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Palestinian leadership embraced ‘economic peace’ plans in the past, so why is it rejecting Kushner?


In Bahrain last week, Jared Kushner opened the ‘Peace to Prosperity’ conference by assuring the Palestinian people that what awaited them at the other side of this plan was a “future of dignity, prosperity, and opportunity…” He continued, that this was only possible if “…we are willing to try new things, and think outside of the traditional box.” The sheer ineptitude of the team responsible for the Trump Peace Plan is made clear by the fact that there is almost nothing new to the economic part of the plan. Rather, it represents an amalgamation of all the economic plans that have been presented from the Oslo period onwards.

The key question here is then why are the Palestinian National Authority (PNA) and the Palestinian Liberation Organisation (PLO) so resistant to, and outraged by, this particular plan as opposed to the ones that have come before it? Historically speaking, the PNA has openly embraced and pursued policies and initiatives that are almost exactly the same as the Kushner economic plan, doing so in the hope that it would in fact lead to statehood. So what is the difference? The answer is simple. One avenue claimed to lead to liberation, while lining the pockets of a PNA connected elite. The other promises perpetual occupation, with peace dividends for international investors.

Economic Peace

The principle of ‘Economic Peace’, in the context of Palestine, has been a crucial part of all negotiations from the peace treaty with Egypt onwards. The Oslo period saw the formalisation of this particular principle into a doctrine, which would direct all subsequent efforts for finding a ‘solution’ to the question of Palestine. The thinking was always that through the bringing about of economic development, and dependence, a ‘virtuous-circle’ would be created which would begin and reinforce the foundations of a peaceful region.

At the core of the ‘virtuous-circle’ is the belief that economically prosperous people are less likely to flock to the streets. It had been widely recognised that the de-development of the 20 year period from the beginning of the occupation of the West Bank and Gaza in 1967 until the outbreak of the first Intifada in 1987 was a crucial factor in fueling the uprising.

Increasingly over time, the PNA’s state building project has conformed to, and largely been dictated by, the principles of economic peace. The logic is premised on the idea that only by demonstrating their seriousness as economic managers, which is a key hallmark of the contemporary state, will the PNA show itself as ready to be endowed with the status of a state by the international community.

That its very founding, as part of the Oslo Accords, involved a separate yet connected, agreement, that being the Paris Protocol of 1994, is a clear indication of a broad acceptance of this doctrine. The Protocol brought the PNA into a customs union with the State of Israel, premised on the ‘virtuous-circle’ rationale. The pursuance of this approach was further reinforced by Article 21 of the Palestinian Basic Law of 2002, which explicitly states the ‘free market’ nature of the Palestinian economy.

In addition to its role as an economic partner with Israel, the PNA also represented something of a middle man between the World Bank and donor states and the implementation of projects on the ground. As part of the ‘Economic Peace’ rational, these development efforts were undertaken with the aim of inviting and enticing private investment and economic activity. The PNA was, in short, acting as the Palestinian face directing the OPT’s economic integration into a liberal world order.

In playing such a role, the PNA fell into something of a trap. The institution premised its legitimacy, in part, on the ability to provide the conditions for an economic peace as well as promising eventual liberation. Though, the conditions that provide safe investments, and a pacified population, in turn provide the occupation with much less work to do in order to maintain settlements and control of over 60% of the West Bank. The PNA was stuck in an existential contradiction from its inception.

Fayyadism and Kushner

By 2007, the principle of ‘Economic Peace’ had become the only liberation strategy for the PNA. The thinking was that even if negotiations didn’t progress with Israel, that international recognition would push the situation towards the actualisation of a state. The underlying logic is that to arrive at liberation, the PNA must submerse itself in the project of neoliberal state building.

