Four Steps to Help Israel And Palestinians Prosper

Israel's easing of its closure of the border between Palestinian Authority territory and Israel, permitted another 10,000 Palestinian workers to resume their jobs in Israel and more trucks to carry goods to and from the West Bank and Gaza. That was welcome news. But it is just the beginning.

Israel and the Palestinian Authority should act now to formalize the trade-off of aid for security before terrorists are allowed to undermine it. Most important, trade itself needs to be encouraged by a series of steps that can be taken immediately.

To give this the high-level attention it deserves, both governments should begin by creating new cabinet-level posts: Israel should appoint an official who will be responsible for Palestinian economic development, and the Palestinian Authority should appoint someone to work with the appropriate Israeli officials to help bolster Israel's security.

In return for action to meet Israel's legitimate concerns, there are four steps Israel should take to help reduce the sense of isolation felt by Palestinians in the wake of the closures imposed on them after the suicide bombings in February and March. The closures have dramatically reduced Palestinian exports and deprived Palestinian workers of their livelihood in Israel by restricting them to their homes, causing rampant unemployment.

Trade

Israel should institute measures for the secure transportation of Palestinian goods. Specific harbor facilities at Israeli seaports can be dedicated solely to the shipment of goods to and from the Palestinian Authority. In this way, containers destined for the West Bank and Gaza Strip can be inspected expeditiously and sped on their way.

Israel should take a more benign attitude toward the desire to establish small airports in the Palestinian territories so businessmen and women can travel more freely.

Finally, procedures should be created for Palestinian exports destined for Egypt and Jordan to be shipped directly to both nations - without the embarrassing delays created by Israeli bureaucracy. Even something as fragile as Palestinian flowers today undergo damaging inspections on their way from Gaza to Egypt. Are such inspections truly required for Israeli security? Why not empower Egyptian and Jordanian officials to help inspect these shipments?

Investment

Only with new foreign investment can there be a sufficient number of new Palestinian jobs. Israel needs to help create the opportunities for this infrastructure. But the Palestinians must first put their own house in order. In its brief existence, the Palestinian Authority has become overly involved in the minutiae of investment, demanding control over such things as plant locations, resulting in frequent charges of corruption. Plans have been drawn up for badly needed industrial parks with international donors prepared to foot the bill. But bureaucratic delays have increasingly frustrated both Palestinian and foreign investors. A new attitude is needed.

Palestinian-Israeli joint ventures should be welcomed by Palestinian society. It is time the Palestinian Authority confront militant elements that have campaigned against such ventures. Joint ventures could easily be created today in apparel, footwear, and diamonds.

But Israeli apparel firms are migrating to Turkey. Israeli diamond companies are migrating to India and Thailand. Before long, Jordan will become an attractive site for Israeli companies that could be locating in Palestinian sites.

Borders

Crucial to increased trade and aid is the movement of goods across borders. They can no longer be managed in a lackadaisical and inefficient manner if both sides are serious about removing obstacles.

The number of Israeli-Palestinian border-crossings should be increased. Those currently in operation should be modernized, open 24 hours a day, and adequately staffed. Transportation companies should be vetted in advance to satisfy Israel's security concerns, so goods moving in trucks of specially designated companies can be afforded speedy passage.

Employment

Israel should permit a dramatic increase in the number of Palestinian workers allowed to hold jobs in Israel. Beyond the economic benefits for Palestinians, such a move would be important as a sign of good faith. Israel's farming out to other nationalities of the jobs traditionally held by Palestinians has created a sense of malaise and distrust among the Palestinians.

Israel's security concerns can be met by improving screening and licensing techniques and by welcoming back older workers who pose fewer risks than younger ones. Above all, a new political commitment is needed to make this trade-off work. We are confident it can, but only if officials on both sides give it the attention it deserves - before it is too late.

Leonard Hausman is director of the Institute for Social and Economic Policy in the Middle East, and Robert Lawrence is the Albert L. Williams Professor of International Trade at the Center for Business and Government at Harvard University's Kennedy School of Government in Cambridge, Mass.