On August 16, 2007, the Palestine-Israel Journal (PIJ) held a
roundtable discussion on The Economic Dimension: Past, Present and
Future at the American Colony Hotel in East Jerusalem. The
Palestinian participants were Dr. Samih al-Abid Karakrah, former
minister of public works and housing in the unity government and
former deputy minister of planning, and Nasser Tahboub, a senior
Ministry of Finance official and assistant to Prime Minister Salam
Fayyad and a former negotiator of the Paris Protocol. The Israeli
participants were David Brodet, the former Ministry of Finance
director general who led the negotiations on the Paris Protocol,
and Prof. Ephraim Kleiman, a Hebrew University economist who was
also involved in the Paris Protocol negotiations. The discussion
was moderated by Avi Temkin, head of the Israeli economic newspaper
Globes' research unit, and was attended by PIJ co-editor Hillel
Schenker.
Schenker: Unfortunately, PIJ Palestinian Co-Editor Ziad AbuZayyad
is unable to be here, because the Israeli military authorities are
refusing to renew his three-month permit to enter Jerusalem. We
very much regret that this is the situation, because there is no
logical reason why it should be delayed or not renewed. However,
this roundtable is devoted to discussing Israeli-Palestinian
economic relations, past, present and future, for our issue on the
Economic Dimension.
Temkin: Let me start with one simple question: What was the vision
immediately after the signing of the Paris Protocol and the October
1995 regional economic conference in Amman? What was the vision,
particularly as it was written into the protocols, and where should
have we been today, according to that vision?
Brodet: The vision of Paris was very broad - basically to establish
for the first time a model for relations between Israelis and
Palestinians that would lead, in the future, to normalization, or
normal relations. The Paris Protocol was subject to some
limitations and constraints: We chose the customs union, because
this was the only model that could work on the political
assumptions in 1993 and 1994. The political conditions were that we
were not speaking of a state, but autonomy. There was no definition
of borders: There were no political borders; therefore, there were
no economic borders. We were not talking about the main issues of
refugees or settlements, because these were postponed for the
permanent status negotiations. At that time, we were a part of the
interim agreement that was coming out of Washington, resulting from
the Oslo Accords.
So our vision was to see how we could work together - Israeli and
Palestinian economists - but the spirit was a spirit of
normalization. Normalization means that the two sides create
economic and political conditions for more economic cooperation,
creating a relative advantage for the Palestinians by bringing
their economy into a good position and, of course, seeing how
Israel could benefit from this situation. And on top of this, the
spirit was that if we can establish good economic infrastructure in
the area, it will also serve the political environment and
political target after five years for a permanent status
agreement...
Temkin: From the Palestinian point of view, at the time, where did
you envisage the Palestinian economy to be at the turn of the
century? Where did you think it would be today?
Tahboub: At that time, there was a developmental plan that was
drawn up by Prof. Yusef Sayegh. It was a very promising and
optimistic vision of how the Palestinian entity should look. What
we were trying to achieve was a framework for enabling an emerging
entity of the Palestinians for the Palestinians. We started with
the small things: an entity that can finance itself, an entity that
would be able to continue economic relations with Israelis. And we
thought at that time that Israel would be a good economic neighbor,
meaning that it would continue employing Palestinians and continue
providing bilateral relations. We knew that Israel would put many
limitations on this agreement. Some of these were not to let the
Palestinians have very ambitious expectations, and some became the
reality of economic and trade relations today. In Paris we tried to
accommodate our desires but also not to antagonize the Israeli
business community, which at that time had overwhelming ownership
over the Palestinian business sector.
Kleiman: Looking at Paris I would say that it was trying to
legitimize the shotgun marriage of 1967, and to make the customs
union more formalized and more equitable by making arrangements for
the remittance of Palestinian taxes and the phasing out of
quantitative restrictions on agricultural exports to Israel, etc.
As to Sayegh's plan, it was written in 1992 along the lines of the
old Soviet Five Year Plans, which were very influential after the
Second World War in developing countries. It said how many power
stations, how many cement plants will be needed. But not a word
about monetary policy, trade regimes or customs, which were exactly
the questions which were discussed in Paris. So Sayegh's plan was
not a help; it was even a hindrance.
Temkin: What can still be saved and preserved from those accords,
or is it all lost?
