Economic solution to the Gaza conflict?

Great Debates
1

The US currently spends about $3 billion per year in direct military aid to Israel. In addition, there’s another one billion that’s gone to special projects like Iron Dome, and an indeterminate amount of indirect aid, like loan guarantees, special pricing, and old military hardware given to Israel.

Israel, meanwhile, spends $16 or $17 billion on the IDF, plus more, I assume, on intelligence services, special operations, and jails for captured Palestinians.

Then there’s the costs associated with the conflict. The OPEC embargo, for example, dramatically increased the cost of gas in America (while enriching states like Saudi Arabia) and arguably led the stagflation of the 70’s. More recently, the attack on the WTC cost the US billions in direct damages, and led to a recession that cost billions more in unemployment, lost wages, and lost economic growth. It also led to whole new government bureaucracies, like Homeland Security, and the TSA. (I’m not counting the war in Iraq, though some people would.)

In Israel, the conflict leads to the deaths of Israelis, as well the disruption of economic life, when Israeli citizens leave their jobs for military service, for example, or when schools, markets, or factories close.

Gaza, on the other hand, is a tiny strip of land, mostly desert. (Only about 7% is arable land according to the CIA’s World Factbook.) The income per person is about $4000, and the unemployment rate is over 20%. There are about 1.5 million people who live there.

If they were paid, say, $50,000 each to leave, how many would go?

I’m far from an expert, but my impression is many would like to live somewhere else, if they could.

If they all left, that would come out to $75 billion. Which is a lot of money, but not so much in terms of US GDP, or government spending, or even just spending on the military. The US has spent that much in direct military spending on Israel alone, over the past 25 years, with no practical result at all, other than the ongoing hostility of millions of people across the globe, who watch Palestinian children killed by bombs, paid for, at least in part, with US dollars.

Is there a way to spend the dollars on something that would end the conflict, rather than keep it going?

2

Where would they go? If you gave Mexicans $50,000 to move to America, lots of them would take the money. The problem is that America won’t let them move here. What country is going to admit 2 million Gazans? Egypt? Jordan? America?

3

This.

4

Well, a family of 5 would have a quarter of a of a million dollars in spending money. Even a handful of families, arriving with that kind of money, could have a substantial impact on the local economy.

Countries often object when poor people and refugees arrive. They’re less likely to object to people with money. Even the US - I believe - has a special program for people who want to come here - if they have enough money.

Some might go to Egypt, or Jordan, or the West Bank. Others might go Germany, Australia, or even the US.

I don’t imagine they’d all go to the same place

It’d be up to families to decide where to go, and countries to decide to take them. But having a substantial amount of money would help their chances.

5

While I think it’s possible that some countries might allow them in, I don’t think even 250k is a whole lot if you have to move to a foreign country. Doubly so if have no education or independent means of supporting yourself, and if you do not speak the language.

I think the larger point is that $75 billion is a LOT of money to actually give away. A lot of that aid is just corporate welfare to US companies. Giving it to random people is a much harder sell. That said, I am a bit surprised there aren’t more market solutions on the table.

6

The US Visa available for immigrants who plan to invest in the US economy requires an investment of $1 million. FYI.

It’s also worth pointing out the obvious that many Palestinians believe they are living in their homeland, and would not be willing to relocate for a cash payment, notwithstanding how shitty it is to live in Gaza right now. They regard leaving as giving up the struggle for their rights.

7

How about this? Everyone in Israel, Gaza/Palestine and Lebanon over the age of 18 gets $2K/yr. This amount is reduced by the amount of violence, missile attacks, etc., and everyone takes the hit. So, if everyone behaves peaceful, they get the $2K, and if there’s a lot of violence, they end up getting nothing for that year. That would last for five years.

During the five-year period, all parties (and I mean everyone) to the conflict have to enter multi-party talks. At the end of five years, if there’s no treaty, the payments stop. If anybody pulls out during the negotiations before there’s a treaty, the payments stop.

