Israel and occupied territories map, Source - WikipediaBy Catherine Daniell (NCPA)  

Dallas, Texas, July 27, 2016 – The growing movement to boycott Israeli products and divest from Israel could financially devastate the Palestinians it was meant to help and destabilize the Middle East, warns a new report by National Center for Policy Analysis Senior Fellow David Grantham and Research Associate Danielle Zaychik.

“The self-styled Boycott, Divestment and Sanctions (BDS) movement has been seeking to discredit and reverse Israeli policies with respect to the Palestinian Territories since 2005,” write Grantham and Zaychik.

“The political aims of BDS are contrary to nearly 40 years of U.S. policy, yet the movement has gained traction in the U.S., primarily in academic circles, and among religious and labor organizations. But divesting from Israel would have severe negative economic repercussions for Americans and Israelis – and for Palestinians as well.”

Grantham and Zaychik point out that socially responsible investing or SRI – the practice of choosing stocks, bonds or mutual funds based on political, religious or social values – can lead to loss of opportunities for big gains.

They point out for example, that in 2000, the California Public Employees Retirement System and the California State Teacher Retirement System sold all $800 million of their tobacco shares; but since then, the fund has missed out on $3 billion in investment gains and is now considering reinvesting in tobacco company stocks.

They also state that SRI funds routinely underperform traditional stocks, pointing out that from 2004 to 2009, the worst-performing regular fund tracking the S&P 500 index fund fared better than three of the four leading SRI funds.

Economic relations between the United States and Israel have benefitted the U.S. economy, the Palestinian economy, and promoted economic interdependence in the Middle East:

  • S.- Israeli collaboration has created permanent channels of shared innovation between the brightest minds in both countries. Investments by American-Israeli foundations have contributed to the creation of 18,000 to 200,000 U.S. jobs.
  • At least 32 percent of Palestinian tech firms collaborate directly with Israeli companies to take advantage of the neighboring tech industry. Over the past 15 years, American tech conglomerates have, in turn, pushed their Israeli subsidiaries to outsource and collaborate with Palestinian start-ups.
  • The prospects of regional stability that come with economic engagement extend beyond the Israel-Palestine issue. A prime example involves the Qualified Industrial Zones, which allows Jordan and Egypt to piggyback on the American-Israeli Free Trade Agreement. This agreement strengthened ties between Israel, Jordan and Egypt, bolstered national economies, created jobs, and added millions of dollars in annual economic activity.

“The divest movement against Israel has the potential to hurt those it claims to help,” says Grantham. “It is a wholly unwise and ill-conceived strategy that undermines Palestinian and American financial independence.”

Link to Why the Divest Movement Would Hurt More than Israel:

Link to new report:

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. We bring together the best and brightest minds to tackle the country’s most difficult public policy problems in health care, taxes, retirement, education, energy and the environment. 

For more information, visit: