Israel's Short-sighted Opposition to Palestinian Statehood Is Dragging Down Its Economy
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Who could have imagined even a year ago that the Arab Spring would blow a fresh wind across the Middle East, opening minds and hearts to new possibilities. Now in the next chapter of this remarkable story, the Palestinians are taking their quest for statehood to the United Nations. Perhaps no other issue in the Middle East packs as much symbolic value as this one, and holds as much potential to be a catalyst for profound change.
But the reactions of the US and Israeli governments are key to what happens next. Both should jettison their fears and old thinking, and embrace this wind of change. How? By boldly supporting the Palestinians’ bid at the UN.
The reason to do this is not only that it's undeniably the right thing to do morally, but also because it's a smart thing to do from Israel's economic standpoint. The Israeli economy is a mess, which has resulted in massive demonstrations and occupations of city centers by Israeli protesters that have crippled the domestic scene. On September 3, some 450,000 Israelis thronged the streets of Tel Aviv and three other towns, calling for affordable housing, cheaper basic food and better social services.
Israel has much to gain from a peaceful and prosperous Middle East, as well as to contribute to it. In June I attended a roundtable discussion in Barcelona which featured over a dozen young leaders of the Arab Spring, from Egypt, Tunisia, Algeria, Jordan, Palestine, Morocco and more. It made me tingle to hear these brave young people tell about the successful struggle they were waging for freedom, democracy and a better life, albeit at great personal cost and danger. The realization struck me over and over, "These are the people who my country should be wholeheartedly supporting.” They had strongly embraced much of the American/western creed, and they clearly represent the best possible future for the Middle East.
The region needs the vitality and budding entrepreneurialism of these young Arab leaders. And Israel, being a central part of the region, likewise needs these young Arab leaders. A more farsighted Israeli leadership – as well as American leadership – would recognize that a peaceful and prosperous Middle East and Mediterranean basin is in Israel's best interest. A transformation of the region by the emerging democracies and developing economies of the Arab Spring would contribute much to Israel's own peace and prosperity. Israel is an island in a sea of potential commercial opportunities which would be greatly expanded by a deepening of the Arab Spring.
Indeed, Israel could become a key economic and technology hub for the region, and lead a badly needed regional Renaissance. Premier Israeli companies like Mellanox, Allot Communications, SodaStream International, EZchip Semiconductor, Orbotech and Teva Pharmaceutical are well-positioned to benefit from a revitalized regional economy. Israel could be to its region what Germany has been to Europe – the hub of a robust commercial zone where a rising tide lifts all boats.
All that's needed is some vision and courage to stare down the extremists on both sides. In effect, Israel would be swapping some land for real prosperity and future opportunity, as well as normalized relations with its neighbors. People who trade together generally do not make wars against each other, as Germany, Britain and France have discovered.
But instead the Israeli leadership under Prime Minister Binyamin Netanyahu is trapped in fossilized thinking centered around land disputes. His government is arguing over who gets the olive trees instead of over how to maximize the regional economy. Like the United States, it is plowing precious resources it can ill afford into its military, subsidized with $3 billion annually from US taxpayers who are stretched thin by slashed budgets and austerity.
Despite that sizable American subsidy, still the Israeli economy is a mess. Rather than enabling the Netanyahu government’s bungling of both the domestic economy and relations with the Palestinians, the US government should push the Israelis to get more serious about negotiating over a two-state solution. Israeli foot-dragging over Hamas not recognizing Israel's right to exist might seem justified, but it really just provides a fig leaf over the failures of Israel’s own short-sighted leaders. After all, nothing will undermine Hamas’ credibility more than making gains in bilateral negotiations with the Palestinian Authority.
The momentum of the Arab Spring is still gaining velocity, from Libya to Syria, but the US and Israel are about to miss another historic opportunity. If Nixon could go to China, then Netanyahu should be able to go to the Palestinians and say, "Go to the UN. We will stand with you and support your petition." And then all parties should return in earnest to the negotiation table to settle outstanding claims, inspired by the recognition that an Arab Spring combined with an Israeli Spring would be a watershed moment for this still young 21st century.