Despite the expectations of economic theory, a century of Arab-Jewish economic interaction in Palestine has not led to the convergence that is anticipated to result from exchange between a capital-rich economy and a labor-intensive one. After 60 years of failed integration, the Arab population in Israel has fallen to the bottom of the socioeconomic ladder. With the Palestinian “regional economies” in Israel and the occupied territories operating as part of the same Israeli economic regime, the challenge for Palestinian economic policy makers is to build on the new paradigm in shaping a national development strategy aimed at reconstructing Arab-Jewish economic relations on the principles of balanced cooperation embodied in the Economic Annex of the 1947 UN partition resolution.
Khalidi, Raja
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