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Moshe Dann , a former asst. professor of History (CUNY), is a writer and journalist living in Jerusalem.
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By Moshe Dann
December 30, 2004
"From an economic point of view Oslo was a disaster," said Ezra Sadan, one of Israel's leading economists. A well-respected advisor to Prime Ministers for the last 20 years, Sadan (who runs a consulting firm, Sadan and Lowenthal, Ltd) explained that "disengagement" would be economically ruinous for Palestinians.
Since the outbreak of the latest Palestinian terrorist war against Israel four years ago, the use of Palestinians in the construction and household sectors, for example, has plummeted.
"My mother," Sadan offered in an easy-going press briefing held at the Jerusalem Center for Public Affairs, "would never think about hiring anyone except a Palestinian woman to work in our home; we considered them part of our "family." But not today. And that has been a change for the good." People are simply afraid, he observed, and prefer to employ Asians or South Americans to work in their homes.
Once a bountiful source of employment, the number of Palestinians working in the construction industry today has declined dramatically. Instead, Chinese and Romanian workers are employed. Although many thousands of Palestinians continue to work in agriculture in Israel, these jobs too are being filled more and more by foreigners.
Sadan refused to be drawn in to political comments about the repercussions of the current economic policy on political developments, especially the effect of unilateral withdrawal on the Palestinian economy.
Sadan gave a broad overview of the development of the Israeli economy during the last forty years, citing two major turn-arounds.
The first was PM Levi Eshkol's brilliant move to join the European Free Trade Agreement which opened up Israeli markets but also gave Israeli industry a push in the right direction, a transition from a Third World status to major player among industrial giants. Today, Israel's high tech sector accounts for the bulk of its exports.
The second turning point was the Egyptian-Israeli peace agreement in the late 1970's. Israel could not afford the arms race which was draining a third of its GNP. Current levels of about ten-percent are bearable, he said, but not much more. The agreement with Egypt, he concluded, saved Israel's economy. Surely this must have been on the minds of Israeli leaders ever since, and was a prime factor in convincing PM Rabin to give the Palestinians a chance.
The opportunity blew up, literally, in everyone's face, when Arafat launched a full-scale attack on Israel, precisely at a time when Israeli and Palestinian economies were flourishing. It was not economic success, however, which concerned Palestinian leaders, but political hegemony and the destruction of Israel.
Sadan was critical of massive subsidies to Israel's tourist industry. But subsidies seem to be a way of life in Israel, along with government and private monopolies which hurt consumers and prevent the market from operating efficiently.
Asked about the European threats of boycotts, Sadan said that this was a dangerous game. "The Europeans are not simply saying they won't buy products produced in the territories, but only products produced there by Jews." He doubted whether European businessmen would allow that form of anti-Semitism to infect national economic decision-making.
Israel, he explained, holds a vital position in the transfer of goods (fruits, vegetables and flowers) from Israeli and the Palestinian controlled areas to European markets. Since the cost of replacing Israel with Palestinian marketing firms would double or perhaps triple the costs, the Palestinians are vitally dependent on Israel.
Real "disengagement" from an economic point of view seems impossible.
Politically, however, although the Sharon government is intent on forcing unilateral withdrawal from Gaza and most of the West Bank, it may be difficult if not impossible to disengage economically from the Palestinians.
Paradoxically, Israelis and Palestinians need each other. It is an interdependence fraught with difficulties and contradictions, but it also may provide the basis, one day, for some sort of rapprochement.
"For the Palestinians," Sadan concluded, "economic disengagement would be a disaster." It is this side of the conflict that has been ignored by Palestinian and foreign policy-makers, who have concentrated on political solutions and the appeasement of terrorist leaders rather than the practical and sensible economics of peaceful coexistence.
The tragedy of the Israeli-Palestinian conflict is not only in the enormous number of lives that have been lost, but the failure to alter the course of Palestinian self-destruction.
Views expressed by the author do not
necessarily reflect those of israelinsider.
 
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