Al-Abid Karakrah: We cannot say that it is all lost, but I think
that the change in the environment obliges us all to look back and
to evaluate the measuring rods that were built into the agreement.
One of the issues that was missing from those agreements is the
fact that it was not tied to the political advancement on the
ground or what was going on in relation to the agreements. For
example, the Paris Protocol and the Oslo II agreement, both agreed
upon in 1995, created a new reality on the ground.
Brodet: When we designed the Paris Protocol, we were not looking
only at Gaza and Jericho; for the first time, we were looking at
the West Bank as a whole. This was our approach.
Al-Abid Karakrah: That was your approach, but the result of 1995,
Areas A, B, C and so on, had an impact on those agreements, so it
was far from the reality on the ground today. It was as if it were
a model built for an area where the reality was different, so how
do you make this applicable to reality? That is why we need to
revise all of this in order to see how we can accommodate ourselves
to the new reality on the ground.
Tahboub: First of all, in 1994 there was no economic entity called
the Palestinian Authority; everything was within the Israeli
Ministry of Finance. We are talking about fiscal consequences or
trade and economic consequences. After six or seven years of
implementing Paris - although it was not the perfect aspiration for
us - we succeeded in establishing the PA as a trading partner in
the world. Palestine is not accepted, but we have established a
trading partner with a volume of $1 billion worth of direct
importation, which means we enabled Palestinian businessmen to have
direct dealings with the external world. If the second intifada had
not erupted in 2000, more things would have been transferred from
Israeli importers importing for the benefit of Palestinians to
direct Palestinian importers.
The second issue is the fiscal consequences of Paris. In 2000, we
were able to cover all the expenditures of the PA with a surplus of
10-15%. In 1999 and the beginning of 2000, we were an
economic/fiscal entity that was able to finance itself with its own
domestic revenues. So a Palestinian entity was emerging. I think we
were heading towards creating mutual economic interests with the
world and with Israel. We were speaking of joint industrial zones.
All these Paris would have enabled, with all of its limitations -
and I know there were great limitations, some for political
reasons, some because of security issues, but the majority because
of business considerations.
Temkin: To move to today's situation, how would you go about
reviving the Palestinian economy that is really paralyzed now
because of political and military developments? And to the
Palestinian participants, a second question: Would reviving the
Palestinian economy be conditioned on waiting for Gaza to join, or
should it be a two-track development, where you support the West
Bank somehow and leave Gaza as a separate geographical place to be
dealt with only in humanitarian terms, which will have to wait for
better days?
Kleiman: Gaza and the West Bank are practically separate economies.
The other question is whether we are talking about the very short
run or the long run. In the long run a small economy like the
Palestinian economy has to trade, period. The question of movement
and access is crucial. In the very short run, and especially in
Gaza, there is only one industry that can immediately create
income, and that is construction. If it takes the form of upgrading
the refugee camps, for example, it does not raise the question of
the right of return. More importantly, this does not require new
infrastructure: There can be very nice plans for building
high-rises, but the infrastructure in terms of sewage and so on,
that's a story of two years at least, while here we can start
immediately. There was in Gaza, and to a lesser extent in the West
Bank, besides workers with experience in construction, a whole
industry producing inputs such as floor tiles, simple electrical
installations, solar heaters. All these things can be revived, and
then you will be providing two things simultaneously: immediate
income and better housing. The disadvantage is that in the long run
this produces only housing services, something you cannot export
and that will not create resources to pay for imports. There are
other things, like improving the road network - which were damaged
during the intifada - but I recommend mainly focusing on
construction. Usually construction is a very bad idea because it is
a short-term palliative. It does not provide the resources that the
economy needs later.
Al-Abid Karakrah: I agree that construction is a starting point.
It's manageable, and we can start with it immediately. The only
problem with building new towns in the West Bank is that they will
not allow us to use parts of Area C, where the land is less
expensive than in Area A. There is a demand for building. For a
short time when I was minister, our aim was to build at least five
small towns, three in the West Bank and two in Gaza, and to revive
the coastal area of Gaza, which could be a great support for the
economy. In the present situation, I think it is very dangerous,
and it will not contribute anything to the peace process.
