The Palestinians could potentially inflict economic damage to the tune of $25 billion on Israel should they resume prolonged, large-scale violence, a new study by RAND Corp, a U.S.-based nonprofit research organization, has found. The report further projected that Palestinian-led boycott initiatives against Israel may deal the economy a $6 billion to $8 billion blow. The study comprised interviews with some 200 officials from the region and elsewhere, across two years of research. Its main finding was that following a peace agreement, Israel stood to gain $120 billion over the course of a decade, while the Palestinians would gain $50 billion, marking a 36% increase in their average per capita income. The Palestinians would see their per capita gross domestic product drop by as much as 46% over prolonged violence, while the Israeli economy could potentially lose some $250 billion in foregone economic opportunities, over the course of a decade. "We hope our analysis and tools can help Israelis, Palestinians and the international community understand more clearly how present trends are evolving and recognize the costs and benefits of alternatives to the current destructive cycle of action, reaction and inaction," said C. Ross Anthony, director of RAND's Israeli-Palestinian Initiative. The study was funded by an independent donor and the think tank insisted it was not advocating, just providing tools for leaders to make good decisions. In reaching their conclusions, researchers devised a "cost-of-conflict calculator" that factored in issues like Israel's defense budget, its trade relations and what it would cost to relocate settlers in Judea and Samaria. For the Palestinians, variable costs included potential destruction of property, freedom of movement and banking regulations. The study looked into five different scenarios: a two-state solution, a coordinated unilateral withdrawal, an uncoordinated unilateral withdrawal, nonviolent resistance and a violent uprising. Not surprisingly, the economic benefit for both sides dropped considerably in each alternative scenario down the ladder. The study found that Israelis could lose $80 billion and Palestinians could lose $12 billion relative to current trends. But compared with a two-state solution, losses from the nonviolent resistance scenario become even more dramatic: about $200 billion for the Israelis and $60 billion for the Palestinians. "A two-state solution produces by far the best economic outcomes for both Israelis and Palestinians," said Charles Ries, co-leader of the study and an executive at RAND. RAND spokesman Jeffrey Hiday said copies of the study had been sent to officials on both sides of the conflict, including the Israeli Prime Minister's Office and Foreign Ministry and the Palestinian Finance Ministry. According to The Associated Press, Israeli officials declined to comment on the findings, while Palestinian officials could not immediately be reached for comment.
Conflict with Palestinians may cost Israel $25 billion
RAND Corp study finds prolonged violence by the Palestinians will see both Israel, the Palestinian Authority face daunting economic losses • Peace deal will see Israel gain $120 billion, Palestinians gain $50 billion over course of a decade, report says.
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