If there is a treaty at the end of five years, then the payments continue for another five years.

If I’m doing my calculations right, this amounts to about $35 billion/yr. We could probably get some other countries to share part of the cost.

8

When you live in a giant internment camp like Gaza, you’re pretty much going to acquiesce to the guys with the guns whether you like them or not. I doubt that reducing a cash payment every time Hamas fires a rocket would have any effect whatsoever. Indeed, every time there is a big rocket barrage, Israel kills a bunch of Palestinians and destroys hundreds of homes. If that isn’t incentive enough to get Palestinians to shun Hamas, why would a few thousand bucks be?

9

The payments would also go to the people in Hamas (ie, the ones with the guns). Now, I’m not a fan of Econ 101 theories, but there are plenty of people who run around the US championing capitalism as the solution to all problems. So, let’s put the theory to the test. In capitalist economic theory, actors are supposed to maximize utility, and cash money certainly means more utility.

Plus, Hamas may be amenable to negotiation with a bit of a nudge. After all, they do periodically negotiate with the Israelis over things like prisoner exchanges. Maybe money pushes them to negotiate enough to get to a treaty.

I didn’t say it would work. But nothing else is working either, so what’ve we got to lose?

10

How?

It depends on why you think negotiations have failed so far, of course. But I don’t think anyone believes Hamas is insufficiently incentivized to negotiate for peace.

You mean, other than giving millions of dollars to Hamas?

11

Well, per the above plan, if they’re Gazans they get paid.

Oh, I beg to differ. I think a lot of people believe that.

12

Hamas has guns. They’ll “tax” the Gazans the day after the payments arrive.

I suppose (just for the sake of speculation) it might be interesting to suddenly give thousands of guns to ordinary Gazans with prominently posted and high-reward “Dead or Alive” posters for various Hamas leaders. There’s nothing like fostering a miniature civil war to keep things interesting.

13

How about this. Instead of the Gazans leaving, why don’t the Israelis just move to other countries and the Gazans can go back whence they came. Surely it will be easier to relocate educated rich people than poor and uneducated ones.

14

If they were sufficiently incentivized, we’d already have peace negotiations.

We give money to shady people all the time.

15

Yeah, that’s a good point. I’ll have to think about that one. You’d have to have a preliminary round of negotiations between all the parties before you could implement the payment system, and Hamas would have to agree to certain things. But, we’d need a mechanism to enforce once the payments were up and running.

16

Well, Israel could build infrastructure for the Gazans like bridges and roads and such, then say “We have these locations precisely targeted with artillery. Any attack on Israel from Gazan territory will cost you one structure.”

Of course, that’s more-or-less what they’re doing now, albeit skipping the first step.

17

It depends where you go, I guess. It’d go a long way in Costa Rica, or South Texas. Not so much in NY or San Francisco. Besides, I don’t think it’s true Palestinians have no skills. There are Palestinian doctors and engineers and teachers and home builders, for example. Lots of home builders, since their homes keep getting knocked down.

18

Awesome! You’ve now given a bunch of young guys with something to prove a brand new path to national notoriety. Giving up 2k isn’t that bad of a trade off for being able to have an impact on the entire nation just by lobbing a few grenades. Got some kind of edgey cause you want to publicize? Try to make sure your the one who gets the subsidies taken away, and you’ll have headlines for sure!

19

Oh, honestly. Read the rest of the posts in the thread before you reply to me, and read the actual plan, since lobbing a few grenades doesn’t forfeit the entire 2K.

20

I proposed something like this in one of the other Israel/Gaza threads. Basically, if there were peace, people would invest in Gaza’s economy. You’ve got a lot of workforce there, many of whom are fairly well educated. A good place to invest.

If the violence ended, people would invest in the Gazan economy, and the jobs thus created would have much the same effect as your suggestion.

At very least, if they stopped fighting, they wouldn’t have so many dead and injured among their citizenry. By rejecting the cease-fire proposal, they’re punishing themselves far more than anyone else.