I am not in favor of the model of West and East Germany - that the
West Bank is now West Germany and should have a good economy, while
the other side will be the fool, so it will learn that they have to
be quiet in order to gain the same benefits. I don't think this
will work at all. On the contrary, this will create more violence
in the future. There is a potential for building both, not
necessarily to help or support those who carried out the coup in
Gaza, but at least to support the people of Gaza, because the way
to remove those people from power now is the same way they came to
power: through democracy.
Temkin: In everyday life you have to offer the population of the
West Bank solutions for livelihood, work, health, education and
roads, and this brings me to my next question: You have to give
answers to the everyday realities of living, so how do you go about
it? Would you say: "I am not going to implement any kind of policy
until Gaza returns"?
Al-Abid Karakrah: No, I am not saying that. There are certain
policies that we can implement in the West Bank right now, but
without help and support from the Israeli side, this will not do
any good. If you keep the area under closure and maintain all the
obstacles to movement, nothing will happen. We need to create a
good economy, or assistance to the people there, not only through
humanitarian assistance, which I was personally against. We need a
quality of life, more than just humanitarian assistance programs.
The quality of education and of health will create a new attitude
among people there - that they can change their attitude, can work
in a better way and a better atmosphere, and can contribute to
assisting the democracy that we are looking forward to. If you just
feed them and tell them, "Settle and live in one place," it's not
going to work. This has been the case in Gaza; that is why many
people became radicals, because there is no quality in those living
conditions. In Gaza there is something we can do in order to help
the people. The quality of education and health will not harm
anything, and businesspeople do not belong mainly to the other
group.
Tahboub: I tend to agree with Samih. You are asking how we can
revive the Palestinian economic situation. There are two new
realities on the ground. We do not accept them, we don't like them,
but these are the realities. The first one is the coup in Gaza, and
the other one is the separation wall. In order to have a
Palestinian economy, two significant involvement factors are
needed. The first is to have employment opportunities, and the
second is to find markets for production. Without them you will
have no Palestinian economy - robust, surviving and sustainable. It
is true that we have Areas A, B, C and the Jordan Valley.
Regardless of any political agreements or security arrangements -
even if Israel expresses goodwill towards the Palestinians - if it
doesn't provide and expedite these two things, there will be no
Palestinian economy. I am afraid that Israel has a sophisticated
policy that is contrary to the face value of policies declared by
Israel. I tend to agree that Mr. Olmert is expressing all the
gestures of goodwill but is not acting according to them. Without
Israel enabling significant Palestinian employment in Israel - and
there are so many ways to have employment in Israel security-proof
- we will have problems.
In one of his speeches Uzi Arad [head of the Herzliya
Interdisciplinary Center's Institute for Policy Strategy] expressed
the real policy of Israel towards the Palestinians: that the
intention of the State of Israel is to lower the per capita income
of the Palestinians to the extent that they will look east and not
look west. He was speaking about the geopolitical dynamics in this
area. If Israel creates crossings modeled on Karni in the West Bank
- I am speaking of Tarkumiya, Jalame, Sha'ar Ephraim in Tulkarm -
on these six main entrance points, or passages, then what Arad
declared in 2001 is being implemented in 2007-08. I am trying to
push our policy negotiators to work hard with Israelis to make sure
that these gestures, these good intentions of good neighbors, lead
to well-being, as the new president of Israel used to say, for
without these two factors, there will be no well-being for either
side.
Temkin: David, I want you to add to the equation something that
will bring us to the longer term: Is a resolution to the current
situation possible without bringing the Jordanians into the
equation, because it seems to me that trying to find a resolution
between the Israelis and Palestinians alone is like a dog going
after its own tail.
Brodet: I remember in Paris in some private talks in-between the
official talks, Abu Ala (Ahmad Qurei), who at that time was the
head of Palestinian delegation, told me that strategically, the
Palestinians should coordinate with Israel because it is better to
be with the west than with the east. That was his policy. Why
support the customs union? Because in 1993-94 the customs union was
a case of $1,000-1,500 per capita income for Palestinians, versus
$15,000 for Israelis. So this was his rationale for why it was
better to work with Israel, because Israel pushes them more towards
the west, not only through agreements like the Free Trade Agreement
with Europe or with the United States but with Israel's other trade
partners.
