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Policy Brief No 26-27 DRAFT 3.Indd ACADEMIC PEACE ORCHESTRA MIDDLE EAST POLICY BRIEF FOR THE MIDDLE EAST CONFERENCE ON A WMD/DVS FREE ZONE NOS . 26/27 • NOVEMBER 2013 Exploring Economic Cooperation in the Middle East A Catalyst for the Helsinki Conference? Samir Abdullah Ali, Amneh Badran, Abeer Hazboun, Sema Kalaycioglu, Majdi Haj Khalil, Bernd W. Kubbig, Sara Nanni, Mansour Abu Rashid, Paul Rivlin, Erzsébet N. Rózsa, and Baruch Spiegel Creating a positive environment will be vital opportunities exist for increasing economic Abstract in order to make the envisaged Middle East cooperation and what is the role of business Conference on a zone free of weapons of mass communities in this regard? The envisaged Helsinki Conference on the destruction (WMD) and their delivery vehi- establishment of a zone free of weapons of cles (DVs) happen, successful, and sustainable. Making the Case for Economic mass destruction and their delivery vehicles This gathering proposed by the 2010 Review Cooperation in the Middle East is supposed to be purely focused on arms. Conference of the Nuclear Non-Proliferation Nevertheless, the negotiations will not evolve Treaty is supposed to engage all states in the Certainly, the Middle East as confl ict-ridden as within a political vacuum. Expanding economic Middle East in a joint effort to disarmament. it has been would benefi t from the promotion cooperation among neighbors, therefore, In this process, it will be essential to identify of economic cooperation. As various exam- may contribute not only to a generally more supportive developments and actors in the ples in history have shown, an increase in positive atmosphere, but may also help region. While the negative – even destructive economic ties can have spill-over effects onto realizing compromise-oriented solutions to – trends and driving forces are well known the political level. Thus, cooperation through the weapons problem. We are well aware that in this confl ict-ridden area, optimistic devel- trading goods and exchanging services can the relations between Israel and Palestine, opments are often overlooked. The positive principally play a positive role with respect to Egypt, Jordan, and Turkey are dominated by impact of economic cooperation is such a stability, confl ict prevention, and, fi nally, peace. various confl icts: there is no solution to the potential that will be further explored in this Explanations of why economic integration Israeli-Palestinian confl ict on the horizon, the POLICY BRIEF , as it may provide fruitful ground fosters peace are manifold. Among them are Peace Treaties with Egypt and Jordan have to induce change on a social and eventually the following arguments: remained mostly ‘cold’, and the political ties political level. • Economic cooperation between private with Turkey face severe challenges. While actors eventually spills over onto the politics remains the single most important In order to introduce gradual improvement political domain; factor in the respective dyads, the economy of external relations between Middle Eastern • confl ict between economically inter- is not irrelevant. Despite rather asymmet- states, the spill-over of a ‘commercial mentality’ dependent states is too costly, as it rical political and economic relations, it is from economics towards the security area disrupts commerce and threatens foreign widely recognized that economic elements may prove to be helpful. Therefore, this investment; and can principally have an impact. They could POLICY BRIEF assesses the possibilities of • economic exchange involves contact and prove essential for peace building in the expanding economic cooperation between communication which promotes learning Israeli-Palestinian case as well as for peace and among neighbors that could contribute about each other and teaches that people preserving and enhancing towards Egypt, to a generally more positive atmosphere in from other states are morally equal and Jordan, and Turkey. This way, economy 1 Helsinki. This POLICY BRIEF focuses on the reasonable. contributes to intensifying dialogue, reducing economic relationships between Israel and misunderstandings, increasing confi dence, four regional counterparts: Palestine, Egypt, However, the fact that the term ‘economic and may, fi nally, facilitate chances of success Jordan, and Turkey. The case studies will cooperation’ has acquired an ambivalent for developing a sustainable security archi- refl ect on the respective (a)symmetric constel- meaning in the Middle East, is little surprising: tecture for the Middle East. n lation in both economic and political terms. its implication ranges between a promising Therefore, the following guiding questions and a precarious tool. The positive conno- This POLICY BRIEF builds on the contributions