Peace Embassy Front


 

Regional Civilian Cooperation in the Middle East
A Key for Stimulating a Reality of Peace
Selected Suggestions, Solutions & Actions
Parallel to the Road-Map Negotiations

 

 

 

 

Edited & Written by

Eliezer Glaubach-Gal, Prof. Ph.D.
Chairman, The I. Foerder Institute
President, PWPA, Israel
Jerusalem, May 2003

IISP – The Israeli Institute for Strategy of Peace
The I. Foerder Institute for Liberal Studies, Israel

 

 

The Prophecy of Isaiah, Chapter 2:

“And it shall come to pass in the end of days that the mountain of God’s House shall be established at the top of the mountains and shall be exalted above the hills: and all nations shall flow into it.  And many peoples shall go and say: Come ye and let us go up to the mountain of the Lord, to the House of the G-d of Jacob, and He will teach us His ways and we will walk in His paths, for out of Zion shall go forth the Law and the Word of G-d from Jerusalem.  And He shall judge between the nations and shall decide for many peoples and they shall beat their swords into plowshares and their spears into pruning hooks.  And nation shall not lift up sword against nation, neither shall they learn war anymore”.

Table of Contents

Preface b1

Introduction

Chapter 1

Visions and Realpolitik in the Quest for a Region of 4-7

Chapter 2

The Concept and Prospect of Sustainability in the Middle East 8-10

Chapter 3

Commercial Contract Enforcement in the Palestinian Territories 11-12

Chapter 4

Trade and Investment Flows Between Israel, Jordan & the Palestinian Territories 13-14

Chapter 5

Water: Conflict or Cooperation 15-16

Chapter 6

The Impact of the DOP on the West Bank and Gaza 17-19

Law Reform in The Palestinian Territories 20

Chapter 8

The Legal Structure for Foreign Investment in the West Bank and the Gaza Strip 21

Chapter 9

Economy

The Economic Impact of the Israeli-PLO Declaration of Principles on the West Bank, Gaza Strip and the Middle East Region 22

Bibliography 23-24

Annex = Full text of the Road Map 25-32

Personal Data of the Author 33-34

Preface

IISP (The Israeli Institute for Strategy of Peace)

Purpose

“The institute will provide strategies, plans and recommendations for peace making in the Middle East region for decision makers in Israel.”

Following the “Road Map” plan for a peace settlement in the Middle East, which mainly deals with the political aspect we choose, at this stage to not interfere and leave this part of the issue to the factors related to, and propose to dedicate this paper to creating and stimulating a culture of peace and cooperation with a number of tangible suggestions which seem to us worthwhile to work on in parallel to the political struggle. 

In addition to the issues brought in this paper there are other important topics that needs addressing as joined regional ventures. Such as: transportation, communication, oil and gas supplies, joined electricity network, education, culture, youth and sport festivals.

Introduction

The “Road Map” and the global campaign that President Bush presented in his June 2002 speech and was handed over to the parties, Israelis and Palestinians, last month appears to head the regional agenda.  The “Road Map” includes two main building blocks.  The first is the normative demand that the Palestinians totally refrain from terror and combat it, implement fundamental reforms in the Palestinian Authority and replace their leadership.  The second is the operational part that stipulates that if the Palestinians fulfill the normative part, they will be able to establish a provisional state and to achieve a fully independent state in 2005 based on the end of the 1967 Israeli occupation.  The map has three main versions: one emphasizes the Palestinian implementation as the condition for the transition from a provisional state to the final settlement; the second emphasizes the interim period; and the third underlines the commitment of the Arab states to put an end to Palestinian terror. 


The Global Campaign

Main Features

In the wake of September 11th, 2001, a new global age dawned, exposing a new strategic landscape.  That day symbolizes the passage from the promising decade after the end of the Cold War to a period of war.  Many, especially in Europe, underestimated the importance of the change and found it difficult to adjust.  Curiously, President Bush and his novice team of advisors, including the National Security Advisor, who had little experience in foreign relations, found it easier to adjust to the new state of affairs and to rise to the challenge.

 

The essence of the challenge is the war that the United States feels has been declared against it.  There is a certain similarity in this to the Cold War, which posed the greatest challenge to President Truman, who came to presidency, like President Bush, with no prior foreign policy experience.  This war, actually, is comprised of the following levels:

·                The war against Terror.

·                The war against dictatorships that are developing weapons of mass destructions (WMD).

A result of this war is the beginning of a campaign for imposing democracy, as one of the main responses to these wars.  Consequently, the Middle East is at the nucleus of this campaign.