About Arad, it's true, but it's not a conspiracy. After what
happened in 2000, the sentiment now in Israel is unilateralism.
This was the Gaza disengagement. This was what Olmert said -
"convergence" - in 2006 when he won the elections. This was
declared by many officials in Israel. And the sentiment is that
after what we have experienced in the last several years, we don't
want any connection with the Palestinians; we want them to have a
state, and maybe for them it's a new phenomenon and for some people
in Israel, too. For the time being we need a "cooling period," and
maybe after the cooling period, we shall establish, gradually and
slowly, economic and political relations, etc. I am not saying that
this is my policy; I am trying to give you the perspective of the
sentiment and other developments in Israeli society and economy to
understand the issue.
Tahboub: The sentiment is working only one way. Israel will still
be selling $3 billion to the Palestinians but will not be taking $1
billion from the Palestinians.
Brodet: I am only saying that in the 1990s the sentiment in Israel
was towards cooperation and coordination, and the west. Since 2000
there is a sentiment towards unilateralism and the east.
Temkin: Is there a way to bring the Jordanians into the
equation?
Brodet: If there is to be cooperation between the Palestinians and
Jordan, it is not something that Israel will oppose. But I am not
sure that there can be a good match between the Palestinians and
the Jordanians, not because of the political aspect, but because
they are competing with each other. Their per capita income is
$1,500 or $2,000; there is not much difference between the two.
They are not complementary markets like Israel and the Palestinians
or Israel and Jordan. Therefore, as a professional economist I
cannot see a good match that can produce something that will create
phenomenal growth on both sides. And this is not relevant only for
Jordan: There is no good match between the Palestinians and Egypt
or the Palestinians and Syria, not even between the Palestinians
and Lebanon. If I am taking an economic interest, trade interest,
market interest and growth, the greatest interest for the
Palestinians is to go to the west, namely to Israel. The political
situation is now to go to the east, and here we have a mismatch
from the political and economic aspects, and therefore we are in a
bind.
Kleiman: First of all, the idea to go to Jordan is on the political
level. On the economic level it doesn't solve anything. I will
remind you that before 1967 there were Jordanian restrictions on
the exportation of agricultural produce from the Palestinian
economy - under the guise of enforcing the Arab boycott, but the
real reason was to prevent competition with the Jordanian economy.
So that is out.
About this idea of separation: In 1967 there was a great debate on
what attitude Israel should take towards the Palestinian economy.
On the one hand, there was Dayan, who was in favor of cooperation;
on the other hand, there was Sapir, the very powerful finance
minister, who wanted a Chinese Great Wall, period. And life, not so
much Dayan, won because of the pressure of events - people started
crossing the border and goods started flowing. Now there is more
and more of a tendency to separate, and two things contributed to
this: I was amused by what David said about the Israeli attitude
and the cooling period; this used to be the Palestinian argument -
"Let's first separate, then we will grow, and then when we are
equal we will be able to cooperate." This, of course, doesn't make
sense. Once you separate you go different ways, and structural
changes occur that preserve this situation. It will be very sad if
that happens, and the separation wall makes it more possible. Once
there is a physical barrier, it is much more difficult to
cooperate. Shortly after the Oslo agreement, for a variety of
reasons that have nothing to do with the Paris Protocol, the
security and economic situation deteriorated. But people blamed the
economic deterioration on Paris. There was a tendency in
Palestinian society to say, "We want separation," and a lot of
Israeli leaders were saying: "That is what the Palestinians want,
so why do we force ourselves on them?"
In the Israeli government's original statement of their intention
to disengage from Gaza, it was said that in order to encourage the
Palestinians to build up their own economy, Israel will gradually
reduce the employment of Palestinians in Israel. This was taken
straight from a World Bank document. Now, with the separation wall
being almost fully built and with the experience of the last years
- it does not come from economists, it comes from people who do not
understand economics - we are reversing what has happened since
1967. We are in a different situation, but reversing.
Al-Abid Karakrah: Between theoretical things and the realities on
the ground, there are two things I would like to speak about:
First, about the new era of unilateralism advocated by Israeli
policymakers. The damage of that unilateralism is: Look what
happened in Gaza, you left it but kept control over everything -
borders, crossings, movement of people and goods, the economy, even
water and electricity. You control their entire lives, even though
you are not there. And you want to implement the same thing in the
West Bank. I don't know what unilateralism means in the West Bank,
beyond what it is in Gaza. In terms of geography, I don't know how
the Israeli policymakers are going to do it. Are they going to
build a wall around a small territory and keep the Palestinians in
a ghetto there, but with the same Israeli control over going in and
out, air and water, environmental issues, everything in your hands?
