israel, desalination should have been
started five years ago. I also believe that there is still an
injustice between us and them in the distribution of water. But
even if we put that aside and just talk about the shortage of water
in the region, it has to be solved through regional management. We
have to create water treatment networks, better water management,
and joint management of resources.
In this way we will be able to create goodwill where today there
are bad feelings between the parties. When we talk about
occupation, we bring to the fore that we are not getting a fair
share of our water resources, that the water resources are
completely in the hands of the Israelis, that water is being given
in greater quantity to the settlements, and some settlements in the
Jordan Valley even have swimming pools while the villages next to
them are dry. There is also a disparity in the pricing system. We
pay more than the Israeli farmers and consumers. In addition, the
Israelis consume three times as much water as the
Palestinians.
Today we are being asked to retrench in our usage of water, while
if there were fair distribution per capita, even under the present
dire conditions, there would be an increase in water distribution
to the Palestinian area.
Khaled Abu-Aker: Even though there is a peace treaty with
Jordan, there is no cooperation on that.
Hanna Siniora: Last year a Jordanian minister of irrigation
was fired because of this issue of water distribution. The other
area is the environment. Today in the Israeli press, Environment
Minister Dalia Itzik is saying that some 50 percent of the water
reservoirs are contaminated because of the pollution seeping to the
aquifers.
Riad Malki: The impact of the environment goes beyond
borders, and regional cooperation is required in order to overcome
such problems. The environment is one problem, but there are many
others. I believe that the moment that conditions for peace are
present, then immediately people will start thinking on a higher
level of cooperation. Then different perspectives and ideas about
regional cooperation will start feeding our discussions. People
will immediately start setting different priorities with regard to
regional cooperation. I believe that with peace this will come
about naturally.
Khaled Abu-Aker: Our opening question was about the
situation in the Palestinian territories in general and the
importing of the idea of normalization with Israel from other Arab
countries. How can we explain the demonstrations against what is
called normalization?
Hanna Siniora: What we used to call dialogue became
normalization.
Riad Malki: When people are really frustrated with the lack
of progress in the peace process, they start looking for victims.
One of those will immediately be Israeli-Palestinian dialogue,
Israeli-Palestinian projects and Israeli-Palestinian NGOs that are
working to promote peace and understanding between the two peoples.
Nobody talks about normalization. From my perspective, when
countries are in a state of war, they may try to normalize their
relations. In the case of Israel and Palestine, no one can talk
about normalization because we are still in the process of
negotiations at the official level. There are still Israeli
soldiers stationed on Palestinian soil. Without equality and parity
between the two sides how can we start a process of normalizing
relations?
Israel's relations with Jordan and with Egypt allow for a process
of normalization. But for Palestine and Israel, it is still
premature, even if people in some circles would really like to see
it come about. Israelis and Palestinians have been engaged for a
long time in a process of dialogue, of trying to meet and
understand each other and to see the human element in each of us as
individuals. This is a very important precondition for whatever
will come later.
Hanna Siniora: This supports the peace process.
Riad Malki: Efforts have been made by civil society
organizations on both sides to normalize the ground for the
political leaders. This facilitates the process of negotiations in
order to achieve a political solution to the whole
Israeli-Palestinian conflict. But there is a need to distinguish
between a process of dialogue and one of normalization.