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Trump plan to prioritize ‘economic peace’ is neither new, nor likely to succeed

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Since he took office, Donald Trump has expressed interest in “unlocking the potential of the Palestinian economy.” This vision has evolved into the organization of a “Peace to Prosperity” workshop in Bahrain on 25 and 26 June. American conveners of the workshop say it offers Palestinians economic benefits and large-scale investments, and aims at initiating projects of regional economic cooperation. According to White House senior advisor, Jared Kushner, the proposed plan reveals a fresh approach to peace-making.

However, while a number of recent American maneuvers indicate the adoption of a new approach to resolve the political deadlock, the use of economic means as a way to transition to political peace is neither new nor likely to succeed.

The historical illusion of “economic peace”

Contrary to Kushner’s claim, the Bahrain workshop falls within longstanding American and Israeli claims to improve Palestinian economic conditions and increase economic cooperation to pave the way for “peace.” This economic peace approach is based on the belief that transition to political peace could be achieved by ensuring higher economic growth and interdependence among countries. The assumption is that the economic benefits that arise from economic cooperation and better living conditions would raise the cost of a political conflict, thus creating interest in peace.

This approach, which was at the heart of the peacebuilding efforts in Europe after World War II, has for long inspiredAmerican and Israeli policies in Palestine. From the “Open Bridges” policy advanced by Israel’s Defense Minister, Moshe Dayan, in the 1970s, to U.S. plans to “improve the quality of Palestinian life,” promoted by Secretary of State George Shultz in the 1980s, to Israel’s Prime Minister, Yitzhak Rabin’s plan to ease conditions on Palestinians for conducting business in 1992—all of these policies in the pre-Oslo period focused on improving economic conditions for Palestinians, based on the premise that such improvement would in turn raise the cost of a political confrontation with Israel, thus pacifying Palestinians.

These economic peace strategies were further developed as part of the Oslo “peace process,” with more emphasis on promoting economic interdependence at the regional level. Shimon Peres’s vision of “The New Middle East” and the different regional economic development working groups hosted by Arab countries (Morocco in 1994, Jordan in 1995, Egypt in 1996 and Qatar in 1997) all aimed at increasing economic ties among Israel and Arab states, as part of the multilateral peace process that was launched after the Madrid conference in the early 1990s. American administrations endorsed regional economic cooperation as a way to reduce the likelihood of conflict. Parallel to these multilateral meetings, astronomical amounts of aid, or “peace dividends,” were also distributed to Palestinians with promises to better Palestinian standards of living and economic growth, while increasing economic cooperation with Israel.

However, despite this historical record of economic peace strategies, it was not until 2008 that the concept of economic peace was popularized when Benjamin Netanyahu, then Likud chairman, strongly advocated for it. His vision that economic development “mitigates” problems was based on the nexus of security, economic development, and peace. More permits and facilitation were provided to Palestinians to increase individual wealth while joint economic projects were also advanced. A similar approach guided U.S. Secretary of State John Kerry’s plan, in 2013-2014, to boost the Palestinian economy while promising mutual economic benefits to Palestinians and Israelis.

The Bahrain workshop: a continued trend of failure

Where the goal of achieving peace is concerned, the strategies above have been nothing short of an absolute failure. The eruption of the First Intifada following Shultz’s policy, and the second Intifada during the “peace process” definitively delivered the ultimate blow to economic peace and highlighted the deficiency of putting economics over politics.

The economic workshop in Bahrain is no exception to this trend of failure. As long as economic development is seen as separate from politics, and as long as Israel’s colonial structures of power and control are not addressed, then every strategy that aims at the development of the Palestinian economy will be destined to fail, since the Palestinian economy is a political construct heavily embedded in Israel’s colonial enterprise. It is only when there is an end to this enterprise and a lifting of all measures to restrict Palestinian movements and access, that Palestinian economic development can take place.

