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. 

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

“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… Read more »

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… Read more »

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… Read more »

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

But what will pacify the Israelis?