Published On: Mon, Jun 8th, 2015

Peace worth $123 billion to Israel in 10 years – RAND study

A RAND study sees per capita income rising 5% for Israelis and 36% for Palestinians in a two-state solution.


A peace agreement with the Palestinians would be worth $123 billion to the Israeli economy over ten years, according to research published by US-based research institute RAND Corporation.

The RAND study sees that the Palestinian economy would also benefit, even more than the Israeli economy. RAND estimates that a peace agreement would be worth about $50 billion to the Palestinians over ten years, and that their per capita income would rise by 36%, compared with a 5% rise for Israelis.

The researchers base on findings on historical precedents, published information, and interviews with experts.

Seven key findings were identified:

A two-state solution provides by far the best economic outcomes for both Israelis and Palestinians. Israelis would gain over three times more than the Palestinians in absolute terms — $123 billion versus $50 billion over ten years.

But the Palestinians would gain more proportionately, with average per capita income increasing by approximately 36 percent over what it would have been in 2024, versus 5 percent for the average Israeli.

A return to violence would have profoundly negative economic consequences for both Palestinians and Israelis; per capita gross domestic product would fall by 46 percent in the West Bank and Gaza and by 10 percent in Israel by 2024.

In most scenarios, the value of economic opportunities gained or lost by both parties is much larger than expected changes in direct costs. Unilateral withdrawal by Israel from the West Bank would impose large economic costs on Israelis unless the international community shoulders a substantial portion of the costs of relocating settlers.

Intangible factors, such as each party’s security and sovereignty aspirations, are critical considerations in understanding and resolving the impasse. Taking advantage of the economic opportunities of a two-state solution would require substantial investments from the public and private sectors of the international community and from both parties.

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