 

Terror

Along with its obvious characteristics, contemporary international terror is characterized by the ability of a decreasing number of individuals to cause increasing damage and even extreme damage to the Western economy.  The necessity to fight against terrorism will be the main component of defense policies throughout the world. 

 

Notwithstanding, because of the inability of the international community to define what constitutes an act of terror, terror has yet to be defined as a crime by international law.

 

Thus, the necessity to change the focus of American Middle East policy on the basis of the understanding that the Middle East is a nucleus of terror and states that are developing WMD and is not defined only by the Israeli-Arab conflict.

 

 

The Democratization Process

The goal that President Bush set is the attempt to “export” democracy to the Middle East as a cure for the plague of international terror.  The success rate of this policy is unclear, however, policy-makers in Washington recall the case of Japan after World War II.  Then, all professional experts claimed that it would be impossible to democratize Japan; but they were wrong.  Where in the Middle East will this experiment begin?  There are those who believe that the removal of Saddam Hussein’s regime in Iraq will be the first step.

 

One assessment is that the removal of Saddam Hussein’s regime and the formation of new political institutions and elites in Iraq will serve as a catalyst for profound changes in Iran as well.  Such a development may have ramifications for the rest of the regimes in the Middle East leading, with American support, towards democratization.  A more pessimistic assessment doubts the prospects of democratization, or, at least, views the process in terms of decades before it comes to fruition.  In any case, the question arises: if the democratization experiment in Iraq succeeds, does that mean that Iraq will be ruled by its 60 percent Shiite population supported by Iran?

 

The central question is who will succeed Saddam Hussein and which country will take Iraq’s place as the radical focal point?  Will it be Syria, who will feel more isolated than ever, or Iran, who will be distanced from the Arab States that border Israel by an American and international buffer?

 


Chapter 1

Visions and Realpolitik in the Quest for a Region of Peace

 

Visions are usually expressions of what ought to happen, not necessarily of what will happen or what is in the realm of the possible.

 

The Holy Land and the whole region is a place where everything goes; everything will be acceptable.  You can have a hundred plans.  You will have hundreds of dialogues.  The stage is so deep and so magnificent that what we ignore is the fact that basically this is a petty conflict between two cousins vying for their inheritance.  This is not, in fact, a unique conflict.  The same conflict exists in many places and cities in the world, but in Jerusalem it has an aura of history because this is the place where the prophets walked.  This is the magnet that draws in all seekers of solutions.

 

Dr. Meron Benvenisti, former deputy mayor of Jerusalem, an author, scholar and intellectual, writes frequently in Ha’aretz and elsewhere and has published widely on Jerusalem.

 

Too often and too consistently in Jerusalem today, the worst in ourselves, our sinfulness and our pathologies are transferred to God for divine sanction and approval; especially our attitudes, claims and actions toward those others who are not quite like ourselves.  We replace God by panoply of idols shaped in the worst image of ourselves.  The one God is not allowed to be the One God.  But the three faith-communities of Abraham do not merely tell of God’s love for the human person as the center of history.  All three religious stand or fall on their fundamental claim that the human being is of ultimate and absolute value.  So I ask: Can Jews, Christians and Muslims, together for the common good of Jerusalem, allow the city to be truly human?

Father Thomas Stransky

 

Father Thomas Stransky is the rector of Tantur, one of the few oases of peace in this city.

 

Canon Naim Ateek writes: My vision of the future of the city of Jerusalem is based on my firm belief in God as a God of justice who insists that all people of this world whom he has created live in justice and peace.  Two important verses from the Bible can be a point of reference for the vision I will be presenting here.  The first is from the Prophets, “What does the Lord require of you but to do justice, to love mercy and to walk humbly with your God.”  The second is, “Blessed are the peacemakers for they shall be called children of God.”

 

Canon Dr. Naim Ateek is priest of the Palestinian congregation at St. George’s Cathedral and director of the Palestinian Liberation Theology Center.

 

“If you want it, it is not a Fairy Tale”

 

As the Oslo process became more and more difficult and things seemed to be breaking down, we noticed there was less and less willingness on the part of Israeli and Palestinian intellectuals to come together and talk about subjects that seemed in the light of the pressing political issues to be quite irrelevant.  Even now these subjects might seem quite distant from the reality that surrounds us.

 

Yet we thought an institution like believes that we have to not only be responsive to political and social psychological dynamics in our societies, but we also have to try to shape those in a way that we think is possible, is feasible and is necessary.

Gershon Baskin

One century of Zionism, five decades of Israel’s existence, and Palestinian independence standing just outside our doors is a proper time for a historical balance sheet.  We shall therefore focus here on the dynamics of the collective identities of the Israelis and the Palestinians, which have evolved over a hundred years of confrontation, and on the prospects of reconciliation that will ensue between the two entities.

