Economic peace as an alternative to political solutions

A Palestinian man counts his notes (Abed Rahim Khatib - APA Images)

Adnan Abu Amer

Middle East Monitor  /  June 11, 2020

With the approach of the implementation of the Israeli annexation plan in the West Bank, and the dissipation of talks about a two-state solution with the Palestinians, there has recently been a series of Israeli offers and proposals to resolve the conflict between the two sides.

Member of the Palestine Liberation Organisation (PLO) Executive Committee, Azzam al-Ahmad, announced that Israeli Prime Minister Benjamin Netanyahu has proposed “an eternal economic autonomous governance that does not reach the level of a state or a quasi-state,” even though Israel has been trying for several decades to impose an autonomous governance system on the Palestinians without the possibility of controlling their territories, crossings and airspace.

Since the suspension of the Palestinian-Israeli negotiations in 2014, Israeli and American proposals to the Palestinians have focused on proposals that do not amount to a two-state solution, or a declaration of a Palestinian state. In contrast, these proposals have mostly focused on achieving progress in the economic situation in the West Bank.

The Israelis claim that improving the economic conditions of the Palestinians will create a favourable atmosphere toward achieving progress in the political scene, and that the economic recovery will help create an atmosphere of trust between the two sides. However, these Israeli and American theses mean, in one way or another, the necessity to firstly reach an acceptance of “economic peace” between the two countries’ peoples.

Accordingly, Israel has haggled the Palestinians for the tax money, and the US administration has pledged in the ‘deal of the century’ to provide billions of dollars to contribute to easing the tension in the West Bank, which is more likely to witness an escalation and uncontrollable protests that could turn into a popular uprising, with the start of the implementation of Israeli annexation plan.

Although the PLO, the political reference of the authority, rejects any proposal to achieve the “economic peace” initiative with Israel, considering that the “peace process is political par excellence”, this cannot be considered a final rejection, as it has not been announced by senior negotiators, or spokespersons for President Mahmoud Abbas. This means that the continuous official Palestinian silence on “economic development” projects can be considered a form of acceptance of such projects for the next stage.

However, the prevailing Palestinian conviction is that the promotion of economic support in favour of achieving progress in political talks has been proved unsuccessful, as a strong economy cannot be achieved under occupation, and the issue is primarily a matter of national liberation of an occupied people, and the return of more than half of the homeless among them who are outside their historical homeland in exile and in the diaspora.

Nevertheless, the Palestinian Authority is still suffering consecutive financial crises represented by the inability to pay the salaries of its employees, and the unfairness of the Paris Economic Agreement, which has linked the Palestinian and Israeli economies, giving Israel the right to seize the tax money collected from goods flowing to the Palestinian territories. This has become a pressure tool in Israel’s hands against the PA, stopping the flow of money whenever needed and releasing it at the time it finds convenient.

The “economic peace” theory calls for building trade relations between Israel and the West Bank that would be a prelude to a future political settlement, as the economic peace is driven by its need for security and peace, and the Palestinians’ need for economic prosperity.

According to a political document published by the Peres Centre for Peace, it is concluded that economic improvement is favourable to the promotion of the political process, through an administration headed by a special Israeli minister who undertakes projects together with the Palestinians, in coordination with the international community, the Quartet and the Palestinian Authority, with the support of a team of active experts specialised in the economic field.

The call for economic prosperity for the Palestinians instead of political negotiations is not based on realistic foundations, as it is impossible to separate the economy and the political situation, taking the example of the Quartet’s efforts that have failed to stimulate the West Bank’s economy to date, given the lack of freedom of movement for goods and individuals, which makes this economic peace a “pointless idea”.

Besides, the Palestinian economy cannot prosper under occupation and barriers, and control over land and capabilities, in addition to 500 military barriers in West Bank cities. This would lead to a catastrophic failure of any alternative economic peace project for the political track. What is required is that the two things move in parallel.

However, these Israeli offers did not specify whether the Gaza Strip would be part of the game and whether this is related to the West Bank only. Here, the Palestinians fear the political repercussions on the project of “functional geographical sharing” that the Israeli right wants to establish between Gaza and the West Bank to keep the division between the two areas.

The signs of reconciliation between Fatah and Hamas, and the return of the geographic cohesion between Gaza and the West Bank are not visible. This encourages keeping Gaza out of “coverage” and excluding it from any expected economic plans.

Adnan Abu Amer is a Palestinian academic