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Even before the signing of the Declaration of Principles, the prospect of an Israeli-Palestinian accord had become a legitimate topic of discussion in wide circles, particularly among economists and businessmen. Hata'assiyanim, the quarterly journal of the Israeli Industrialists' Association, devoted its entire April issue to what it called, "The Economy of Autonomy and the Israeli Economy." In it more than 30 articles by Israeli and Palestinian businessmen, economists, academics, and political leaders take a look at the economic implications of Palestinian autonomy.
The tone is set in a short introduction, which emphasizes the connection between the peace process and local economic developments, and concludes:
"The impression is that, despite sharp differences of opinion and different points of view, the overall mood is one of optimism. There is a feeling that, if businessmen and industrialists from both sides talk business, this will be helpful, resulting in progress toward peace agreements."
The topics range from the problem of customs and taxes to free trade, and from the availability of Arab and international capital to the degree of integration or disengagement of the Israeli and Palestinian economies.
Dov Lautman, the former head of the Israeli Industrialists' Association, assumes that the Israeli economy and that of the autonomous Palestinian region will remain closely entwined in the immediate future. He advocates free trade in both directions and states that Israeli businessmen should not fear competition from their Palestinian counterparts. An increase in Palestinian standards of living, he points out, means increased purchasing power, and he sees in this an opportunity for Israeli manufacturers.
"Our response to autonomy should be positive and mature," he concludes, "an economy that is now being exposed to competition from third parties should not fear competition from the industry of the autonomous region. Israeli industry is strong enough to cope with the structural changes that will come with autonomy. We have faced more difficult and more painful changes in the past."
This contention is echoed on the Palestinian side by Dr. Samir Abdullah, an economist and a member of the Palestinian delegation to the current peace talks, who points out that current Palestinian industrial production is only some two percent of Israel's. How can that be threatening? Noting that Israel will continue to be the biggest employer of Palestinian labor and the largest market for Palestinian produce, Abdullah calls for the lifting of all restrictions on trade between Israel and the territories.
The thesis that Palestinian economic development is good for Israel, and that consequently all the barriers should come down, is strongly contested by several Israeli contributors, among them Muzy Wertheim, chairman of Coca Cola in Israel. Warning that the Palestinian penetration of the Israeli market could throw tens of thousands of Israelis out of work, Wertheim calls on the Industrialists' Association "not to succumb to euphoric predictions, but to suggest to Israeli decision-makers practical arrangements that will permit the Palestinians to administer their own economy, but will control the flow of goods between Israel and the territories to ensure fair conditions of competition."
Prof. Efraim Kleiman of the Hebrew University is another contributor who sees Palestinian economic growth under autonomy as both probable and good for Israel; but he sounds an alarm bell to the Palestinians. Challenging "political voices in the territories who advocate economic disengagement from Israel," he writes, "In my opinion the realization of such a disengagement will bring about an economic disaster for the Palestinians."
Against this, Samir Huleileh, director of the Palestinian Economic Development Group, EDG, while considering the possibility of an eventual Benelux-type arrangement with both Israel and Jordan, states that the Palestinians will not agree to a unified economic framework with Israel.
He predicts that the Palestinians, while making use of both Jordanian and Israeli economic infrastructures will create their own independent economic institutions. He further notes that purely economic considerations will not necessarily be the deciding factor in making decisions.
Israelis should not be permitted to invest in the territories, he writes, until the matter of control over the land is thrashed out. Nor should Palestinians enter into joint ventures with Israelis, or put up their property as a guarantee to an Israeli bank, until the land question is resolved.
"Ideas for future economic cooperation are positive," concludes Huleileh, "but a headlong rush into joint business initiatives could destroy the mutual confidence that must be built up in the interim period."
Ibrahim Haddad, the owner of an agricultural machinery plant in Jenin, suggests that Israeli enterprises that have depended on cheap Palestinian labor will not be able to survive the establishment of autonomy. His solution is to move some of them lock stock and barrel from Israel into the territories, and let the others wind up. Haddad warns against an exaggerated reliance on foreign investment, but hopes for eventual partnerships between local and foreign business men.
Despite the differences of opinion - and even an occasional sour note - it is difficult not to be impressed by the sensitivity, pragmatism and lack of rancor on both sides. Most of the Israeli contributors show an understanding of Palestinian aspirations; the Palestinians are at pains to allay Israeli fears; both sides look to the future rather than the past. Some see dangers; but more see possibilities.
The majority opinion is that economic development, business and trade is the opposite of a zero sum game: all sides win. Is it too much to hope that the politicians will catch up with the businessmen and the economists?

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