Peace dividends of economic relations between Israelis and Palestinians

Vstrained business affairs between Israel and the Palestinian territories have been highlighted by boycotts of Israeli companies — like West Bank-based drinks group, SodaStream.

Yet peace negotiators still believe that closer economic ties promote the goal of a two-state solution.

The Jerusalem-based Office of the Quartet, led by former British Prime Minister Tony Blair, has prioritised the growth of the Palestinian economy.

It is also a cause adopted by US Secretary of State John Kerry, who has encouraged private investors to inject $4 billion into the West Bank. He says it will change the lives of the residents.

Kerry is not the first to nurture this ambition. Former Quartet envoy James Wolfensohn persuaded American investors to buy the greenhouses left by Israel when it withdrew from Gaza. The houses and their valuable produce were destroyed within weeks.

Egyptian-born British private equity guru Sir Ronald Cohen also backs the cause as chair of the Portland Trust, which promotes peace in the region through economic development.

The aim of Kerry’s plan, unveiled at a World Economic Forum meeting, is to boost the output of the West Bank by 50 per cent over the next three years.

US officials believe that the investment will increase the median wage level by 40 per cent and cut the estimated 24 per cent unemployment figure by eight per cent.

Efforts to harness the technical know-how of Israeli businesses and the skills of the Arab workforce are being discussed by representatives from both sides.

The non-political “Breaking the Impasse” initiative, supported by the WEF, has brought together 300 Israeli and Palestinian tycoons. Coca-Cola chief executive Muhtar Kent is among those said to be involved.

The talks, inspired by lessons from the Arab Spring, have been shrouded in secrecy after attendees were verbally abused by political activists.

The business figures are said to be focusing on “shovel-ready” projects in sectors from tourism to agriculture.

The group believes that despite the archaeological treasures in the West Bank, tourism has been neglected because of security concerns.

It is encouraging that business leaders are now working closely together, but political obstacles, not the least reported intransigence of Palestinian Authority President Mahmoud Abbas, will make progress tricky.

Alex Brummer is City Editor of the Daily Mail

Last updated: 11:02am, June 12 2013