Peace and political change can be fostered via economic investment
Since we cannot rely on our governments to improve the political situation, it remains in the hands of private citizens, non-government organizations and the private sector.
By GERSHON BASKINA MARKET in Ramallah. In any model for the future of relations between Israel and the Palestinians it will be essential to place a lot of energy into the development of the Palestinian economy. (photo credit: MOHAMAD TOROKMAN/REUTERS)
In the eyes of many Israelis and Palestinians, we are enemies. Many Israelis and Palestinians have not found a way to reconcile the national existence and rights of the other side with their own. We have experienced years of failed peace processes, and most Israelis and Palestinians believe that there is no resolution of the conflict possible at any time in the foreseeable future.Most Israelis and most Palestinians genuinely believe that they themselves want peace, but that the other side does not. Both sides have a lot of good reasons to believe the other side does not want peace. Both the people and leaders of each side have no concrete viable plans that are acceptable to even change the negative dynamics that exist between them.Despite all that, what is undeniable is the fact that these two people will continue to live on the land between the Jordan River and the Mediterranean Sea, and that both sides have proven their willingness to fight, die and kill to maintain their presence and their rights here.Since we cannot rely on our governments to improve the political situation between the parties, it remains in the hands of private citizens, non-government organizations and the private sector. In any model for the future of relations between Israel and the Palestinians – one state, two states, confederation, federation or a hybrid of them – it will be essential to place a lot of energy into the development of the Palestinian economy.There is an acute need to raise the standard of living in Palestine, to increase opportunities for prosperity, to create new and better jobs – especially for young people, and to see the Palestinian economy move from the mode of donor recipient to a mode of investment. The economic gaps between Israel and Palestine are unsustainable for peaceful relations to exist with a (pre-coronavirus) per capita GDP of more than $41,000 in Israel and $3000 in the Palestinian Authority. The solution is not to shrink the Israeli economy, but to enable the Palestinian economy to grow rapidly.The primary obstacles to Palestinian economic growth remain those placed by Israel’s control over land, border crossings, imports and exports and the flow of money, people and goods. The Palestinians have plenty of their own self-imposed obstacles, mainly connected to corruption – primarily nepotism, deficiency in transparency and accountability, serious lacks in contract law and contract enforcement and, of course, the political division between the West Bank and Gaza.US President Donald Trump’s peace plan, which included substantial economic incentives, is a non-starter for the Palestinians on the political level, and is no different than Prime Minister Benjamin Netanyahu’s previous plans for what he called “economic peace .” Serious peace efforts must include three pillars: political peace, security cooperation aimed at providing security for peoples and serious investment in the economy.It seems that the likelihood of a political breakthrough on the Israeli-Palestinian front is extremely low. In the meantime, the Palestinian economy shows little signs of real development. Continued Palestinian labor exports to Israel is a significant factor in the Palestinian economy, but no young Palestinian honestly dreams of spending his or her life doing manual labor in Israel. The young Palestinian generation is educated and entrepreneurial.Many young Palestinians have a dream of a much better life with a career in hi-tech or in launching a start-up business. There are hi-tech start-ups beginning to sprout. There are also programs like the Palestinian Internship Program, which places young Palestinians with Israeli hi-tech companies for a brief internship, and they are inundated with applications of very qualified young Palestinian men and women.Our Generation Speak, another innovative project, sends young Israeli and Palestinian entrepreneurs for a three-month training program to Brandeis University and provides coaching to develop their own proposals for start-ups. The Arava Institute for Environmental Studies also has seen increased numbers of young Palestinians applying to be trained in developing Palestine’s green economy.
An issue of urgency that I have found working in the development of Palestine’s economy is the need within Palestine to move from the mentality of collecting donor funds to the mentality of investment. Israel went through the same process years ago.Now it is possible to make this transition because it is easier to raise capital through the development of crowd investment platforms that did not exist in the past. This is not the same thing as crowd fundraising platforms for collecting contributions, like Headstart or Indegogo. A crowd investment platform is a mechanism for raising capital as investments, giving shares of equity in companies and projects to the investors. It works like the stock market but with the ability of new, young and small companies to raise capital from the local and international public with relatively small amounts of money.Israel is a pioneer in this field with the leading crowd investment platform OurCrowd. OurCrowd was started in 2013, driven by the idea that the business of building start-ups grows bigger and better when the global ‘crowd’ gains access to venture capital-level investment opportunities. OurCrowd has raised more than $1.4 billion in seven years and has invested in more than 200 Israeli companies. OurCrowd’s model is too big and ambitious for the current level of Palestine’s economy, but another Israeli investment platform could, perhaps serve as a better model.ExitValley is a model that is appropriate for small companies, for start-ups and projects on a much smaller scale than OurCrowd. The company raising capitals calculates the amount they need to raise, valuates the company or project and then offer shares to investors. The companies then raise money from their inner circles, friends and family, and colleagues.Each investor from the first circle also has their own circles, and then other potential investors, locally and from abroad. There is an enormous number of potential investors who want to have a stake in the future of Palestine. This seems perfect for the Palestinian economy to develop a Palestinian based model of a crowd investment platform which is made for small and medium enterprises that are often family owned.I have presented the idea to the Palestinian Capital Markets Authority, which is the governmental regulator. They will have to create the laws and regulations that will protect the investors in order to build confidence in this new concept in Palestine.I am quite sure that there are many people in Palestine and around the world, perhaps even in Israel, who would take the risks and the opportunities to invest in building a healthier and stronger Palestinian economy. Now we need to find the Palestinian investors who will take the initiative to create this crowd investment platform for Palestine. This is a profit geared initiative that will be a win-win for everyone involved.The writer is a political and social entrepreneur who has dedicated his life to the State of Israel and to peace between Israel and her neighbors. His latest book ‘In Pursuit of Peace in Israel and Palestine’ was published by Vanderbilt University Press and is now available. It will soon appear in Arabic in Amman and Beirut.