are relevant for the analysis of the conditions, tation trusts that it will help pursuing genuine of the ACADEMIC PEACE ORCHESTRA Workshop limits, and impact of economic cooperation economic interests and eventually have an held in Alghero, Italy, on May 23-25, 2012. in the individual cases: what is the current impact on the political level in supporting The CHAMBER ORCHESTRA UNIT on economic situation of economic cooperation on the state the establishment of peaceful relations. The cooperation in the Middle East has been and private-sector level and what is the role of critics hold that economic cooperation with generously funded by the Swiss Federal political and economic (a)symmetries? Which an adversary or even an enemy signals the Department of Foreign Affairs. ACADEMIC PEACE ORCHESTRA MIDDLE EAST – POLICY BRIEF NOS . 26/27 • NOVEMBER 2013 willingness to engage in collaboration and politically asymmetric, trade can be a source may undermine national interests in foreign of infl uence, which may lead to dependency, economics and other spheres of foreign exploitation, and confl ict.3 Asymmetric poli- relations. While the liberal economic peace tical relations do not entirely eliminate the theory shows that economic interdependence pacifying effect of economic relations, but is generally conducive to peace, the effects reduce such impact.4 and the potential of economic cooperation can only be understood when taking into In addition to this crucial political (a)sym- account the context, namely the occurrence metry in the selected cases, the economic and dynamics of the confl ict itself. Hence, one is a striking feature as well. In contrast if we ignored the spoilers, restrictive condi- to the political actors economic performers tions, and, most importantly, the variety of are interested in maximizing their benefi ts regional political and economic asymmetries, and thereby contribute to overall prosperity. the picture would truly be incomplete.2 Although businesses are depending on politics to allow for trade, the principle Economic and Political (A)symmetries – of comparative advantages illustrates that Obstacles or Opportunities for economic exchange is possible between Economic Cooperation? asymmetrically strong business partners if their specialization is mutually benefi cial. Among the specifi c features of the relation- Hence, asymmetric economic relations are ships between Israel and the selected not necessarily an obstacle to cooperation, neighbors in this POLICY BRIEF , political but may on the contrary lead to common and economic (a)symmetries loom large, benefi ts. displaying barriers and possibilities as well as implications for assessing economic A short overview of the economic key data cooperation. The bilateral relationships of the fi ve actors analyzed suggests various selected for this POLICY BRIEF do not only levels of economic asymmetries. Within reveal different types of political regimes, this group, Israel has the most technologi- but also – and much more relevant – two cally advanced economy, including a rapidly categories of trading partners: Israel, Egypt, developing high-tech sector. Israel’s gross Jordan, and Turkey are sovereign states while domestic product (GDP) per capita amounts Palestine has not reached statehood yet. The to $28,809 and as of 2012 Israel ranks 16th [C]ooperation through tra- West Bank is for the most part under Israeli out of 187 on the Human Development Index » occupation and Gaza is almost entirely (HDI), placing it in the category of ‘very ding goods and exchanging isolated in physical-geographical terms. The highly developed’. Turkey’s GDP per capita political asymmetry is further characterized is $18,348 and the country ranks 90th on services can principally play by the fact that the Palestinian Authority the HDI (‘high development’). The relation a positive role with respect (PA) does not control the borders of the between Israel and Turkey can be described West Bank, leaving Israel in control of all as more or less economically symmetrical. to stability, confl ict prevention, imports and exports. In addition, the relation The Israeli economic relationship with and, fi nally, peace. of Israel and the Palestinians is characterized Egypt and Jordan in contrast is rather « by a protracted and at times military confl ict asymmetrical. Egypt’s GDP per capita without near-term settlement while Israel amounts to $6,723, less than one fourth of enjoys peaceful although not entirely stable Israel’s, and the country is placed 112th on relations with Egypt, Jordan, and Turkey. the HDI (‘medium developed’). Jordan generates a GDP per capita of $6,148 and These (a)symmetries are underlined by the ranks 100th on the Development Index (also complex, mutually dependent relationship ‘medium developed’).
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