 

Kalman Yaron

Two momentous decisions need to be taken by the parties to this century-old conflict.  They have not been taken yet.  The one is to be taken by Israel: acceptance of a Palestinian state coupled with recognition of the fundamental rights of the Palestinian refugees and displaced.  The other is to be taken by Palestinians (and also Arabs): putting an end to violence and accepting peaceful coexistence with Israel.  These two momentous decisions are intertwined, in the sense that you cannot ensure the one without ensuring the other.  The value of interim arrangements, is whether they create favorable conditions for the taking of these two decisions.  I personally believe that the majority of Israelis and Palestinians are ready and ripe for that.

Let us first offer a definition of the culture of peace.  The culture of peace is all the values, attitudes and forms of behavior that reflect respect for life, for human beings and their dignity, and for all human rights, the rejection of violence in all its forms and a commitment to the principles of freedom, justice, solidarity, tolerance and understanding among peoples and between groups and individuals.  This is a very basic definition, which I think applies to what we are talking about.

 

The next question is why should we promote an environment or a culture of peace.  Chief among the reasons are the persistence and proliferation of violence and conflicts a diverse nature in various parts of the world and in our region.  That is reason enough for us.  Another is that there is a link between peace and development.  A culture of peace can lead to education, science and communication along with the development of respect for all human rights and the promotion of democracy, dialogue, tolerance, reconciliation and solidarity, in addition to regional cooperation and economic development, and thus sustainable human development.  That is, there is a direct link between a culture of peace and human resource development.

What are the aims and objectives of a culture of peace and the programs that will be created to enhance a culture of peace?  First, we need to promote values, attitudes and behavior in people so they will seek peaceful solutions to problems.  Second, we need to promote adherence to the values that are at the heart of the spirit of peace.  These include respect for all human rights and democratic principles; the rejection of violence and forms of discrimination; attachment to the principles of freedom, justice, solidarity, tolerance and understanding, both between peoples and between groups and individuals; and lastly, fostering the acquisition of knowledge, skills and attitudes conducive to the promotion of peace.

It is important to acknowledge that the culture of peace is multi-dimensional or multi-faceted in nature.  When we talk about its multi-dimensional nature we talk about two things: One, the number and diversity of people and groups to be involved in the culture of peace; and two, the many fields that are to be dealt with – communication, education, media, economics and so on.

How do we go about all of this?  In order to progress towards peace, one can follow a twofold approach.  One approach is indirect and consistent in developing education, science and culture in order to contribute to social progress and to combating inequalities.  The other is direct and aims at placing education, science and culture in the service of human rights and international understanding.  It is this direct action, which is designed to construct peace in the minds of men – in other words, to change value systems, attitudes and behaviors. 

Ron Kronish

 

Chapter 2

The Concept and Prospect of Sustainability in the Middle East

 

The Middle East is about 85 percent desert and just 15 percent arable land plus forest and urban areas.  A large portion of our area is not sufficient to support some kinds of life. 

 

Referring to the recent information from the World Bank on the issue of sustainability, issued a report on environmental strategy toward sustainable development in the Middle East and North Africa.  They speak about seven issues.  Water supply is going down, oil production per capita is going down and tourism revenues are going down, while land degradation, air pollution, health cost per capita and urban waste water treatment discharge are going up.  Those are some rough indicators of the whole situation.

 

In 1965, the GNP per capita, excluding Israel, was $1,500, which increased to $2,300 in 1980.  It went back to less that $1,700 in 1990.  That was due to many problems: oil prices, increasing population and a great deal of over-exploitation of resources in the region.

 

Sustainability means working with the environment in order to achieve economic growth while saving the environment, working with the environment rather than exploiting it and causing its degradation.  Today the Middle East is opening new doors for cooperation and for cross-boundary environmental problem controls to some extent, and perhaps exchange of expertise and exchange of knowledge among the countries. 

 

Sustainability is a whole process rather than one process or a partial process.  To start planning for sustainable development in the Middle East, we need to reshuffle our current policies and our current economic development plans and start on a new basis.  This basis should take into consideration our scarce resources; mainly water, because the Middle East is the poorest region in the world in water, quality and quantity.

 

The increase in population is causing tremendous pressure on resources.  In addition, we have many social, religious and traditional constraints that are hindering development and change.  But the new generation should work together throughout the entire region.  We should share the responsibility and the knowledge that we have in order to achieve the desired benefits.