The reality is that these strategies simply sought to manage the so-called “conflict” and the Palestinian population, under the guise of paving the road to peace, while obfuscating the structures of colonial domination. The management of the population partly happened through the disbursement of economic rents/ benefits that created vested interests in the “peace process” among a group of Palestinians.

For instance, the post-Oslo period has witnessed the growth of a political and economic elite that is materially dependent on Israel, given all the privileges it has access to such as VIP and BMC cards, import licenses, and permits, among other benefits—privileges that are conditional on acquiescence to Israeli rule. This has been exacerbated by the growing political and economic liberalization in the occupied Palestinian Territories, promoted by the Palestinian Authority (PA) and international donors, which has undermined collective political projects while creating a constituency that has material gains from the continuation of the Oslo process.

What is new about the Bahrain workshop?

The economic workshop in Bahrain is thus another U.S. attempt to manage the political situation, rather than resolve it, and pacify Palestinians by offering them economic incentives to distract them from political issues. However, what is new today is that while previous economic peace initiatives, especially in the post-Oslo period, were framed around the larger political goal of establishing a Palestinian state, the current U.S. administration seems to be leaving this goal behind. Leaks of the plan have shown that it is largely biased against the PA’s goal to build a sovereign state, let alone achieve self-determination and justice. Kushner even refuses to mention the concept of two-state solution, which has been the main slogan used by the international community thus far, while U.S. Ambassador to Israel, David Friedman, recently stated that Israel has the right to annex some part of the occupied West Bank. The deal thus appears to be solely focused on economics, while completely disregarding a just political solution.

The absence of a clear political process, accepted by the Palestinians, coupled with the lack of Palestinian trust in the Trump administration, given its pro-Israeli tilt and its disregard of international law, have led to a strong joint opposition to the workshop, by the PA, Palestinian factions and the Palestinian private sector. In contrast to Jared Kushner’s unfounded claim recently that the Palestinians mainly “want the opportunity to pay their mortgage,” Palestinians seem to have had enough with economic peace strategies, that have kept the Palestinian economy structurally subordinated to the Israeli economy, and are showing that they will not accept to be financially bought off and that an economic solution can no longer replace their political aspirations.

This article was originally published on the Institute for Palestine Studies’ blog, Palestine Square, with the headline “Bahrain Workshop: Business Over Politics,” on June 11, 2019. 

Nur Arafeh

Nur is a Rhodes Scholar, doing her PhD at the University of Oxford, and is a policy advisor with Al-Shabaka: The Palestinian Policy Network.

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20 Responses

  1. Citizen on June 12, 2019, 3:00 pm

    I agree with your analysis, Mr. Arafeh, so now what?

    • Misterioso on June 13, 2019, 8:41 am

      @Citizen, et al

      Superb article by Professor Rashid Khalidi:

      “The Neocolonial Arrogance of the Kushner Plan” by Rashid Khalidi,” New York Review of Books, June 12/19

      “”You cannot do without us,’ Lord Curzon condescendingly told the Indians over whom he ruled as British imperial viceroy more than a century ago. As the Trump family rubbed shoulders with the Windsors during their recent visit to London, there was no mistaking the difference between the real aristocracy and the trumped-up one. However, Jared Kushner, presidential son-in-law and senior adviser responsible for crafting a Middle East peace plan, does have something in common with Lord Curzon and his colonial ilk.

      “In an interview with Axios shown on HBO on June 2, shortly before he arrived in the UK, Kushner cast doubt on the feasibility of independent Palestinian self-rule, declaring, ‘we’ll have to see,’ adding, ‘the hope is that they over time can become capable of governing.’ When asked if Palestinians should ever be able to enjoy freedom from ‘Israeli government or military interference,’ he said only that this was ‘a high bar.’ After suggesting that Kushner had consulted few if any Palestinians over the two years during which his peace plan was in the works, his interviewer asked if he understood why the Palestinians did not trust him. Kushner responded curtly, ‘I’m not here to be trusted.’

