PA Chair Mahmoud Abbas. (AP/Majdi Mohammed)

A new study points to the unsurprising conclusion that political stability and peace would bring financial prosperity to Israel and the Palestinian Authority.

Israelis and Palestinians would gain billions of dollars from making peace with each other while both would face daunting economic losses in case of other alternatives, particularly with a return to violence, according to a new study released on Monday.

The RAND Corp., a US-based nonprofit research organization, interviewed some 200 officials from the region and elsewhere during more than two years of research into the costs of the Israeli-Palestinian conflict. Its main finding was that with a peace agreement, Israelis stand to gain $120 billion over the course of a decade. The Palestinians would gain $50 billion, marking a 36-percent rise in their average per-capita income, the report demonstrates.

In contrast, the Israeli economy would lose some $250 billion in foregone economic opportunities in the event of a return to hostilities, and the Palestinians would see their per-capita gross domestic product fall by as much as 46 percent, according to the study.

The findings are in line with long-time arguments that peace is in the economic interests of both sides.

“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, co-leader of the study and director of RAND’s Israeli-Palestinian Initiative.

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.

Some of the elements of the nonviolent resistance scenario are already unfolding, with Palestinians taking action to put economic and international pressure on Israel. The study found that Israelis could lose $80 billion and Palestinians $12 billion relative to current trends. But compared with a two-state solution, losses from the non-violent resistance scenario become even more dramatic: about $200 billion for the Israelis and $60 billion for the Palestinians.

Not Advocating, but Offering Tools

RAND teams are currently in the region, presenting their findings to both Israeli and Palestinians officials. The study was funded by an unnamed independent donor, and the think tank insisted it was not advocating, but merely providing tools for leaders to make good decisions.

In reaching their conclusions, researchers devised a “cost-of-conflict calculator” that factored in issues such as Israel’s defense budget, its trade relations and what it would cost to relocate Israeli citizens living in Judea and Samaria. For Palestinians, variable costs included potential destruction of property, freedom of movement and banking regulations.

PM Benjamin Netanyahu. (Marc Israel Sellem/POOL)

“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. “In a decade, the average Israeli would see his or her income rise by about $2,200, versus a $1,000 gain for Palestinians, compared with our projection for present trends. But that only works out to five percent for each Israeli versus 36 percent for the average Palestinian, meaning Israelis have far less and Palestinians far more economic incentive to move toward peace.”

RAND spokesman Jeffrey Hiday said copies of the study have been sent to officials on both sides of the conflict, including the Israeli Prime Minister’s Office and Foreign Ministry as well as the Palestinian Finance Ministry.

Prime Minister Benjamin Netanyahu stated several times in recent months that Israel is genuinely seeking peace.

Addressing the Jerusalem Post Annual Conference in New York on Sunday, Netanyahu stated: “Here’s what’s so absurd…. The Palestinians walk away from peace negotiations. They walked away from [former Prime Minister Ehud] Barak. They walked away from [former PM Ariel] Sharon. They walked away from [former PM Ehud] Olmert. And they now walk away from me.”

The Palestinians “consistently shun direct peace talks” and then call for sanctions on Israel “because there are no peace talks.” he said.

By: AP and United with Israel Staff