 

This report indicates that there has been tremendous progress in the region.  Infant mortality decreased by 50 percent.  Life expectancy increased from 48 years to 64 years.  The literacy rate increased to about 90 percent for the elementary schools, 47 for the secondary schools.  The health services have developed tremendously.  This is why infant mortality improved.  But water resources are being depleted in a very dramatic way.  Jordan, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Emirate and Yemen are over-exploiting their resources by a hundred percent.  Other countries are facing tremendous problems in water quality: Algeria, Egypt, Iraq, Jordan, Morocco, Syria and Tunisia.  60 million people in the region do not have access to good or healthy drinking water.  95 million do not have access to proper sanitation.  45 million are living in urban areas where air quality is lower than accepted standards or levels.

 

Deterioration of natural resources, soil erosion, and desertification, loss of biodiversity are widespread and acute problems in areas such as Algeria, Morocco, Tunisia and Yemen.  In addition, industry accounts for about one-third of the GDF of the area, but is causing tremendous and acute industrial pollution problems, and these problems are increasing every day.

 

Another issue is cultural heritage.  This area is one of the most important in the whole world in terms of cultural and historical monuments and architecture and archeological sites.  Income from tourism is about $9 billion, but in many areas tourism has caused a tremendously devastating environmental impact because there is no action plan or guidelines for appropriate and safe tourism.

 

If we continue at the current fertility rate, the population of the region will reach approximately 330 million by the end of the century, and the growing demands on water and land will increasingly be a problem.

 

Because of such development there will be a high increase in electricity and power generation.  This again will cause a huge air pollution problem mainly because we depend totally – almost 95 percent – on fuel-powered generation systems.  This is very polluting in terms of sulphur, oxides and other kinds of pollutants, plus particles.

 

It seems that we are facing a very unpromising future.  In the last ten years sustainable development issues have been hot issues all over the world.  Such as: Seeking Harmony – People and the Environment; Environmental Law and its Enforcement in Israel, the West Bank and Gaza; Education for a Better Environment; The Role of Outside Parties in Solutions for Environmental Problems in the Middle East; and Promoting Environmental Cooperation in the Middle East.


Chapter 3

Commercial Contract Enforcement in the Palestinian Territories

 

 

The Peace Process in the Middle East has heralded the formulation of areas of Palestinian autonomy in the West Bank and Gaza Strip.

 

Since the Oslo Agreements were signed, beginning with the Declaration of Principles in 1993, and especially since the founding of Palestinian autonomous areas in the Gaza Strip and Palestinian-populated areas of the West Bank in 1994 and 1995, the hope for a new economic reality has made a positive about-face.  Palestinian authority now presides over autonomous areas with the hope of creating a vibrant and successful economy.  This is one of the goals of the Peace Process, since it is assumed that an atmosphere of economic success and business opportunities is truly conducive to a real and lasting peace.  In this respect, the Palestinian Authority has benefited from the financial assistance of many nations and international organizations.  Entrepreneurship, development and investment, discouraged and non-existent for decades, are now enthusiastically embraced. 

 

The legal framework for conducting business must also develop, in order to facilitate the desired results.  Contract law is the most basic foundation of this framework.  In as much as any business enterprise is undertaken among individuals, some buying and some selling, some designing and some building, some lending money and some borrowing, contract law addresses the relationships among all these participants.  Contract law lends the force of law to any agreement amongst individuals, arming entrepreneurs with the confidence that their investments will not be undermined due to the untrustworthiness of others.  Contract law defines the rights and duties of the sides to agreements of all kinds, and ensures that a person many only break his word upon pain of a penalty, generally to compensate the injured party.

 

 

 

In addition to a well-stated substantive contract law, a legal system must have adequate procedural law to provide any interested parties with the means of addressing their grievances, such as a breach of contract, in a court of law.  This necessitates efficient courts, and well legislated and coherent court procedures.  A good contract law may supply a cogent set of rules defining the rights and obligations pertaining to any given situation, but in practice it will be of no use of the courts fail to deliver sufficient remedies.

 

A third institution necessary to a useful and efficient law of contracts, aside from the substantive law and suitable court procedures, is an efficient execution authority to execute court decisions.  In some cases, the execution authority may be empowered to execute certain kinds of contracts (such as cheques or other bills) even without a court decision.  The laws governing the powers and procedures of the execution office are also an indispensable part of a legal system that provides for enforceable contracts. 

 

More evaluation on the subject matter, such as: Commercial Contract Enforcement in the Palestinian Territories; Contracts in Palestine; Contract Enforcement Mechanisms in the West Bank and Gaza Strip; Contract Formation; Enforcement and Dispute Resolution Mechanisms; Courts; Arbitration and Mediation; Recommendations for Improvement of Contract Enforcement Procedures in the Palestinian Territories; Facilitation of an Actionable Breach of Contract; Improvement of Magistrates’ Courts Jurisdiction; Establishment of a Small Claims Court; Improvements to the Arbitration Law; and Recourse to Israeli Courts.


