Center for American Progress

RELEASE: CAP Report Shows How Strengthening the Palestinian Economy Can Keep a Two-State Solution Viable
Press Release

RELEASE: CAP Report Shows How Strengthening the Palestinian Economy Can Keep a Two-State Solution Viable

Washington, D.C. — In the face of stalled peace negotiations with Israel, the Palestinian economy faces real and significant economic challenges that must be tackled in order to maintain the viability of a future Palestinian state. Ongoing political disputes often hamstring any ability to maintain budgetary stability, and infrastructure and security concerns prevent sustained economic improvement.

The Center for American Progress has released a major report looking at the key economic challenges to be overcome in order to keep a two state solution alive. The report is based on first-person, on-the-ground research. A team from CAP traveled to the West Bank and interviewed dozens of Palestinian entrepreneurs, bankers, and investors. The recommendations include concrete and practical measures that—while not a replacement for the peace process—can serve to increase economic growth and create an increasingly self-reliant Palestinian state.

“The Palestinian economy faces significant but solvable barriers to growth,” said Rudy deLeon, CAP Senior Fellow and co-author of the report. “With systemic changes to tax collection and improvements to infrastructure, there could be real economic relief for Palestinians, which is a crucial part of maintaining the viability of the two-state solution. The United States and Israel have a role to play in empowering the Palestinian economy, which, in the long run, is in both of their interests.”

Chief among the recommendations is ensuring that tax revenue collected by Israel is distributed in a timely manner. Too often, these revenues are held hostage to diplomatic disputes between the two parties, leaving the Palestinians with no choice but to borrow funds at high interest rates in order to maintain their budget. Also among the recommendations are an easing of restrictions on Palestinian employment in Israel; improvements to the Allenby Bridge Border crossing, a key trade and transportation route; and reducing movement restrictions inside the West Bank.

Click here to read the paper.

For more information on this topic or to speak with an expert, contact Tom Caiazza at tcaiazza@americanprogress.org or 202.481.7141.