A Good Plan – IF We Cooperate: Peace to Prosperity Analysis

Debate for Peace be featuring responses of DfP students to the recently released Peace to Prosperity plan. The following analysis written by Yaari Cohen of Kadima high school focuses on the economic portion of the plan (released first, but currently found in the second portion of the plan). The full text of the Peace to Prosperity plan can be found here.

 

Peace to Prosperity (Economic): a Critical Review Part 1

 

Written by Yaari Cohen

The peace to prosperity plan is another attempt by the United States government to establish a more safe and stable Middle East. Whether the US is ultimately motivated by a goal to further American interests, or simply to stabilize a chaotic region,or both, is moot to the point of this review. Thus I will attempt to focus on the different aspects of the plans and how these might be implemented, rather than on any political point of view.

The entire Peace to Prosperity economic plan is a massive 40-page document that entails 3 different initiatives, which include 10 programs, each of which addresses a different aspect of the issue of the economic state of the Palestinian people in the West Bank and Gaza. This will be a 3 part article, with each part focusing on a separate initiative. This is part one, taking a closer look at the first initiative.

The first initiative: Unleashing economic potential by opening the West Bank and Gaza, is a detailed 4 part plan which explains how via the opening of the West Bank and Gaza not only physically but also economically, the economy would be capable of sustainable rapid growth.

The first program of this initiative is primarily focused on the reducing of constraints on the Palestinian economy by opening the West Bank and Gaza to “Regional and global markets.” Doing this by first investing largely in transportation and infrastructure, this will largely help increase the level of competitiveness of Palestinian products while also allowing those who live inside the West Bank or Gaza to travel to neighboring countries such as Israel, Jordan, or Egypt. 

This idea, in my opinion, is a very clear winner.  

It has been shown in many cases how investment in transportation and public infrastructure can improve an economy. It helps with the process of exporting goods abroad, as well as helping with importing goods from different countries. This is without mentioning how much tourism can help an economy to thrive, and without adequate infrastructure, that is simply not possible. Up until this point, transportation in the West Bank and Gaza is extremely lacking, with only very limited harbors in Gaza, and few and non-effective ground routes.

The second program of this initiative is less focused on transportation and more on essential infrastructure, a life aspect that is severely lacking in the West Bank and Gaza. An article written by Matthew C. Ives (A senior researcher from the University of Oxford), examines this issue deeply, by assessing the growing issue with essential infrastructure systems in the West Bank and Gaza. one of the biggest issues is that the almost non-existent infrastructure development cannot match the rate of population growth.

The second program explains how billions of dollars would be invested in essential infrastructure, including water, electricity and more, with the immediate goal of within 1 year having every house connected to electricity for at least 16 hours a day. This program also claims that the different relevant authorities will receive “training and assistance to manage this infrastructure and to increase competition to keep costs low for consumers.”

While this is most definitely a worthwhile goal, the different methods and means specified in the plan are simply in my honest opinion insufficient. They do not address one of the largest issues: the rapidly growing population and its limited space.

So far we have looked at two different parts of the first initiative, now I am moving on to the third program, and likely one of the most flashy parts of this entire economic plan, promising more than a million new jobs for Palestinians, a jobs program nearly unrivaled in its size. This program’s main goal is “Promoting private sector growth”. This program focuses on investments in small to medium-size businesses, as they are “the heart of the Palestinian people”

The early-stage goals include the removal of constraints to growth in order to increase GDP (gross domestic product) and create many new jobs. With the Palestinian economy sitting currently at around $10 billion dollars with a GDP per capita of just $1924 in the West Bank and $876 in Gaza, this plan is needed without a doubt. The real question is, what are the odds of this ambitious plan working?

Well, surprisingly, with cooperation from the Palestinian authorities, the odds look quite good. While reform to core laws and regulations is needed in order for incentives to be given to small to medium-size businesses, the core principle of this program is correct. Through investment into Palestinian Micro, Small, and Medium Enterprises (MSME), more high-quality jobs for the working class will become available, a factor which is almost certain to incentivize larger international companies and organizations to invest in this area. However, it should be noted that full cooperation from the Palestinian authority is not just an option, it is very clearly a necessity in this case. With all that aside there is another restricting factor on this program, which is how reliant it is on the first and second programs, and how without them it has nearly 0 chance of succeeding.

And finally, let’s take a look at the fourth program of the first initiative:

This might be the most controversial part of the first initiative, in this section, the proposal addresses the issue of “Strengthening regional development and integration.”

What does this mean? Basically, improve commerce and implement trade with neighboring countries, such as Jordan, Egypt, and of course, Israel. This program talks about how the West Bank and Gaza’s economy should “capitalize on growth opportunities by improving access to strong, neighboring economies”, but in practice what does this mean?

Basically, it suggests different methods and ways in which the Palestinian authorities can learn from stronger neighboring countries by having an increased amount of regional investment (especially given the fact that currently, regional development in the West Bank and Gaza is minimal). This also addresses other key factors, such as cross border services, and other joint country operations. An example given in the plan is “the development of a major wastewater treatment plant.”

Additionally, this program encourages regional tourism, and mentions (correctly in my opinion) how much the Palestinian economy would benefit from cross tourism with neighboring countries such as Jordan and Egypt. This project also offers support to “private companies or public-private partnerships to develop tourism sites, transportation options, and hotel and restaurant accommodations across Egypt, Jordan, and Lebanon”.

In conclusion, while there are many flaws to the first initiative, my early conclusion is that the benefits outweigh the flaws, with the glaring issues being the clear and blatant need for complete cooperation from both sides in order for this plan to follow through, especially in regards to the implementation of new infrastructure. I will give a more in-depth analysis on the cooperation needed in part two.


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