 

Chapter 4

Trade and Investment Flows Between Israel, Jordan & the Palestinian Territories

 

Standards as a Barrier to Trade

Issue:  Standards can constitute a non-tariff barrier to the free movement of goods within the region.  What can be done to Reduce Undesirable Hampering Effects of standards on regional trade?

 

Recommendations: Establish a Tripartite Israeli-Jordanian-Palestinian Standards Institute (or a coordinating commission drawing from the resources of the respective national standards institutes) to promulgate uniform standards and certify products in intra-regional trade.  This institute or commission will insure that the entry of goods is subject to automatic and uniform procedures regarding standards.

 

Issue: The Peace Process has not yet produced the anticipated economic improvements in Gaza and the West Bank, but instead there is now a Substantial Deterioration of the Palestinian Economy, which is causing a social crisis among the Palestinians and is harming the Middle East Peace Process.  Among the reasons for this economic deterioration is the fact that trade has not substituted for labor in Israel in providing income to the Palestinian economy.  This is partially due to the effect of the closures in preventing Palestinian goods from entering Israel, either as a final market or for transshipment to other markets.  Additional problems exist in exporting Palestinian goods to Jordan or through Jordan to other markets, including security checks at the border and the limited fleet of trucks allowed to cross the bridges, creating high transportation costs. 

Recommendations: The needs of Palestinian economic development require Direct International Movement of goods.  Free movement through Israel, Jordan, or Egypt cannot be completely guaranteed.  Policy-makers should find mechanisms for creating direct Palestinian access to international waters.  A port in Gaza can guarantee this. 

 

More to be evaluated on the subject matter such as: Standards as a Barrier to trade; Agricultural Trade; Protecting Vulnerable Industries; Banking and Monetary Policies; Legal Aspects of Facilitating Trade and Investment; and Strategic Cooperation to Facilitate Trade and Investment.

 


 

Chapter 5

Water: Conflict or Cooperation

 

The West Bank and Israel’s Water Crisis

Water is one of the important natural resources for most countries.  This is especially true for developing countries where land and water resources are limiting factors.  In the Middle East, water is considered a strategic resource, probably in the same standing as oil.  Thus, control over the water resources in this region can determine to what extent prosperity and development are possible.  

 

Many Israelis claim that Israeli withdrawal from the West Bank would lead to Palestinian control over a primary water source and could strangle the entire Jewish population within the Green Line.  Many Palestinians claim that failure to retain control of the underground water sources in the West Bank would lead to the strangulation of the Palestinians and to economic bankruptcy.  

 

Clearly, this presentation of the problem as Israelis and Palestinians see it today alike, as an acute issue in dispute.

 

Looking towards the not so distant future we can easily see a doubling of the population within the next generation.  There will be fourteen million people between the sea and the Jordan River using the limited resources of the Jordan River Basin.  All efforts should be made to face that challenge head on.  

 

To resolve the situation we must accept that all the parties involved are entitled to equal allocation of water per person for domestic, urban, industrial use as well as essential fresh crops and animal husbandry.  There is not enough available fresh water to provide for all of the needs of all of the people if there are no controls on usage.  The use of available water resources must be allocated by economic and water quality concerns.  The high grades of fresh water must be used only for domestic use.  Importation of water on a commercial basis from neighboring countries may provide some immediate relief, however, it is not a realistic long-term option.  No people, the Israelis nor the Palestinians, should become dependent on outside sources for their domestic water needs.  In order to protect the existing limited reserves, a joint commission of Israelis and Palestinians must be created to monitor use and to direct water policy.  Wider regional efforts should be aimed at high tech, high capital investment desalination plants, including the use of hydrostatic gravity pressure and hydroelectric power for reverse osmosis desalination or by the multistage distillation process (MED) or by a system combining both methods.  These high capital investment projects will become possible when the atmosphere of peace and cooperation reign rather than competition, unfair allocation and overuse.  Today it is possible to demonstrate that there are potential solutions.  Continued discussions between Israeli and Palestinian water experts can help prepare the ground for future cooperative realities.  Only through cooperation will Israel and Palestine be guaranteed a future with enough water resources to facilitate growth, prosperity and peace.

 

A bold and generous Water-For-Peace Plan can not only remove an important obstacle on the path to peace but can provide a real motivation for peace which will enable the partners to the dispute to solve urgent problems for the social welfare and economic benefit of all.  

 

More evaluation of the subject matter recommended: The West Bank and Israel’s Water Crisis; Palestinian Water Rights; The Water Situation in the Gaza Strip; Approaches to Finding an Equitable Solution to the Water Resources Problems Shared by Israelis and the Palestinians in the Use of the Mountain Aquifer; and Culture, Conflict and Cooperation: The Jordan River Basin.


