Seth Freedman, 9 March 2010
In January the OECD’s incumbent secretary general implied that Israel’s admission is all but guaranteed, and there seems little objection to the decision from the organisation’s 30 member states. For Israel’s part, accession to the OECD is of great advantage, both in terms of global prestige and practical economic benefits. Israel’s credit rating will be upgraded as a result, and Israeli firms will find it much easier to raise capital on the back of the vote of confidence issued by the OECD’s leadership.
The only fly in the ointment is a dispute over information submitted by Israel to the OECD as part of its application for membership. Data provided by Israeli officials included figures related to Israel’s settler population, which contravenes OECD policy not to take account of a state’s economic activity beyond its recognised borders. A leaked report reveals discord among OECD statisticians, who maintain that the data should either include everyone residing in the West Bank – Palestinians as well as settlers – or no one at all.
The row has the potential to derail Israel’s acceptance to the OECD because revamped numbers could leave Israel short of the organisation’s stringent entry criteria. However, according to the report, the proposed solution allows Israel to first gain membership to the OECD, and then be granted a year’s extension to submit new figures – by which point Israel’s status as a fully-fledged member will grant it the power to veto demands for updated statistics.
There have been several attempts to block Israel’s membership on the basis of its alleged discrimination against its Arab minority, but so far the pleas have fallen on deaf ears. Instead, the message is being sent to Israel by the OECD that money rather than morals is the dominant factor in their decision-making process.
Such a stance flies in the face of EU intransigence over Israel’s behaviour towards those Palestinians living under occupation. The EU has indefinitely suspended plans to upgrade Israel’s association agreement with the union, pending developments in the peace process and signs that settlement expansion is coming to an end. As it stands, all Israeli exports to Europe are exempt from tariffs, with the exception of produce originating from settlements. On top of the political face lost by Israel over the issue, the financial impact of the EU’s decision is designed to increase pressure on the Israeli government and encourage it to make concessions over its settlement policy.
The approval of Israel’s membership to the OECD weakens the position of the EU over such key matters. Likewise, it encourages Israel’s leaders to believe that they can get away with continuing to flout international law with impunity, safe in the knowledge that as one door closes another is flung open for them to walk through. The carrot and stick approach to coercing Israel to comply with its ethical obligations can only work if there is a concerted, united effort from the outside world, rather than the current batch of disjointed, piecemeal attempts.
Even as Israeli leaders declare their intention to enter into serious negotiations with their Palestinian counterparts, approval continues to be granted for further settlement construction, and peace efforts are undermined before they have even begun. Maintaining the status quo of grandiose, conciliatory statements at political level and counterproductive action on the ground is made all the more easy by the likes of the OECD refusing to stand up to Israel’s tactics of deception.
Economic pressure is one of the most powerful tools in the outside world’s arsenal when it comes to the Israel-Palestine conflict. It is to Israel’s benefit to shed its status as a pariah state and to become closer to countries with whom it can trade and forge financial links. The Israeli economy is heavily reliant on exports, and anything which threatens the viability of Israeli businesses selling their products overseas will go down badly with both the public and, ultimately, the politicians for whom they vote.
Calling for an outright boycott of Israeli goods and services is an extreme way of exerting influence over government policy, and should be entertained only as a measure of last resort. In the meantime, it is incumbent on organisations such as the OECD and EU to flex their muscles in a fashion that is measured yet firm. That seems to be the approach that the EU is taking of late, but the OECD seems to be falling short of its own responsibilities. If, as expected, Israel’s membership is ratified in May, it can only be hoped that the OECD’s opposition to Israel’s misdeeds comes late rather than never.