      “This was not the first time the Palestinians have been told they cannot govern themselves, that they are obliged to remain under foreign tutelage, and do not warrant being consulted about their national future. In 1919, another British imperialist, Lord Balfour, wrote—in a confidential memo to Curzon himself—’in Palestine we do not propose even to go through the form of consulting the wishes of the present inhabitants of the country… Zionism, be it right or wrong, good or bad, is rooted in age-long traditions, in present needs, in future hopes, of far profounder import than the desires and prejudices of the 700,000 Arabs who now inhabit that ancient land.’

      “The 1917 declaration associated with Balfour’s name, the basis of the British Mandate that led to the establishment of Israel, excluded the Palestinians—whom Balfour never mentioned by name—from the political and national rights it accorded to Jews. In the Axios interview, Kushner echoed Balfour’s words, repeatedly excluding Palestinians from political and national rights. Kushner and his colleagues, White House adviser Jason Greenblatt, and David Friedman, the US ambassador to Israel, have consistently stressed that theirs is essentially an economic development initiative for the occupied West Bank and Gaza Strip, meant to operate under existing conditions of almost absolute Israeli control. So far, it has no disclosed political element, except the clear indication that Palestinian statehood and sovereignty are ruled out. All the Palestinians deserve, in Kushner’s view, is ‘the opportunity to live a better life… the opportunity to pay their mortgage,’ under Israel rule.

      “Understandably, almost universally, Palestinians—along with many international commentators—see such an approach as simply paving the way to a normalization of never-ending occupation and creeping annexation under conditions of extreme legal discrimination between Israeli Jews and Palestinian Arabs: a situation resembling nothing so much as apartheid South Africa.

      “Astonishingly, for someone who is supposedly a successful businessperson, Kushner is apparently ignorant of the economic consensus that describes a Palestinian economy as strangled primarily by the systematic interference of the Israeli military occupation that he advocates maintaining. The Trump administration has added to this economic stranglehold with its decisions to cut both direct US aid to the West Bank and Gaza and its support for UNRWA. Meanwhile, the US continues to support the Israeli blockade of Gaza, aided by Egypt, with disastrous effects on its 1.8 million people, including chronic power and water shortages, minimal sewage treatment, more than 50 percent unemployment, and a complete lack of freedom of movement.

      “These are only some of the ways that the administration of which Kushner is part has made its contempt for the Palestinians apparent. In recognizing Jerusalem as Israel’s capital, it has unilaterally taken an issue Israel is treaty-bound to negotiate with the Palestinians off the table, and reversed seventy-plus years of US policy, while ignoring an international consensus that the city’s final status would be subject to a mutually acceptable peace agreement. The Trump administration has also explicitly avoided endorsing a two-state solution or any form of Palestinian sovereignty, positions Kushner reiterated in his interview. It closed the Palestinian mission in Washington, D.C., and cut off US aid to the Palestinian Authority. It claimed that, contrary to the status of all other refugees since World War II, the descendants of Palestinians, declared refugees in 1948, are not themselves refugees. Finally, in endorsing Israel’s annexation of the Golan Heights, the Trump administration has cleared the way for the annexation of whatever parts of the West Bank Israel should choose to swallow up.

      “Indeed, in a recent interview with The New York Times, Ambassador Friedman, who is reportedly a ‘driving force’ in shaping the Trump Administration’s Middle East policy, stated that Israel has the ‘right’ to annex ‘some, but unlikely all, of the West Bank.’ Friedman then waxed philosophical: asked whether Kushner’s plan includes a Palestinian state, he mused, ‘What’s a state?’ He concluded by ludicrously comparing the indefinite forcible Israeli occupation of Palestinian land to the treaty-based US military presence in Germany, Japan, and Korea. These declarations are the clearest possible indicator of which way the wind is blowing in Washington.