The clear articulation of this strategy arrived in 2008. As part of the Thirteenth Government’s National program, entitled “Ending the Occupation, Establishing the State”, the PNA declared that a Palestinian state would be “an emblem and protector of peace, tolerance, and prosperity in a troubled region.” The core of its plan to establish a Palestinian state by the year 2011 involved four key pillars. These were improving and empowering governance institutions, promoting the development of social capital, creating an enticing investment environment and promoting the role of the private sector, and the development of infrastructure. The document was later to become known as the primary articulation of the doctrine of former PNA Prime Minister Salam Fayyad, taking on the name ‘Fayyadism’.

The flashy document entitled “Peace to Prosperity”, which was uploaded to the White House website on 22 June, rehashes these same old categories and goals. The document itself is premised on three specific target areas. The first is ‘Unleash[ing] the economic potential’, which the plan hopes to achieve through a combination of improved property rights, the creation of capital markets, and other measures to encourage private sector led growth, including the improvement of basic infrastructure.

The second is ‘Empower[ing] the Palestinian People’, which aims to boost Palestinian social capital through an expansion of training and vocational programs. The final category is ‘Enhance Palestinian Governance’. Its stated aim is to “improv[e] the public sector’s ability to serve its citizens and enable private-sector growth.”

Despite the fact that the categorisations may be slightly different, the core policy prescriptions are the same. The only real difference is that the Fayyad Plan promises liberation, while the Kushner plan utilises the empty rhetoric of ‘dignity’ and ‘opportunity’. At the core of it, these documents are both snake oil, promising an occupied people a kind of salvation through the market.

Outrage and Hypocrisy

If this new plan represents the same old policy orthodoxy, then why does the PNA so vehemently reject it? What is the crucial difference between the coercion of market forces and international expectations, underpinned by the violence of the occupation, and the coercion of the Trump approach?

Throughout the Oslo period and the state building era, an inner circle of Palestinian business people and high level officials have enriched themselves and gained considerable prestige. The inflow of around $37.2 billion dollars between 1994 and 2017 in aid to the Palestinian territories has, due to crony capitalist tendencies, helped to enrich a few and wed them to the current status quo. The crucial element of being able to maintain such a system is the promise that it will lead somewhere; that all this security cooperation, and newly made millionaires are part of the path to liberation. Kushner’s document, and Trump’s plan, show this all to be a lie. It offers up the PNA’s own policy objectives but with a much more explicit emphasis on how such policies serve the occupation, as Trump’s pro-Israel credentials are beyond question. In doing so, it lays bare the fact that the state building era was never much more than an exercise in cementing the power of the occupation, whether the PLO was aware of it or not.

If this economic plan is ever to truly materialise, $50 billion dollars of investments will flood the OPT, Israel, Lebanon, Jordan and Egypt. While it has been argued that these funds will find their way into these specific economies, the ‘peace dividends’ are more likely to flow to the contractors and international investors, who were honoured guests in Bahrain last week, rather than to local firms or providers. Much like the Iraqi reconstruction before, luring investment to such projects means promising large profits and limited oversight.

If ever there was any hope in the PLO’s current approach to liberation, the ‘Peace to Prosperity’ conference and document represents its final death rattle. The only thing is that the rattle has been going on for a decade. It is now more of a siren.

David Joseph Deutch

David Joseph Deutch is a researcher and analyst based between Ramallah and New York. He has previously worked with UNDP Palestine, as part of the Development Policy Advisory team, and with UNRWA in both Jerusalem and New York. Most recently, he was Addameer Prisoner Support and Human Rights Association’s Coordinator of Advocacy and Lobbying in Ramallah. He is currently pursuing doctoral studies in Political Science at the City University of New York.

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5 Responses

  1. 1SSChamp on July 5, 2019, 3:30 pm

    As many of us have known for a long time, the only road to true liberation for the Palestinian people is to sweep away the PNA as the thuggish, neo-liberal comprador capitalist organization it is and reinvent the PLO to make it a true instrument of popular resistance and liberation. Given the dispersal and separation of the Palestinian people, not to mention to artificial political schisms within the people, this is no easy task. However, working out the modalities to achieve these two strategic political goals is a necessary but insufficient condition to achieve said liberation.

