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The Ethnic Conflict Research Digest

2000, Vol. 3 No. 2 .

The New Israel: Peacemaking and Liberalization
Gershon Shafir and Yoav Peled (eds.)

Oxford: Westview Press, 2000
294pp. Index. HB; 44.95; ISBN 0-8133-3567-1

The Middle East peace process has generated a vast amount of literature since 1991. The focus, however, has been on conflict resolution, negotiations and politics. In contrast, this edited volume The New Israel: Peacemaking and Liberalization looks at Israeli history and peacemaking from the economic angle, analysing the link between the liberalisation of the Israeli economy since the mid-1980s and the effects of globalisation upon Israel's decision to "explore the option of peace." The main argument of the book, which is well supported by the individual contributions, is that the Israeli-Palestinian conflict remained at an impasse as it had been viewed solely in security terms, but became "solvable" when it was reconceptualised in economic terms. Israel could only compete in the global market if Israeli businesses were fully integrated, and Israeli businesses would only ever be fully integrated once the Arab boycott had been lifted as a result of negotiations and peace agreements.

The book is divided into three parts. The first focuses on Israel's state-centred economy, the second on liberalisation, and the third, on the peace process. The most interesting aspect of the first part, which is a historical discussion of labour relations between Arabs and Jews, is its contribution to the on-going Israeli historiographical debate. The second part of the book, while dealing predominantly with the process of Israeli economic liberalisation, picks up on the split Arab-Jewish economy theme. For instance, Michael Shalev's chapter shows that liberalisation really only meant state contraction and that the split model could be upheld through the Occupied Territories which provided more markets and cheap labour. Indeed, he maintains that a radical restructuring of the labour market only occurred in the early 1990s with globalisation, the peace process, and the introduction of foreign, non-Arab, Gastarbeiter.

The last part of the book reinforces the overall argument, looking at the emerging independent businesses which are profiting from and consequently sustaining the drive for peace. Thus, The New Israel shows that economics is capable of providing a different paradigm for Arab-Jewish relations which is worth re-examining in light of recent political difficulties.

All together, this book is recommended to anyone with an interest in the peace process, especially those looking for a different angle. It also is a treat for economic historians and political economists. As a whole, it is well written, documented and argued, which, for an edited volume, is an achievement in itself.

Dr. Kirsten E. Schulze, London School of Economics

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