      “In exchange for these derogations of Palestinian rights, the Palestinians are to be offered money, collected from the Gulf monarchies, an offer that is presumably to be formalized at a conference in late June in Bahrain. Kushner’s proposal to buy off Palestinian opposition to a plan that obviates a negotiated political settlement is not just arrogant and crass—which is fully in keeping with the track record of his family and his in-laws. It is also no more than a reheated version of similar plans for ‘economic peace’ in lieu of Palestinian rights peddled by Israeli leaders from Shimon Peres to Netanyahu.

      “Since the time of the Oslo Accords in the mid-1990s, Peres, who was committed to the denial of Palestinian statehood and sovereignty, floated various ideas for ‘economic peace.’ The same theme was sounded by Benjamin Netanyahu, starting with the 2009 election, and with growing emphasis ever since, as he has come out increasingly against Palestinian statehood. For Netanyahu and ultranationalist supporters of extremist settlers such as his recent cabinet colleague Naftali Bennett, an economic sweetener for the bitter pill the Palestinians are meant to swallow has become an essential plank in their explicitly annexationist approach.

      “It is no secret that the Trump administration and the Netanyahu government are marching in lockstep, both regarding Palestine and a confrontation with Iran, but what is startling is how much of the White House’s Middle East policy, including the Kushner plan itself, has effectively been outsourced to Netanyahu and his allies in Israel and the US. The Trump administration’s Middle East ‘initiatives’ so far have virtually all come pre-packaged from the Israeli extreme right’s storehouse of ideas, including moving the Jerusalem embassy, recognizing the annexation of the Golan, airily dispensing with the Palestinian refugee issue, trying to liquidate UNRWA, and withdrawing from the nuclear deal with Iran. There remain a few items on the Netanyahu wish list, including annexation of much of the West Bank, formal American rejection of Palestinian statehood, the creation of a completely tame Palestinian Quisling leadership, and other deplorable ways of coercing the Palestinians to accept that they are a defeated people.

      “What Kushner and his colleagues are saying is that the Palestinians have no justified grievances, and no legitimate rights, except the right to whatever prosperity can be achieved with Gulf money under a permanent Israeli military occupation of their land. However, the Kushner plan’s notion of throwing other people’s money at the issue will not make it go away; not when it involves the national, political, civil, and human rights of an estimated 12 million people. As should be clear from political and civil society activism like the international BDS movement, and other forms of resistance in the Gaza Strip, the West Bank, among Palestinians inside Israel, and in the Palestinian diaspora, the Palestinian people are not about to be bought off.

      “The Trump administration has made it clear that while the Israelis are to have ample input into deciding what happens in Palestine, the Palestinians themselves do not deserve to be consulted on their future: in their arrogance, Kushner, Friedman, Greenblatt, and their right-wing Israeli mentors know better. The tired routine of depriving Palestinians of agency, as Kushner’s plan does in a pointed and disrespectful way, has been tried for over a century. It did not work under the British Mandate, it did not work between 1948 and the rise of the Palestine Liberation Organization in the 1960s as the Arab regimes tried to impose their tutelage on them, and it has not worked under Israel’s military rule. All that the Palestinians have been allowed by their Israeli overlords, from Menachem Begin in 1977 until Benjamin Netanyahu today, are severely constrained and largely cosmetic degrees of “self-rule” under the Israeli thumb. This is manifestly all Kushner is willing to offer.

      “The status quo of military occupation and colonization that Kushner proposes to extend indefinitely is entirely at odds with decades of stated US policy, and with every principle of freedom, justice and equity the United States is supposed to stand for. It brings the United States into disrepute to allow its policy to be framed by such a trifling figure, acting under the influence of the retrograde ideas of the Israeli right.

      “While Jared Kushner’s hobnobbing with royalty in London may have turned his head, whether he knows it or not, the days of Lord Curzon and Lord Balfour are long gone, the colonial era is over. With the neocolonial plans they have concocted for the Palestinians, he and his Israeli allies are swimming against the tide of history.”

      • MHughes976 on June 13, 2019, 3:36 pm

        I don’t think that Balfour objected to self-determination by non-Jewish people outside Palestine, just that the Bible-‘proved’ Jewish connection to Palestine overcame the more secular rivals. It’s all about the theology, baby.

