JERUSALEM: Prime Minister Netanyahu s economic peace plan is not a solution to the Israeli-Palestinian conflict, but it is a step in the right direction. However, an economic peace plan should not merely aim to improve the per capita GDP of Palestinians in the occupied territories. In order to be an effective catalyst for peace, the plan must have as its ultimate goal the creation of economic interconnectedness between Israel and a sovereign Palestinian state. The basic premise of economic interconnectedness is that two peoples with extensive and productive mutual trade will not become co-belligerents because they fear endangering their lucrative and mutually beneficial economic links. There are numerous examples and case studies that have demonstrated the efficacy of shared commercial interests, most popularly, the much discussed McDonald s Peace theory that posits no two countries having McDonald s have ever gone to war against each other. No one would expect the economically intertwined European Union to break out in armed conflict any time soon. Conversely, there are numerous instances where a lack of economic interconnectedness, and its commensurate linkages, has been identified as a possible catalyst for war. Furthermore, economic interconnectedness fosters a stable base on which to build other constructive engagements. The aforementioned McDonald's peace has frequently been rationalized by sighting the normative values that countries with McDonald's share in common-not only their taste for a Big Mac. Namely, open and liberal economies tend to develop open and liberal civil societies. These societies often prefer democratic forms of government which, in turn, create even more extensive ties. According to this view, economic linkages between Palestinians and Israelis would foster democratic institutions in the occupied territories because they would help to grease the wheels of mutually beneficial trade. A welcome result of economic interconnectedness would be increased interaction and familiarity with the "other . If successful, it could also serve as a model for different forms of cooperation on myriad issues such as the environment and cross-border medical concerns. The problem with Netanyahu's plan so far is that it has been veiled in a context which presents the occupation only in economic terms-avoiding the other aspects of the occupation that are equally or more destructive to the Palestinian people. So far Netanyahu's vision for economic peace does not include a sovereign Palestinian state. Without a state, the Palestinians would be economically susceptible to the disparity of power imposed by the occupation. Simply put, the pacifying effects of economic interconnectedness will be much greater if between two sovereign states. As a start, Netanyahu could lessen vague rhetoric and propose concrete ideas for enacting economic ties. I believe he should encourage joint ventures run by Palestinians by providing substantial incentives in the form of tax breaks, low interest start-up loans, and preference in government contracts for businesses that are mixed with Palestinians and Israelis. The United States has a successful track record with such endeavors that have been aimed at encouraging businesses owned by, or employing, certain numbers of historically underrepresented minorities or women. The United States could assist by requiring that a percentage of its significant aid to Israel be earmarked for distribution to Palestinian business entrepreneurs in the occupied territories instead of for Israeli weapons procurement. It could also increase its own direct aid to the Palestinian Authority and provide low interest micro loans to fledgling businesses. Israel and the United States should increase the valuable resources available from international government organization consultants and track two non governmental organizations specializing in development in the occupied territories. Unfortunately, any economic progress will not immediately halt violence. It is a general consensus amongst scholars in the field of conflict studies that it is not only the poor who carry out acts of violence in the face of repression. Take for example the recent plot uncovered in Britain of doctors scheming to conduct terror bombings, or the fact that many terrorists have advanced degrees and come from middle class or highly privileged backgrounds. There will always be spoilers who aspire to derail any peace process. But they can be marginalised by increased economic interconnectedness. When Palestinians and Israelis rely significantly on each other for fiscal security, physical security will soon follow. Ties created through trade, provided they are accompanied by a substantial political process, would lead to other constructive exchanges between Palestinians and Israelis, ultimately creating a platform from which to address the valid concerns of both parties in the conflict. Israeli anxiety over an unstable and hostile neighbor, as well as Palestinian concerns over lack of autonomy and freedom, would both be addressed and mitigated. Economic interconnectedness could offer many opportunities for Israelis and Palestinians to form personal relationships with each other, learn about each other's culture, and collaborate on other mutually beneficial projects-all necessary steps towards creating a warm peace in the Levant. Taylor Dewey is an intern with Search for Common Ground in Jerusalem, a fellow at the Jerusalem Institute for Market Studies (JIMS), a visiting graduate student at the Hebrew University and an MA candidate at Stanford University. This article was written for the Common Ground News Service (CGNews).