I cannot envision how this is going to help support the economy,
politics, security or in any other way. I can see that thoroughly
damaging the situation. How can people separate and then join,
doing what you are doing on the ground for the people there? I
don't know how the economy can develop there. It is different from
the theory that they are talking about. What is the value of trade
that we have now?
Tahboub: With Israel? More than $500 million.
Kleiman: In 2005 the total Palestinian export of goods was
something like $355 million altogether; to Israel it was even less,
about $300 million.
Al-Abid Karakrah: If you can control or put more constraints on the
entry and exit of goods, what is the benefit for the Palestinian
economy? What is the benefit for the Palestinians even in political
terms, or socially, or for security? Since the year 2000, when the
negotiations started, the aim of the Israelis has been to
facilitate the relationship between the occupier and the occupied,
to continue things as they are. It was never in their minds to have
a real two-state solution, to have good relations between the two
sides. And the unilateralism in Gaza is the same. Whenever you want
to allow people to leave Gaza, you allow it, when you don't want
to, you don't. The same thing will happen in the West Bank. How
could this allow for any economy there, or for social life or
security? At the same time, you are not meeting your obligations
resulting from the occupation, to provide us with basic support,
humanitarian or otherwise.
Temkin: The next questions relate to the way we could bring
together the short term and long term. There is talk of a new
political agenda/international conference/the Arab League
initiative, and I was wondering why the economic side of things
were not brought into the discussion. Is there a way of linking
that political agenda with an economic agenda, and is there a way
of linking that economic agenda with what the long-term solution
should be?
Schenker: I would like to add another question, in particular to
the Israeli participants: Can the Israeli economy continue to grow
and flourish regardless of what happens in the West Bank or Gaza,
or is there also an essential Israeli interest in seeing a
resolution that moves beyond the current situation?
Kleiman: Unless Qassams start flying from the West Bank into
Israel, I don't think it makes a difference to the Israeli
economy.
Brodet: It's more complicated. From a more comprehensive
perspective, if Israel is still in conflict in the region and our
defense expenses vis-à-vis our GDP continue like the last few
years, we can maintain sustained growth of about 4-5%, but to my
view Israel should grow 6-7%. So Israel has paid a price from the
point of view of growth, even if the world now perceives the risk
in Israel as the same as in the rest of the world. So in case of
peace or good relations in the area, Israel could benefit from it.
It's true that we've learned in the last 60 years how to manage our
businesses and economy even in a conflict situation. There was a
time in the 1970s and 1980s that we paid a very high price in our
expenditure for our defense, but taking out this period we have
managed very well; but we can manage better.
The Palestinians didn't make such strategic economic plans and
decisions, because they were fighting for their independent state
and nationalism. It is very understandable from their point of
view, but they paid a very heavy price for this situation: They
missed the economic opportunity of the 1990s. There was a period
when they continued to bring their national case to the
international podium but didn't continue their efforts with the
internal economy and internal arena. Personally, I am more
pessimistic about the Palestinian situation, even if a Palestinian
state is established in the near future. They lost the Israeli
case. Even if in November there is a conference with Bush and in
December they declare a Palestinian state, and Israel is evacuated
from 95% of the territories - let's dream of such a scenario - it
will not be the same as in the 1990s. They will lose the Israeli
market, and for them it's a heavy price. Because even if they are
in a situation where there will be a state, they can get good aid
and assistance from the international community - Tony Blair will
give them $3 billion - but even that will not compensate for
relations with Israel. Economic relations with Israel are worth
more than $3 billion a year in the long term.
Kleiman: You were asking if the situation would deteriorate
compared to the current one, and I don't think it will. I
completely agree with David on the effects of an improvement in
security, except for one thing: We may have peace with our
neighbors, but if there is something like Iran somewhere, these
could require very heavy expenditures; David knows this better than
I.