      • RoHa on June 13, 2019, 9:51 pm

        So Balfour thought that there were 700,000 Arabs in Palestine in 1919. Since Arabs only came to Palestine when they saw Jews making the desert bloom (or so we are told) they must have moved in very quickly to attain such numbers.

      • RoHa on June 13, 2019, 9:52 pm

        Unless they were already there, and didn’t move in after all.

      • LiberatePalestine on June 14, 2019, 4:48 am

        → This is manifestly all Kushner is willing to offer.

        That sort of language annoys me. Kushner isn’t in a position to «offer» anything. Quite simply, the matter is none of his business. Framing that overgrown child as a deus ex machina is ridiculous.

      • eljay on June 14, 2019, 8:41 am

        || RoHa; So Balfour thought that there were 700,000 Arabs in Palestine in 1919. Since Arabs only came to Palestine when they saw Jews making the desert bloom (or so we are told) they must have moved in very quickly to attain such numbers.

        Unless they were already there, and didn’t move in after all. ||

        Those 700,000 were just passing through. A little while later, they heard about a desert blooming, quickly scurried back and pretended they’d been there all along.

  2. bcg on June 12, 2019, 4:24 pm

    “The Israelis have managed to use technology, territory, power politics, and the success of Israel’s economy to minimize the pain to themselves of occupation. The one thing that the Palestinians can do that would make a difference is something they emphatically will not do: shut down the Palestinian Authority and make the Israelis pay an actual price for their occupation and annexation. Under these circumstances, the Israeli attitude seems to be, “Let Jared Kushner try to sell his plan—we have better things to do.” ”

    • Misterioso on June 13, 2019, 9:55 am


      For the record, the general consensus is that “Israel’s” economy is not a “success.”

      “Though this embattled country has become known as the ‘Startup Nation’ —it has more early-stage tech companies per capita than any other country—the average Israeli has little connection to that prosperous field. According to government data, 8 percent of Israelis work in high-tech, which pays up to seven times the national average salary of $2,765 a month (before taxes). Israel has one of the highest poverty rates and levels of income inequality in the Western world. Meanwhile, it also has one of the highest costs of living. Tel Aviv ranks ninth among the world’s most expensive cities, higher than New York and Los Angeles; five years ago, it ranked 34th. The situation is so dire that a 2013 survey by the financial newspaper Calcalist (the most recent Israeli study conducted on this topic) found that 87 percent of adults—many with children of their own—depend on substantial financial support from their parents.” (Newsweek, May 10/18)

      “Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. To date, the United States has provided Israel $134.7 billion (current, or non inflation-adjusted, dollars.) (“Congressional Research Service, U.S. Foreign aid to Israel, Jeremy M. Sharpe, Specialist in Middle East Affairs, April 10, 2018.”)

      • LiberatePalestine on June 13, 2019, 3:51 pm

        Perhaps there would be a basis for a real œconomy if the settler-colonial population were not so heavily concentrated in the unproductive field of “security”.

      • RoHa on June 14, 2019, 2:06 am

        Can I just say that I really appreciate “œconomy” and “Æthiopia”?

        We get far too little of that these days.

      • LiberatePalestine on June 14, 2019, 8:43 am

        Thanks. I can barely resist the temptation to write Palæstine.

      • RoHa on June 15, 2019, 12:24 am

        Give in now. Resistance is futile.

  3. Kay24 on June 12, 2019, 4:32 pm

    The US has been complicit in all of Israel’s crime against the Palestinians, added to it, and protected Israel from world condemnation. The “brilliant” dishonest broker of peace, Kushner, and his family, have even financed illegal settlements. and shown an open bias towards the occupier. This peace plan was going nowhere from the beginning. Only the naive believed that a failed businessman, who was in debt, had no experience, was going to succeed in brokering peace between an occupier and it’s victims.