Chapter 6

The Impact of the DOP on the West Bank and Gaza

Agriculture

The agriculture sector in WBG has been suffering from the lack of coordination among farmers regarding the type of farm or livestock products that should be produced. 

 

Israeli based trade movement of agricultural products (heavy restrictions on exporting Palestinian agricultural products to Israel, but ease of exporting Israeli products to WBG) has for long affected the sector negatively.  Such waste of resources and biased trade movement are expected to diminish after the establishment of a Palestinian Agriculture Authority (PAA), which will organize, oversee, and protect the agricultural sector.

 

Trade

The bulk of Palestinian goods for the last 26 years have been traded mainly with neighboring Israel and to a lesser extent Jordan.  It has not been for reasons of comparative advantage that Palestinians choose to trade with Israel and Jordan.

 

The establishment of Palestinian Chamber of Commerce to issue certificates of origin, regulate quality control, and publish a Palestinian investment guide for the various economic sectors will definitely improve trade.  As Palestinian exports increase during the transitional period so will its imports.  Rebuilding the infrastructure will require large sums of raw and manufactured materials to be imported.  Being funded by international aid and grants, provided by donor countries, the increase in imports will not cause the current trade deficit to widen in the future.  Annex III states that “cooperation in the field of trade, including studies, and trade promotion programs, which will encourage domestic, regional and inter-regional trade, as well as feasibility study of creating free trade zones in the Gaza Strip and in Israel, mutual access to these zones, and cooperation in other areas related to trade and commerce” will be encouraged.

Industry

The industrial sector, like other sectors of the WBG, has not yet been given the opportunity to grow to the size it would have (or should have) under a sovereign state.

 

Koor Industries has launched a two-track peace project called Salam-2000.  The first track involves joint ventures with Arab firms in trade and industrial projects.  The second track involves the establishment of an investment company with Palestinian businessmen and other international entrepreneurs to invest in the WBG.  Some of the initial projects to be implemented by the new company are:

1.                  A cement plant in the West Bank.

2.                  Telecommunications infrastructure.

3.                  An agro-chemical formulating plant.

4.                  Industrial parks in the West Bank and the Gaza Strip.

5.                  Factories in the autonomous regions, as Palestinians become less dependent on food from Israel.

6.                  A trading company to export Palestinian goods to existing and new markets, primarily in Europe.

 

Tourism

Tourism, as a service sector, has proven very valuable in generating income, especially with the advancement of communication and transportation. 

 

Domestic, regional and inter-regional tourism is expected to compete vigorously with international tourism in the WBG, especially cities like Jerusalem, Bethlehem, Jericho and Hebron that have holy shrines.  The reluctance Arab and other countries have been demonstrating towards establishing relations with Israel on the grounds that no real peace has been achieved, has undoubtedly affected negatively the speed with which tourism is developing in the WBG.

 

Finance

Finance dates back to the time when men abandoned the barter system and began using coins in their commercial transactions.  Since that time finance has developed to a very sophisticated system that entails banks, credit unions, depositing and borrowing.

 

Whether free or limited labor movement will be agreed upon between Israel and the Palestinian entity.  It is estimated that around 150,000 Palestinian laborers need to be working in Israel in 2004 to bring unemployment down to its normal rate of 8-10% unemployed.  If free movement of labor is adopted no serious problems will face the labor force in the short run.

 

Infrastructure

Water supply and sanitation, electric power, transportation and communication, solid waste disposal, public utilities, and housing are all under-developed.  A major restructuring of all the sub-sectors of infrastructure must be immediately initiated.  Because they are viewed as a responsibility of the public sector, infrastructural projects, except for residential and to a lesser extent commercial housing, have been ignored by the private sector.  Estimates of the costs of rebuilding the infrastructure have raised hopes of economic prosperity but at the same time spread fears of its not being rebuilt.  Although many Palestinians have taken upon themselves the responsibility of estimating the cost of rebuilding the infrastructure (estimated at around eleven billion dollars), none has attempted to determine how it will be financed.  Predictions on who will finance the rebuilding of infrastructure have centered on the World Bank, United Nations, Gulf countries, etc.  Unfortunately, of the anticipated donors, only a few have promised limited funds and those for limited periods of time.

 

It must be made clear that the future of the Palestinian economy depends greatly on the quick provision of an adequate

 

the Palestinians.  While the spheres in which regional cooperation can be inaugurated are numerous, it is most evident that water, electricity, tourism, and transportation will occupy first place of importance. 

