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Israel Joins The OECD

In the interminable struggle between Israelis and Palestinians, any step forward by one side is automatically seen as a step backward for the other. Palestinians were, therefore, outraged this week when the Organisation for Economic Co-operation and Development invited Israel to join.

But Israel belongs in the OECD, and allowing it to take its rightful place there does not set back the Palestinian cause.

The OECD, whose membership comprises an elite group of 31 economically advanced nations, offered membership to Israel, Estonia and Slovenia, all of which began membership discussions in May 2007. Israel would join Turkey as the only Middle Eastern member nations.

Palestinians maintain that by admitting Israel, the OECD sent a message that Israel does not need to change or compromise in order to gain acceptance from the international community. Indirect talks between Israel and the Palestinian Authority led by Mahmoud Abbas resumed, under U.S. auspices, this month. Don’t hold your breath while you wait for any breakthroughs, though.

National Public Radio reported this week that a recent policy pronouncement from the Israeli military has, according to human rights groups, left thousands of Palestinians cowering in West Bank homes, afraid of being jailed or deported as “infiltrators” because they lack residence permits that the Israelis make it difficult or impossible for them to get.

Extremism on both sides has made peace elusive despite decades of efforts. Israel’s system of proportional representation hands the balance of power to parties outside the political mainstream, especially religious and nationalist parties that have little interest in compromise. Palestinians are prone to favor their own more extreme and violent factions, most recently Hamas, which also draws support from Iran and Syria — neither of which is interested in seeing Israel reach an early peace settlement.

The OECD, on the other hand, is what you might call a hotbed of moderation. It works to improve economic conditions in member countries, helping them to raise standards of living and maintain financial stability. The organization operates by conducting research and statistical analysis and by holding members to standards of commercial fair dealing and transparency in government.

We will know peace is getting closer in the Middle East when Israel starts quarreling with its neighbors about mundane topics like trade, water rights and air pollution. This is OECD territory. We might as well start drawing the various parties into that structure as soon as they qualify for it. Making Israel part of the OECD is a good step toward encouraging that country to live up to first-world standards in the way it deals with everyone else, including the Palestinians.

The OECD’s mission statement says it seeks to bring together “the governments of countries committed to democracy and the market economy from around the world.” That is a benchmark for which some important countries, notably China and Russia, currently fall short. Both are interested in joining the OECD.

Russia began membership discussions at the same time as Chile (which was admitted earlier this year), Estonia, Israel and Slovenia, but is the only one of those countries that has not yet been offered admission. Russia has some work to do. Its courts and tax system are notably politicized, for one thing, but a good first step might be to stop bullying its neighbors, particularly Georgia.

China has been granted “enhanced engagement” status by the OECD, which may eventually lead to full membership. However, before it becomes a member, China likewise will need greater openness and transparency, unless the OECD lowers its standards because of the country’s rapidly growing economic importance. That would be unfortunate. In the meantime, Taiwan, which would surely qualify for membership on its own, is left on the outside because Beijing would never tolerate such status being accorded to its renegade and self-governing province.

I have a fantasy in which I get in a car in Istanbul and drive to Cairo, passing through Damascus, Beirut and Jerusalem along the way. The Jerusalem in such a visit would be the jointly administered capital of Israel and of a Palestinian state, much like the internationally administered free city that the United Nations envisioned in its partition resolution back in 1947. In this pipe dream all the countries on my route are democratic, modern, safe and at peace with one another, making the trip somewhat like a drive from Paris to Budapest.

I don’t expect this to be possible in my lifetime. It just is not the world in which I live. But maybe Israel’s accession to the OECD is a tiny step toward my fantasy world of the future, a minor and early milepost on a journey that perhaps my grandchildren or great-grandchildren might take.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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