On Palestinian economy, motherhood and apple pie

At the 1991 Madrid Conference, the New Middle East was invented. Water flowed from the Red to the Dead Sea, trains traveled between Amman and Tel Aviv and a Middle East Development Bank helped finance infrastructure projects. The Oslo Accords, promising to end the Israeli-Palestinian conflict, further fueled the imagination.

The US administration wishes to repeat the model of the Regional Economic Development Working Group (one of five created in Madrid), based on economic progress detached from politics. However, 25 years of bitter political experience of dead and assassinated leaders, broken promises, failed negotiations and violent confrontations have passed since then.

That is the major flaw of the US “Peace for Prosperity” proposal. It is totally detached from the sad and painful reality and sets unattainable goals. The reality is that the Palestinian economy will depend on Israel for the foreseeable future even if peace could be reached now. A road and railway between Gaza and the West Bank depend on Israel; the natural market for agricultural produce is in Israel; and the Palestinian tourism industry will depend on a political and technical agreements to allow tour guides to work on the other side of the future border, tourists buses to cross, etc.

Peace for Prosperity does not mention Jerusalem or borders, so it is not clear how they will impact the Palestinian economy and its various sectors. After Madrid and Oslo, the World Bank prepared a comprehensive report that took into account the Jerusalem factor and its impact on the Palestinian economy. This could be done today without necessarily assuming political changes in the current situation in this city.

Doubling the Palestinian GDP, reducing

the unemployment to a single digit and halving the poverty dimension in a decade are noble goals, but they require Israel’s cooperation – including allowing large numbers of Palestinians to work in Israel, at least for the next 10 years. Whenever this work is interrupted by the cycle of Palestinian terrorism and Israeli closures, the goal of doubling the GDP drifts further beyond the 10-year finish line. Even under the best of circumstances, the Palestinian economy might fall short of attaining the goals set by the US administration.

Other key issues are missing in the analysis and solution offered. For example, airports and a seaport in Gaza. The absence can be explained by the wish to avoid the discussion of related political aspects or the thinking of the plan’s authors about the economic necessity of these ideas. Their absence in the Egyptian context of the plan can be also explained by Cairo’s refusal to be even remotely linked to possible economic solutions for Gaza. The US administration was also receptive to Jordanian wishes to put a price tag of $540 million on the Red-Dead Canal, and put pressure on Jordan to show up in Bahrain as well as long-term pressure on Israel, which has little interest in this pipe/ canal.

Peace for Prosperity is an important addition to a needed discussion on the various ways to reach a resolution of the Israel-Palestinian conflict, even as its authors have clearly avoided the political ramifications of what is in and out of the plan.

In an ideal Middle East, all those involved would now meet and discuss what they can begin to implement immediately – such as water, education and health – and what should be discussed and implemented at a later stage.

The writer is a veteran Israeli diplomat and head of the negotiating team with the Palestinians, 1999-2000.