Each paragraph mentioned above needs more evaluation.

Chapter 7

Law Reform in The Palestinian Territories

 

The Case for Reform[1]

The Palestinian Council now has the power to legislate the creation of an efficient taxation system for the territories under jurisdiction of the Palestinian National Authority (PNA).  The establishment of such a reformed system is an essential prerequisite for the economic development of these territories.  A new income tax law will improve revenue collection, enhance general compliance with the requirements of the law, and promote private sector development in the Palestinian economy.  The preparation of a new income tax law should thus emerge as a foremost priority of the PNA.

 

The Framework Provided by the Agreements

Reform of the Palestinian income tax laws should be undertaken with awareness of the tax framework provided by the Palestinian-Israeli agreements.  Under the Interim Agreement, the tax powers exercised by the Palestinian Council are divided into two classes of taxes: indirect and direct taxes.2 

 

At present, the areas under the responsibility of the Palestinian Council for tax purposes include Gaza (excluding Israeli settlements and the IDF base) and Areas “A” and “B” of the West Bank.  Concurrently, Area “C” will continue to fall under the responsibility of the tax departments of the Israeli Civil Administration until these areas are transferred to the Palestinian Council in accord with the Interim Agreement.

More evaluation and updating is needed.

------

2 Israeli-Palestinian Interim Agreement on the West Bank and the Gaza Strip, Protocol on Economic Relations: done in Washington, 1995, Arts, 5-6.


Chapter 8

The Legal Structure for Foreign Investment in the West Bank and the Gaza Strip[2]

 

This first Commercial Law Report focuses specifically on the legal structure for foreign investment in the West Bank and the Gaza Strip.  It will shortly be followed by a second Commercial Law Report, which will deal comprehensively with the legal structure for investment (both foreign and domestic) in these same territories. 

 

The current legal infrastructure for foreign investment includes:

I.                    Foreign Investment Legislation and Military Orders

II.                 Definitions of Foreign Investment and Related Terms

III.               Approval of Investment Applications

IV.              Guarantees of Nondiscriminatory Treatment

V.                 Right to Repatriate Earnings and Capital

VI.              Incentives for Foreign Investment

VII.            General Critique of Current Legal Structure

 

It is widely understood that the current commercial law infrastructure, based on pre-1948 British Mandate law (in the Gaza Strip) and pre-1967 Jordanian law (in the West Bank), substantially modified by numerous Israeli military orders, is in dire need of modernization and harmonization.  The legal climate for business is far from ideal, characterized by numerous regulatory hurdles and a lack of legal transparency, which increase the burden, risk and confusion involved in doing business.  Priority must therefore be assigned to early progress in establishing a more modern legal framework that will give business and investors the confidence to move forward. Updating needed

Chapter 9

Economy

The Economic Impact of the Israeli-PLO Declaration of Principles on the West Bank, Gaza Strip and the

Middle East Region[3]

 

The Declaration of Principles (DOP) calls on the Palestinians and the Israelis to “cooperate in the context of the multilateral peace efforts in promoting a development program for the region, as initiated by the G-7.  The parties will request the G-7 to seek the participation in this program of the other interested states, such as members of the Organization for Economic Cooperation and Development, regional Arab states and institutions, as well as members of the private sector.”  The calling on the G-7 to initiate economic development programs in the region will certainly encourage other states and entrepreneurs to join in.  Clear-cut cooperation between Israel and Egypt has already been established in the signing of an agreement to interconnect their electricity grids through Sinai.

 

The Palestinian National Authority (PNA) will act as a chaperon, overlooking Palestinian interest, and directing and advising the private sector, which is expected to launch most investments leading to economic development. 


Bibliography

1.                  Working to Expand Democracy

NDI, National Democratic Institute

Washington DC  20036

 

2.                  Regional Trade Papers

Keith Molkner J.D.

IPCRI

 

3.                  The Lexus and the Olive Tree

Thomas L. Friedman

Duchot Books, Random House, NY

 

4.                  Water: Conflict or Cooperation

Our Shared Environment

Vision and RealPolitics in the Quest for Peace

Chaia Beckerman, Gershon Baskin

 

5.                  Israel/Palestine Center IPCRI for Research and Information

 

6.                  The Balance of Security

Strategic Challenges

Herzliya Conference

Institute of Policy & Strategy

 

7.                  Democracy in the Global Village

Jeycan Albalem

Tehelet – Jerusalem

 

            8.         Bar Yosef, R., “Melting-pot, Multiculturalism and Pluralism: The                            Israeli Case”.

 

            9.         F. Poggeler (Eds.), Meeting of Cultures and Clash of Cultures,                                 Jerusalem: Magnes Press 1997.