  2. Misterioso on July 6, 2019, 8:30 am


    Trump dumps Bolton!!

    “Trump Couldn’t Ignore the Contradictions of His Foreign Policy Any Longer”

    “The president moves to straighten out his own foreign policy—and leaves his hawkish national security adviser on the sidelines.”

    The Atlantic, July 5, 2019 by Thomas Wright.

    “Thomas Wright is a senior fellow at the Brookings Institution and the author of All Measures Short of War: The Contest for the 21st Century and the Future of American Power.”

    “Vyacheslav Molotov served in senior positions in the Soviet Union for more than a quarter century, including 10 years as Stalin’s foreign minister. He was dismissed in 1949 when he fell out of favor with Stalin, but he found his way back in to the Foreign Ministry after the dictator’s death in 1953. Over the next four years, he fought with the new Soviet leader, Nikita Khrushchev. According to Molotov’s biographer, Geoffrey Roberts, Khrushchev ‘accused Molotov of being a dogmatist whose actions as foreign minister had united the USSR’s imperialist enemies.’ The Soviet plenum passed a resolution that charged Molotov with opposing measures ‘to reduce international tension and strengthen world peace.’ Molotov was dismissed from his post and named ambassador to Outer Mongolia (what is now independent Mongolia). This role wasn’t unimportant, and his fate was sweeter than those of Khrushchev’s other party rivals—Georgy Malenkov was made to manage a power station in Kazakhstan and Lazar Kaganovich a potash factory in the Urals. Even so, Molotov was far, far from the action. Banished to Outer Mongolia quickly entered the English lexicon.

    “On June 30, another mustachioed foreign-policy chief found himself in Outer Mongolia. John Bolton was sent to the capital, Ulaanbaatar, while President Donald Trump stepped into North Korea to meet Kim Jong Un. Trump was accompanied by loyalists—Mike Pompeo, Mick Mulvaney, Jared and Ivanka Trump—and a new adviser, Fox News’s Tucker Carlson, who is credited with talking the president out of striking Iran as his Cabinet had recommended. Trump invited Kim to the White House, and reports swirled that the United States would settle for a nuclear freeze by North Korea instead of denuclearization. In response, Bolton tweeted, ‘Neither the NSC staff or I have discussed or heard of any desire to ‘settle for a nuclear freeze by North Korea.’ This was a reprehensible attempt by someone to box in the President. There should be consequences.’ The words NSC staff or I were doing a lot of work, implying that others in the administration were behind the move. We now know that Stephen Biegun, the State Department’s special envoy to North Korea, briefed reporters on Pompeo’s plane back from Korea that the administration was considering a ‘complete freeze’ to unlock the talks.”

    “Who will replace Bolton is unclear. The best-case scenario would be Biegun, the North Korea envoy. He was rumored to be the runner-up to Bolton for the post in 2018. (Mattis and Kelly pushed for him, although at that point he had not spent time with Trump. Now he has.) Trump may see him as the man to oversee his various negotiations, as he has on North Korea. But will Trump go for a mainstream figure who would not be out of place in a traditional Republican presidency?”

    • Keith on July 6, 2019, 11:59 am

      MISTERIOSO- “Trump dumps Bolton!!”

      Excellent news if true. But until that despicable warmonger is out the door he isn’t out the door. These neocons are like a plague which is extremely difficult to eradicate, merely lying dormant briefly before flaring up again.

    • Tuyzentfloot on July 6, 2019, 1:10 pm

      That does not mean Bolton is out. It could be, but it can also mean he is kept at arms length for the North Korea negotiations, and who knows how much damage he can still do at arms length. Bolton was Adelson’s choice I think . Firing Bolton would go straight against Adelson and would invite retaliations. Adelson is funding the GOP.

      • Kay24 on July 7, 2019, 11:49 am

        Iran has also stated they do not want to deal with Bolton in any way, so this might be just a ruse.
        He has played bad cop all the time.

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