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.