 

            10.       Daniel J., “My brother is my Enemy: Can the Temporal be Separated                         from the Spiritual?”  Palestinian-Israel Journal of Economics and                            Culture No. 5, 1995.

 

            11.       Israeli-Palestinian Peace Documentation Series.  Letter of invitation to        

                        the Madrid Peace Conference; The Declaration of Principles on      

                        Interim Self-Government Arrangements; The Cairo Agreement;      

                        Agreement on the Gaza Strip and the Jericho Area; The Paris     

                        Economic Agreement.  Volume I, Number 1.  June 1994.

 

 


 

The Road Map

The Israelis and Palestinians were presented yesterday with the following vision

 for a permanent two-state solution to the current conflict.  The document remains

unchanged from the draft drawn up in December 2002.

 

The following is a performance-based and goal-driven road map, with clear phases, timeliness, target dates, and benchmarks aiming at progress through reciprocal steps by the two parties in the political, security, economic, humanitarian and institution-building fields, under the auspices of the Quartet (The U.S., UN, EU and Russia).  The destination is a final and comprehensive settlement of the Israel-Palestinian conflict by 2005, as presented in President Bush’s speech of June 24, 2002, and welcomed by the EU, Russia and the UN in the 15 July and 17 September, 2002 Quartet Ministerial statements.

 

A two-state solution to the Israeli-Palestinian conflict will only be achieved through an end to violence and terrorism (when the Palestinian people have a leadership acting decisively against terror and willing and able to build a practicing democracy based on tolerance and liberty and through Israel’s readiness to do what is necessary for a democratic Palestinian state to be established, and a clear, unambiguous acceptance by both parties of the goal of a negotiated settlement as described below.

 

The Quartet will assist in facilitating implementation of the plan, starting in Phase I, including direct discussions between the parties as required.  The plan establishes a realistic timeline for implementation.  However, as a performance-based plan, progress will require and depend upon the good faith efforts of the parties, and their compliance with each of the obligations outlined below.  Should the parties perform their obligations rapidly, progress within and through the phases may come sooner than indicated in the plan.  Non-compliance with obligations will impede progress.

 

A settlement, negotiated between the parties, will result in the emergence of an independent, democratic, and viable Palestinian state living side by side in peace and security with Israel and its other neighbors.  The settlement will resolve the Israeli-Palestinian conflict, and end the occupation that began in 1967, based on the foundations of the Madrid Conference, the principle of land for peace, United Nations Security Council resolutions 242, 338 and 1397, agreements previously reached by the parties, and the initiative of Saudi Crown Prince Abdullah – endorsed by the Beirut Arab League Summit – calling for acceptance of Israel as a neighbor living in peace and security in the context of a comprehensive settlement.  This initiative is a vital element of international efforts to promote a comprehensive peace on all tracks, including the Syrian-Israeli and Lebanese-Israeli tracks. 

 

The Quartet will meet regularly at senior levels to evaluate the parties’ performance on implementation of the plan.  In each phase, the parties are expected to perform their obligations in parallel, unless otherwise indicated.

 

Phase I

Ending terror and violence, normalizing Palestinian life, and building Palestinian institutions present to May 2003.

 

In Phase I, the Palestinians immediately undertake an unconditional cessation of violence according to the steps outlined below.  Such action should be accomplished by supportive measures undertaken by Israel. 

 

Palestinians and Israelis resume security cooperation based on the Tenet work plan to end violence, terrorism, and incitement through restructured and effective Palestinian security services.

 

Palestinians undertake comprehensive political reform in preparation for statehood, including drafting a Palestinian constitution, and free, fair and open elections upon the basis of those measures.

 

Israel takes all necessary steps to help normalize Palestinian life.

 

Israel withdraws from Palestinian areas occupied from September 28, 2000 and the two sides restore the status quo that existed at that time, as security performance and cooperation progress.

 

Israel also freezes all settlement activity, consistent with the Mitchell report.

 

At the outset of Phase I:

·                Palestinian leadership issues unequivocal statement reiterating Israel’s right to exist in peace and security and calling for an immediate and unconditional cease-fire to end armed activity and all acts of violence against Israelis everywhere.  All official Palestinian institutions end incitement against Israel.

·                Israeli leadership issues unequivocal statement affirming its commitment to the two-state vision of an independent, viable, sovereign Palestinian state living in peace and security alongside Israel, as expressed by President Bush, and calling for an immediate end to violence against Palestinians everywhere.  All official Israeli institutions end incitement against Palestinians.

Security

·                Palestinians declare an unequivocal end to violence and terrorism and undertake visible efforts on the ground to arrest, disrupt, and restrain individuals and groups conducting and planning viol