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American Economists Present Ten-year Plan for Palestine Find Arab-jewish Peace Possible

March 29, 1946
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A detailed ten-year plan for the development of Palestine, covering immigration, agriculture, manufacturing, transportation, and other fields of economy was made public here today by the American Council on Public Affairs on the basis of a study conducted by several American economists headed by Robert H. Nathan, former Deputy Director of the Office of War Mobilization and Reconversion.

Entitled “Palestine; Problem and Promise,” the study, which was prepared after exhaustive research in Palestine, Europe and the United States, emphasized the strategic importance of Palestine from the point of view of the Western democracies and points out that strife between Jews and Arabs there can be minimized through intensive development of the economic potentialities of the country. The investigation was undertaken under the auspices of the American Palestine Institute, a non-partisan organization composed of persons of widely varying views on Zionism.

“From an economic point of view,” the report says, “there can be no question that the Jews have been a great progressive force in Palestine. Over time, the country can certainly afford a self-sustaining livelihood to a much larger number of them. They can serve the whole Middle East as a progressive, Westernizing influence in the development of modern industry, scientific agriculture, education, and political democracy. They can be an outpost of Western culture without being an outpost of Western imperialism.


“Collaboration of Jews and Arabs in the development of Palestine can be conceived only within the framework of a basic political progress backed by all the moral and material authority of the United Nations,” the report continues. “That basic program needs to be communicated soon and maintained firmly despite conflicting purposes and the assaults of terrorism. Prolonged open conflict, such as existed in 1936-37, would make it impossible to achieve the development goals otherwise attainable during the next decade.”

Although the study is critical of Palestinian Arabs because of their “extravagant and unreasonable political aims,” it advocates close cooperation between Arabs and Jews in the economic sphere: “Peace in Palestine cannot be foreseen realistically except in terms of greater success of Arabs and Jews in living together and working together. Under the best of circumstances, general close collaboration cannot be anticipated in the near future. For short-term purposes, it is necessary to plan in terms of two markets and two labor forces, with a certain amount of ‘international’ trade and migration. Joint projects of agricultural intensification and modernization seem to be the most promising area for immediate close cooperation.”

In criticizing the British Government of Palestine, it makes the following charges: “A conception of government which involved a positive responsibility for social and economic betterment…has not been conspicuous in the actual operation of the Government of Palestine.” It has not been imbued with more than the faintest conceptions of the large bold innovations in domestic and international policy that will be required if rapid economic growth is to be assured in the next decade.”


It is estimated by the study that between 615,000 and 1,125,000 Jewish immigrants “could be absorbed into self-sustaining economic activities during the next decade” in Palestine. In backing up these figures, it asserts that intensified economic progress in the next ten years will mean that the more Jews there are in Palestine,

Concerning financial factors, it reports that the Palestinian fiscal system was “inequitable and of a character to act as a disturbing rather than a stabilizing factor with respect to the general level of economic activity.” The country’s “repressive and economically unstabilizing” revenue system is considered in urgent need of transformation on the basis of progressive taxes or income, capital gains, and inheritance. A major price level re-adjustment is found imperative because of the resharpening of international trade. It is recommended that wholesale prices be cut more than 50 percent and that Palestine’s cost of living be reduced by more than forty percent.

Noting that there is a “firm basis” for considerable growth in the manufacturing field, the study envisages expansion of Palestine industries producing for overseas markets as well as those producing for domestic and regional markets. It predicts that, as a result of the demise of the German-controlled potash syndicate, the Mediterranean and Middle East countries will turn to Palestine for their potash supplies.

With regard to Palestine’s agricultural development, it is asserted that that country “needs a thoroughgoing land reform.” Pointing out that the present rural situation is disadvantageous to both Arabs and Jews, the study urges that steps be taken to control prices and permit the purchase of land without current difficulties.

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