Al-Abid Karakrah: David said that we lost the Israeli case,
economically or politically. The Palestinians are saying that the
Israelis lost the Palestinian case because we have not gained
anything from the peace process. When they evaluate the peace
process, they say, "We did not gain anything: not territory, nor
independence nor an end to the occupation." On the contrary. They
believe that the peace process became a disaster for us. You have
to take into account not only public opinion on your side, but also
on the other side, your neighbors, and unless you start to concern
yourselves with your neighbors' opinion, I don't think we will get
anywhere except to continue this circle forever.
Now, despite what happened in Gaza - it's a local crisis and in a
way related to regional crises as well - there is an intention to
hold an international conference. We believe that by having the
Arab countries within that international conference with the
Americans and Israelis, if we can use it in the right way and
manage to come up with some model on the principles of finding the
solution to the conflict, this will be an added value to the
Palestinian leadership, in that they will have the backing of the
international community and, for the first time, from the Arab
countries as well. Then there will be a push for the future.
Without any economic development, it will not be a success story;
there should be a parallel effort. If the international conference
succeeds, then you have to have a parallel economic package that
will support the implementation of that peace process. Both can
complement each other and can even be the missing link with
security, as the third part of the triangle, the triangle of
politics, economics and security. The three are interrelated. If we
have the international conference and if we have the economy, it
can influence the security issue and make it more manageable. We
have to close that triangle, so that we can be optimistic in the
future.
Kleiman: When the peace process started, there was this attitude
that economic well-being would lead to political solutions, an
attitude exemplified by Mr. Peres. It didn't work out like this. I
think there is a certain asymmetry here. Economic deterioration
could have an adverse effect on the political side; economic
improvement does not necessarily assure that the politics will work
out well.
Tahboub: Economic improvement is a prerequisite.
Kleiman: It's a requirement, but not sufficient. Now, I think that
Mr. Blair's present effort will be the last time in a long time
that the international community will be willing to cough up a
large sum of money for the Palestinian case. That's my
theory.
Temkin: I am asking about what can be done. Given the present
situation, let's think about short and long term together.
Kleiman: I would say that Israel should gradually try to ease
access of the Palestinians to the Israeli markets - the goods
market. There is small chance in the labor market; you have to
remember that it also depends on the employers, and they've
discovered the joys of employing the Chinese.
Al-Abid Karakrah: I understand that they are looking to legalize
50,000-60,000 Palestinian workers.
Brodet: Never 50,000-60,000. The Israeli market does not have the
capacity to absorb such a quantity.
Tahboub: I agree 100% with the description of the situation in
Israel, the feelings towards Palestinians. Now, I don't care how
much Blair will fund us; this is of the lowest relevance. The first
thing we have to remember is that in the Arab countries now there
is a surplus of petroleum money that is flowing to Jordan. Israel
can decide to fully separate from us, like what happened in Gaza.
Israel leaving 95% of the West Bank is a dream. What I am speaking
of is the consideration of the face values versus the sophisticated
policies.
And linking politics to economics, what we need this time as
Palestinians, what we want the world to help us with and what we
want Israel to do is to make a decision. They don't want to employ
Palestinians? Well and good. They don't want to give market access
for Palestinian goods? Also well and good. But you have to give us
the enabling conditions to leave you: access to the world, flow
between us and whichever direction you want us to go. I strongly
support the idea that our best trading partner is Israel. But if
Israel does not want us to be a trading partner, then let us have a
full separation, not a one-sided separation - meaning not only
preventing Palestinian goods from coming to Israel, but giving us
the right to buy our $3 billion worth of goods from other
markets.
Second, I expect lots of petroleum money, and I hate to say this,
but if the separation wall is completed and if the Israeli security
concerns are accommodated, then there should be no justification
for Israel to prevent Arabs and Arab money from flowing into the
West Bank. If we accommodate all of Israel's security concerns, and
if we accommodate all of its political concerns, it's time for us
to be free. Give us a chance to engage with whomever you want us to
engage with, either west or east. If it is east, call it petroleum
money for our aspirations, for solidarity - there is a $1 trillion
surplus in the Arab world.
