The most important step is number 2. Poverty (and its ally, political oppression) are the necessary ingredients to foment social discontent. I think I heard you say more than once in China that the Chinese govt will never receive local opposition so long as peoples’ lives are becoming better and wealthier. The government itself realizes this – in the papers there last month, experts were quoted as saying if the unemployment goes over double digits, they will have social unrest.

United States is learning this in Latin America: for years we only turned our attention southwards when there are too many drugs coming across the border. But when it comes to economic development, we are much happier to get rich on the backs of the cheap labor there.

Israel’s policy of building the wall has increased personal safety, at the cost of keeping Palestine poor. I have seen this for myself personally, traveling to Palestine. I don’t think I’m crazy.

The solution is not to dump a bunch of money with the PA, you have convinced me of that. I do however applaud Intel for education investments like http://www.pcmag-mideast.com/NewsDetail.aspx?ID=1158 and hope the west does more.