Harvard Business Review

Bring the Olympics to Israel?


Posted on Harvard Business Review: July 7, 2011 11:30 AM

The nearly complete destruction of the continental European economies by World War II seriously endangered the stability of Europe’s social and political institutions. Europe’s leaders knew that to rebuild from the ruins, it was essential to form new kinds of international institutions to ensure prosperity, stability, and peace in the region. The first of these institutions was the European Coal and Steel Community, established in 1952 to integrate the coal and steel industries of France, West Germany, Italy, Belgium, the Netherlands, and Luxembourg. Fifty years later, based on the success of this first small experiment in economic interdependence, we now see the European Union with 27 member nations and 3 candidate countries set to join during the next few years. The economies have burgeoned, but more important, peace has persisted.

Might such an approach work in the war-torn Middle East?

A new focus on prosperity as the ultimate goal will yield peace along the way. The key will be inventing a path for mutual benefit.

The crux of the problem has been Jerusalem. The holy Old City is a matter of faith to so many. It is sacred to both Christians and Jews. For Muslims, only Mecca and Medina are more important spiritual places. While the fighting over this religious real estate appears perpetual, Jerusalem can also be a solution.

Religious tourism already feeds the economies in Israel and Palestine, as well as the surrounding area. In 2000, before the most recent insanity of violence, tourism brought in $3.2 billion in revenues for Israel. Compare that with Disneyland in Orange County, California, which rakes in a comparable amount thanks to 10 million yearly visitors who spend about $150 each on tickets, food, and souvenirs—and also shell out for hotels and transportation.

And Jerusalem has more to offer more people than the Magic Kingdom (no offense to Mickey). Indeed, the potential gate is the 3.5 billion Christians, Muslims, and Jews around the world. The Church of the Holy Sepulcher (built over the tomb of Jesus) would draw Christians. The Wailing Wall is the most holy place for Jews. Muslims would flock to the Dome of the Rock. Many tourists would visit all three. And outside the Old City are Bethlehem, Hebron, Nazareth, Jericho, the Sea of Galilee, the Dead Sea, and the Red Sea, to name only the more obvious attractions. Our back-of-the-envelope estimate revealed $10 billion to $20 billion in annual revenues if things are done right–that’s about 10 to 15 percent of the current GDP of Israel.

Does that sound crazy? We don’t think so. Win-win agreements aren’t good enough anymore. In the 21st century global business environment, inventive negotiations are the keys to thriving in the new volatility. The distinction is between transactions and relationships, between tradeoffs and sharing, between outside-the-box and open-systems thinking, and between acquiescence and creativity. Indeed, inventive negotiators transform bargaining into an innovation process, integrating the best practices of each.

What is needed in Israel and Palestine is a shared goal to kick off this process. How about Jerusalem as the site for the 2024 Olympic games? Here’s how we think it could work.

The principles of inventive negotiations suggest first forming a Jerusalem Olympics 2024 Committee including members from the key local constituencies—Israel and Palestine, and perhaps Jordan, Lebanon, and Syria. The Committee initially would meet informally, at a neutral and comfortable location, and with international facilitation. The process of the initial meetings would be brainstorming, but the consequences of these meetings would be new ideas and positive interpersonal relationships.

The Olympics could bring as much as $50 billion in revenues. And the spiritual symbolism of so many millions visiting the sources of their faith would be priceless.

But before the international investment dollars could flow, this little fantasy presumes a peaceful political division of Israel and Palestine along the lines reaffirmed in the Oslo Accords. It presumes a dropping of all commercial boycotts in the region. It presumes that Palestinians won’t have to risk being shot while “hopping the fence” to work in Israel. It presumes that companies will be able to integrate the operations of their complementary plants in the area. It presumes that the United States and other countries will send to the region legions of tourists rather than boatloads of weapons. It presumes an open, international, and, most important, a whole Old City of Jerusalem. And it presumes free trade and travel among all nations in the region allowing all to prosper in new ways.

One small group of inventive thinkers we talked with recently came up with a surfeit of additional ideas: Not only spread the Olympic events at venues around Israel and Palestine (such as beach volleyball at Gaza or rowing on the Sea of Galilee), but also perhaps include events in close by Jordan, Lebanon, and Syria. Or use “bricks from the security walls” around the country to build the main stadium in Jerusalem. Why stop with the Olympics? The new tourism infrastructure for the Games would also nicely support a World Cup competition, perhaps with preliminary games across the region as well.

Security is not as much of an obstacle as you might think. The death rate by violence in Israel (even during the dangerous middle of the last decade) is little different from that of the United States and one quarter of that in Brazil, where Rio de Janeiro is hosting the 2016 games. The Jerusalem Olympics would kickstart tourism to the area, get key regional players invested in working together, entice multinationals to invest in the region, and could even start the seeds of a broader Middle Eastern Commercial Union, just as the European Coal and Steel Community gave rise to the EU.

The Middle East was the cradle of Western civilization. It became so long ago because of innovation and trade in the region. One can only imagine what free trade in the area would produce now.

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