Abstract
The reconstruction of Gaza after the latest war between Israel and Hamas creates an opportunity to approach the problem from a purely economic viewpoint. The vision of CEESMENA is to treat internal MENA problems from a purely economic perspective. In that light, the solution to the Gaza problem can be found by focusing narrowly on the investment solution to a failed experiment. This is a common approach that economists address in a post-bankruptcy situation. The Hamas experiment, since Israel’s unilateral withdrawal in 2005, has proven to be a complete failure. It has left Gaza in a devastating bankruptcy. To solve this bankruptcy problem, we suggest an approach based on the classic build–operate–transfer (BOT) framework. The countries that invest in this project will become equity shareholders with a 50-year lease. The civil administrators that will be brought into Gaza will develop an economic model based on the principle of “private provision of public services”. It will also create the common law principles known as the “rule of law” as it is applied to property, contract, criminal and tort law under a market system. The sovereignty of the residents will be addressed only after the 50-year lease arrangement is complete along with the formation of a robust civil administration (e-Government) and common law paradigm referred to as “rule of law” is finalized. A revitalized education system will be instituted based on a reformed UAE, Bahrain and Saudi Arabian curriculum. A computable general equilibrium (CGE) model presented in the paper will be used to track a three-sector Gaza economy (tourism, agriculture and high-tech) and will be implemented to address alternative pathways for the development of this sovereign non-militarized green economy. The approach presented in this paper is a continuation of innovative thinking which was manifest when former President Trump perused the groundbreaking and successful “Abraham Accords” in complete rejection of the outdated and unsuccessful “Washington Consensus”.
Paper presented at a joint meeting of the International Trade and Finance Association (ITFA) and the Center of Excellence for the Economic Study of the Middle East and North Africa (CEESMENA), Jerusalem, Israel, August 15, 2024. We thank the participants for their thoughtful comments.