    It makes me wonder why Kushner did not ask his zionist millionaire buddies for that loan, to pay off his massive debts, instead of those wealthy Arabs.

  4. vanmet on June 12, 2019, 5:34 pm

    James Zogby’s piece on the same topic (published here several weeks ago) detailed a number of specific instances from his own experience that may be emblematic of Israeli responsibility for the failure of such “economic initiatives.” Two points struck me as pertinent. When the US (and possibly also Europe) touts economic benefits for the Palestinians, they’re mainly giving themselves a feel-good message, however sincere or naive their intentions may be. Israelis typically insist on administering any said aid, and end up taking a major cut. The second point is worse and probably more decisive. Behind the scenes, real, practical aid measures are blocked at every step. Particularly striking was Zogby’s discovery that small/medium-sized Israeli businesses weren’t having any Palestinian competition. Subjugation to the point of slavery pays wells for the oppressor–that point should never be lost sight of.

    • LiberatePalestine on June 13, 2019, 2:42 am

      The US has a history of touting alleged œconomic benefits by way of whitewashing apartheid. It maintained full trade with Azania (colonially styled «South Africa») until the end of the 1980s, when the apartheid régime there was about five years from collapsing. Over and over again we were told that a boycott of Azania would harm the indigenous nations of the country. And now BDS is denounced even more vigorously, to the advantage of the Zionist entity. Boycotting apartheid was the right thing to do in occupied Azania and is right in occupied Palestine as well.

    • Abierno on June 22, 2019, 5:50 pm

      Zogby is right. Little of the 50+ billion will actually reach Palestinians since it will be, as are all monies flowing to the territory and Gaza, administered by Israel. This means that considerable funding will be appropriated for “security”, additional funds for health, education, etc. and then the remaining funds will be dispersed only under conditions that Palestinian spending aligns with Israeli political objectives. In other words, having no political freedom or independence from occupation, means that this is simply window dressing to turn heads as Israel annexes the 60% of Palestine that is area C and some of B.

      It is also a set up: Kushner and co. deem the Palestinians not ready for independent management of their own financial affairs. The same as regards their political affairs. The goal is to obfuscate the dissolution of Palestine into small, easily contained bantustans wherein the Palestinians can be “imprisoned” in the tradition of Gaza. Palestinians are right to spurn this poisoned chalice.

  5. RoHa on June 13, 2019, 3:09 am

    “such improvement would in turn raise the cost of a political confrontation with Israel, thus pacifying Palestinians.”

    But what will pacify the Israelis?

  6. bognajpierw on June 15, 2019, 11:31 am

    Back in 2012 the Presiding Bishop of the Episcopal Church in the US offered the same blind and illusory “solution” to the conflict: Dump money into a Palestinian “economy” that is crucially limited by the routine policies of an occupying foreign power:

    [The Episcopal News – Diocese of Los Angeles, 28 March 2012] Presiding Bishop Katharine Jefferts Schori urged Episcopalians to “invest in legitimate development in Palestine’s West Bank and in Gaza” rather than focusing on divestment or boycotts of Israel, during a March 25 “Middle East Peacemakers” luncheon in Los Angeles.
    “The Episcopal Church does not endorse divestment or boycott,” the presiding bishop told more than 200 people gathered at the California Club in downtown Los Angeles. “It’s not going to be helpful to endorse divestment or boycotts of Israel. It will only end in punishing Palestinians economically.” . . .

    Presiding bishop on Middle East peacemaking: Engage, don’t divest

  7. edthespark on June 16, 2019, 5:10 pm

    Nothing new about cash for peace,tried it before,did not work,back to the drawing board,kushner lost in translation.Rich folks tell the same jokes.
    Conference in bahrain never been done before,so what,as long as america comes up with new ideas there is hope says the pope.
    The big difference this time around is money.Thats right.The usa is passing the buck to the oil rich.
    Freebie is over.Cash for security.
    Thats the new equation,not cash for peace but cash for security.

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