Middle East peace talks this week

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This week, leaders from Israel and the Palestinian territories (West Bank, not Gaza) will meet with President Obama in Washington to begin the first round of peace talks. The hope which is far fetched to many is that the talks will eventually end with a stable and real Palestinian state, as well as, a secure and fully recognized (by not only the Palestinians but also most other Arab countries) Israel.

If something worth discussing arises from these meetings, I may write a post about it, but before the talks begin I thought I would “dream” a little about what an effective peace deal would do for everyone. Let’s start with the Palestinians. Having a real and independently functioning country will give its citizens a great deal of pride which they never had. Assuming they can actually keep their new country civil, which is a big assumption because Hamas will try to undermine it, their economy will continue to grow. The growth rate in the West Bank will spike for a while with a lot of foreign investment once companies feel comfortable that the West Bank is a stable place to live and work.

For Israel, it will mean many new markets that it can now do business with. This peace deal will include normalized relations with most Arab countries which is something Israel has never had. It will allow it to export its products and services to a key and growing Middle East market. Israel is the most advanced country in the region and its products and services are sold all over the world except much of this region which it is a part of. If this changes, the economic impact for Israel will be tremendous. We will see even more foreign investment and a lot of business between them and their Arab neighbours. This business activity can even become crucial to some of the countries due the types of offerings Israel exports and this will make future wars in the region between Israel and current foes less likely.

For the world, peace in the Middle East or at least with regards to Israel will usher in a period of much higher economic growth in that region. This will likely spur growth throughout the world as companies from around the globe will begin to invest and do more business in that region. This will have a positive impact on employment in all countries, including North America and Europe. It can also help the terrorism issues that much of the advanced world faces and this security will further strengthen the global economic prospects.

Although I painted a pretty picture once peace between Israel and the Palestinians takes place, the likelihood of that actually happening are not good. Both sides don’t think the peace is very likely and common knowledge and common sense will agree with that thinking. However, if all sides focus more on the positives such a deal would have, perhaps it will improve the chances for a real peace in the region.