The Economy of Israel

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What the parties will gain: the economic aspect of the agreement. The second redeployment agreement can serve as a springboard for both the Israeli and Palestinian economies, separately and together. The greater beneficiaries, politically, economically and propaganda-wise, are the Palestinians. The agreement removes restrictions and solves hardships that have prevented growth and development in the Palestinian Authority. The influence of the Israeli economy has been lessened and will be expressed mainly in the change of atmosphere. In the coming months, the three countries -- Israel, Jordan and the Palestinian Authority -- will be considered by the international business community to be more stable and less dangerous and thus more attractive for investment. If investments arrive is another matter, depending on the global economic situation. President Clinton has promised Israel "security aid," but no economic aid, to implement the agreement. The amount of the special aid will reach hundred of millions of dollars, Jerusalem believes. The expense must be approved by Congress. Will the second redeployment agreement have the power and spirit to pull the Israeli economy out of its recession and calm the foreign currency market? Doubtful. Much more is needed to do that -- an economic policy devoted to growth, a comprehensive Israeli-Palestinian-Arab peace, as well as a renewal of the concept of a "New Middle East Economy." What are the economic advantages for the Palestinians from the second redeployment agreement? In a sentence, they will be less dependent on Israel and will stand more firmly on their own feet.

* An international airport in Gaza will serve tourists, visitors and Palestinian importers and exporters, without Israeli intervention.

* Safe passage between the two parts of the PA will, over time, enable the free flow of work, capital and initiative.

* Industrial zones -- the first at the Karni crossing -- will promote Palestinian high- tech, which is just starting out. Investors may come.

* A port at Gaza, though not economically viable, will give a feeling of independence and remove the economic stranglehold that the Palestinians complain about. Construction work on the port will provide employment for many Palestinians.

* A presidential visit by Bill Clinton in Gaza will be an important signal to the American business community to invest with the Palestinians; the president usually brings plenty of businessmen to such shows of friendship.

* The United States will supply the Palestinian Authority with additional economic aid, totaling hundreds of millions of dollars.
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