Joint Palestinian-Israeli-International
Economic Working Group
In January 2010, the Aix Group began its fifth stage of research: "The Arab Peace Initiative and Israeli-Palestinian Peace: The Political Economy of a New Era."
In this work, the Aix Group seeks to review the range of economic frontiers which will emerge from the implementation of the API. Four working groups are tackling different issues from a regional perspective: trade, labor, and investment; institutions; cooperation in infrastructure; and regional aspects concerning the Palestinian refugees. The work will analyze the political economy of the region in order to highlight the economic consequences of a permanent regional peace agreement.
In June 2010, the Aix Group published its fourth stage of research: "Economic Dimensions of a Two-State Solution between Israel in Palestine, Vol. II." This work represents an extension and elaboration of the Aix Group's previous work on the economic dimensions of final status issues:
(1) "The Big Picture": The Political and Economic Alternatives Facing the Israelis and Palestinians" includes an analysis of the major issues affecting Israelis and Palestinians in 2009 explaining the failure to achieve a permanent agreement so far. The paper focuses on Aix Group's reverse engineering approach and addresses also the asymmetry in power between the two sides. click here.
(2) The Territorial Link paper analyses the important geographical, and economic contiguity of the Palestinian state; how to connect the West Bank and Gaza and what are the best options from both sides' perspectives. click here.
(3) The Jordan Valley paper unveils the potential of this region for the Palestinian economy; how to move forward economically, with identified immediate, short and medium term actions. click here.
(4) The Palestinian Refugees paper covers further mechanisms on both the national and international levels which are necessary to implement a solution, and the roles and responsibilities of each party in the implementation; In particular the paper elaborate the work of the Group in 2007 by proposing a more detailed structure for the International Agency for the Palestinian Refugees (IAPR) and explains that this agency should start working as soon as possible.
(5) The Union for the Mediterranean paper analyses specific initiatives which need to be undertaken by all parties and especially by the EU in order to ensure that an equitable agreement between Israelis and Palestinians is reached, and the idea of a Mediterranean Union is successfully implemented. click here.
The objectives of this phase in the Aix Group work, undertaken by joint Israeli-Palestinian-international working groups, is to examine the economic dimensions of the conflict, including current economic and political issues which affect the final status negotiations and inform decision-makers and the public.
The Aix Group Steering Committee. From left to right: Dr. Samir Hazboun,
Prof. Arie Arnon, Prof. Gilbert Benhayoun, Mr. Saeb Bamya, Dr. Ron Pundak.
The Aix Group Advocacy Trip to the United States
From June 14-18, 2010 the Aix Group visited New York and Washington, DC to present their research and discuss the current Israeli-Palestinian political-economic situation with senior policy makers, international representatives and leading civil society members. While in New York, the Group met with, among others, the UN Assistant Secretary General for Political Affairs, the Spanish Ambassador and current head of the EU delegation to the UN and the American representative to the UN Economic and Social Council. In Washington, the Group met with, among others, Special Envoy George Mitchell's team at the State Department, PLO Representative to the United States Maen Areikat, French Ambassador to the United States Pierre Vilmont, House Representative Nita Lowey and the Middle East desk of USAID. The Group also participated in a private roundtable meeting with leading journalists and several public events with think tank experts.
The meetings served as a valuable forum to discuss the Group's research on the economic dimensions of a permanent peace agreement, as well as to share their unique perspectives on the overall state of the peace process. To highlight just a few points of interest:
(1) The Aix Group's work emphasizes that economic steps must be made in parallel to political progress; thus the "economic peace" strategy supported by Prime Minister Netanyahu is seemingly yet another tactic to buy time and avoid significant political compromises. In other words, business and economic agents should be the ones to legitimize a permanent political agreement, rather than being used as a justification for continuing the status quo.
(2) Although the West Bank has experienced impressive economic growth in the past few years, a deeper analysis of the drivers of this growth suggests otherwise. International donations account for a significant percentage of Palestinian GDP; coupled with the comprehensive public reforms being implemented in the West Bank, this growth is unsustainable in the long-term. Indeed the Palestinian private sector has played a very minor role in the economy's growth. Furthermore, if one also considers the situation in Gaza, the outlook is even bleaker.
(3) The Aix Group's research offers concrete solutions to the political-economic challenges mentioned above. For example, the Territorial Link between Gaza and the West Bank could (and should) begin to be planned immediately, the International Agency for the Palestinian Refugees could (and should) be established to begin formulating a solution for the refugees, and the Paris Protocols should be reevaluated and in its stead a Free Trade Agreement should be considered.
(4) Although the current talks led by the United States are better than nothing, so far they have effectively reinforced the strategy of negotiation for the sake of negotiation, a strategy which has failed time and time again since Oslo. This strategy only plays into the hands of those who wish to maintain the status quo, rather than resolve the conflict. Instead, we must move immediately and directly towards final status negotiations.
(5) Time is critical and the status quo is fragile. Although Salam Fayyad and Abu Mazen have accomplished a large part of their domestic reform plan and have communicated their readiness to negotiate with Israel, failure of the two to bring significant progress on the political front is likely to jeopardize their credibility within the Palestinian polity, not to mention undermine the modest economic progress already made.