The Economic Road Map: Beyond the Israeli-Palestinian Conflict
Jul 01, 2005
Glenn Yago and James Prince
Publisher: Milken Institute

Every U.S. president since 1948 has proffered a political plan to solve the Israeli-Palestinian conflict and, without fail, every one of those plans collapsed. President Bush, the latest American leader to play the dealmaker, conceived the political road map as a practical thoroughfare leading to a two-state solution.

But for the first time since the conflict's beginning, realities on the ground may have overtaken the political negotiations on the road to peace. Disengagement - Israeli withdrawal from the Gaza Strip and parts of the West Bank - now makes economic development both a possible and a desirable precursor to any final political status agreements on an ultimate peace.

An economic road map, defined by common economic interests can create incentives to cease violence while enhancing the hope for peace through prosperity, more so than the stalled diplomatic process. By "privatizing" the peace process, the constituency for terror, violence and intransigency may be transformed into a constituency for prosperity and political stability.

Authors Glenn Yago and James Prince argue that a lasting peace can take hold in the region on a foundation of economic development. That foundation includes separating the Palestinian economy from that of Israel, increased transparency in Palestinian financial markets, and the introduction of new investment risk capital.

Among the sectors ripe for creating jobs, wealth and economic stability in a Palestinian state are construction, tourism, housing and the financial sector. Stimulating durable economic development and capital formation will create the employment opportunities vital to the rapidly growing and very young Palestinian labor force.

Additional background

You may learn more about the Milken Institute's work in this area by reading and listening to the following:

Read authors' Wall Street Journal commentary.

Listen to Marketplace Commentary on Economics of Gaza Disengagement, August 19, 2005.

Listen to interview with Glenn Yago on SBS Radio (Australia).