PhD defence L. (Libby) Leher

Brief summary of the doctoral thesis:

This thesis investigates if liberal theory of economic interdependence of international trade and capital flows can help to support sustainable peace in the Middle East. To be more precise, the overarching question is — Under what conditions could the benefits of economic interdependency help overcome the asymmetricity of the Israeli-Palestinian conflict, and support a sustainable peace in the Middle East?

The Liberal Peace paradigm has shaped perceptions regarding conflict resolution. Peace, according to this paradigm, is not to be imposed, only naturally achieved between countries, with international trade and democracy serving as its basis. This concept was a theoretical and policy relevant building block of the twentieth century global world order. However, conflicts are now on the rise and more protracted, violent, intractable, fragmented, and asymmetric in nature.

Economic incentives have always been used to achieve ‘non-economic’ targets; they form an integral part of foreign relations. Indeed, whether imposed or used for encouragement, punishment/threat or reward/promise, economic incentives have a long history of application in pursuit of political, military, and social goals. The Middle East conflict is no exception. The subject of this thesis is a clear example: negative and positive incentives have been used in the Israeli-Palestinian conflict in order to promote a resolution. With the emergence of the Middle East Peace Process at the beginning of the 1990s the economic (dis)incentives became the way to pursue progress in the peace process.

The economic considerations also played a central role in both Israel and Palestine’s pursuit of the peace agreement. Moreover, beyond the economic potential, the decision was also motivated by an aspiration for a wider change in the region that would lead to a new Middle East. The establishment of official economic, and, especially, trade relations, originally were perceived not only to enhance economic relations but also as a catalyst for achieving sustainable peace in the whole region.

This thesis focuses on the 1993 Oslo I Peace Accord aimed to promote economic development in the Palestinian Occupied Territories by enhancing economic interdependence, as the way forward to overcome the Israeli-Palestinian conflict and achieve a lasting peace. As part of the Oslo I Accord, the agreement regulating the interim economic arrangement between Israel and Palestine was signed on 29 April 1994. This agreement, The Protocol on Economic Relations to the Oslo Accords (commonly known as Paris Protocol) established the legal framework of the bilateral economic relations between the conflicting sides, and in many ways regulated the de facto economic regime already in place since the 1967 Occupation into a de jure one. The stagnation in the peace process led to the Oslo peace process, originally designed as a five-year interim agreement to become a building block of the permanent external framework shaping the economic development in Palestine, with the Protocol at its centre.

This project covers more than 30 years of economic development and cooperation in the framework of the Israeli-Palestinian conflict. It begins with the United Nations Conference on Trade and Development’s (UNCTAD) adoption of the unprecedented Resolution 109 (Ⅴ) in 1979 that focuses solely on the economic development of Palestinian Territory, making UNCTAD the first international organization to systematically examine the multifaceted development predicament of the Palestinian economy. The research extends until the times in which economic deprivation and an ongoing de-development process supported Hamas’ rise to power in the Gaza Strip, bringing about the official split in Palestinian leadership by the end of 2008. The economic model predictions, however, extends until 2019 taking into consideration more recent developments in the region. The research completed and closed per 30 September 2023.