Israel has to make a choice how it wants to disengage from us, but
this half-and-half disengagement should not continue. Israel will
be benefiting from Palestinians. We will be the bridge for Israel
to go to the Arab world, and I think this is more valuable than
what you are giving us. In the future political scenario there
should be a decision on whether Israel is considering us a good
neighbor for economic cooperation. And, by the way, all the
veterans of the Paris Protocol devised what we call an economic
permanent status model. We understand what mutual interests will be
gained.
Brodet: There is a hidden assumption here. What he is saying is
that there will be good political relations and good security, if
this were to be fulfilled. But the situation is…
Tahboub: Close the doors of the wall and you will see.
Kleiman: It is not enough. If we close the doors of the wall and
there are Qassam rockets, you will not feel safe for investors from
Qatar or Kuwait or Jordan.
Tahboub: We will accommodate all your security concerns. We will
bring international forces to the West Bank.
Brodet: I'm not the security person to give you the recipe for it,
but whenever there is a long period of quiet, money will come not
only from Qatar but also from Tel Aviv. It's not either/or.
Tahboub: It is either/or. I know this is what you usually like to
give, a hybrid of everything that you are controlling. I don't
think that any Palestinian political vision will accept living
under the same political situation as Gaza. No Palestinian will
sign or vote for no access for the Palestinians. If Israel wants to
disengage, it is their choice, and a disengagement that keeps the
door open for re-engagement in the future is OK, but we need to
have access to wherever we want to go. I am speaking about surplus
petroleum money that is extremely beneficial, and I am speaking
about Palestinian diaspora wealth. Mr. Blair will not get anything,
but the Palestinian diaspora wealth can do much for the
Palestinians. The only question is how Palestinians or Arabs will
be able to invest money in this area. We can go to a service
economy, or to an agricultural economy; we can lower our per capita
or standard of living. There are many options.
Temkin: Can we go to the issue which has been raised here,
separation and integration, and if we are going to separate, let us
separate gracefully.
Kleiman: If we can separate gracefully, there is no need to
separate. That would mean that there is no fear of any violence
from the Palestinian side, and in that case there is no particular
need for separation, except for people with some specific
ideology…
Tahboub: And why are you separating the West Bank now from
Israel?
Kleiman: For security.
Tahboub: What security concerns do you have now?
Kleiman: If the situation is such that we can separate amicably,
then there is no need for separation unless the Palestinians wish
it for a political reason. I won't blame them if they say: "We had
enough of this Israeli embrace; we want to get rid of it, even at a
cost."
Tahboub: You mean the West Bank is not peaceful now?
Kleiman: No.
Tahboub: For the last three years? Why are you separating
now?
Kleiman: When there is security, I don't think there will be any
objection against people moving wherever they want or for money
going in from wherever, as long as there is no suspicion that it is
Iranian or Al-Qaeda money intended to finance certain people. The
two things are not mutually exclusive; on the contrary, that was
exactly what we spoke about in the 1990s.
Tahboub: You want me engaged to one, not to several?
Kleiman: Not at all, on the contrary.
Brodet: This is economics. In economics you can marry Europe, the
U.S. and Japan.
Kleiman: If you go only to the east, then you are in trouble. You
may survive but at a lower standard of living than if you go west,
not only to us. For example, people used to complain that the
subcontracting in Gaza was demeaning, etc., but some of them were
accessing the world market. How? An Israeli firm sent them jeans
for them to put on the back pockets, and then the jeans were sent
to the U.S. and Gap or some other firm used to put its label on
them. So these people in Gaza had to adapt themselves to
international standards. Ideally the Palestinian economy should be
facing the whole world.
Temkin: I want one minute from each of you on: Where is the way
forward?
Brodet: On the political side, security, on the economic side,
infrastructure and institutional building. This is what I wish for
the Palestinians as the starting point for any direction, east or
west. As a professional economist I am saying the way forward is to
improve the infrastructure and the institutional framework.
Tahboub: I want the Israeli military forces to give up their
military presence in Palestine in order to achieve peace and
security for Israel, and to see how valid the theories of Ephraim
Kleiman are.
Al-Abid Karakrah: Ending the occupation is the only way of creating
a chance for the Palestinians to adopt any model that can be
implemented in the region as a whole.
Kleiman: Ending the occupation might be a necessary condition; it
is not a sufficient one. I would like to warn my Palestinian
friends that they will discover that a lot of the problems that
existed before will still be there after occupation has ended.