Why Trump should adopt a bottom-up approach

In March 2010, the Palestinian Authority started building the “Freedom Road.” It was Land Day – the Palestinian annual commemoration of an Israeli decision in 1976 to appropriate West Bank land for settlements – and Salam Fayyad, the Palestinian prime minister at the time, was visiting the village of Bani Hassan. The residents complained to Fayyad that they could not access their olive groves, nor a nearby natural spring. So Fayyad held a ceremony, announced that he would build a new road, and allocated the necessary funding. Within weeks, the two-kilometer stretch of asphalt was completed. For the residents, it was a day of celebration. A few weeks later though, the IDF came and dug up part of the road. Apparently, the land the road was built on was Area C – the part of the West Bank under Israeli control – and it had been paved without Israeli approval. Fayyad returned and again ordered to build the road, but this time more covertly, without heavy machinery. It took some time, but again, within a few weeks, the road was repaired. But then again, the IDF returned and ripped it up. Fayyad didn't give up. He returned a third time and instructed the contractor to keep at it. “Build one meter at a time if you have to,” he told him. The contractor did, and the road is still standing seven years later. The story about “Fayyad's Freedom Road” – as it became known – is making the rounds these days in Ramallah, as Palestinians anxiously await – while clogging the streets every afternoon for Ramadan shopping – to see what US President Donald Trump is planning to do with the Israeli- Palestinian conflict. The road is symbolic of the bottom-up process to statehood that some Palestinians and Americans are lobbying the White House to adopt. That process has the support of former senior US government officials like Elliott Abrams and Dennis Ross, who think that now is not the time to try to reach a comprehensive peace deal. These Palestinians and Americans believe Trump is mistaken when he says that a peace deal is currently possible, owing to the mistrust between the current political leadership on both sides and an unwillingness to compromise. Instead, those officials believe that Trump should focus on small, attainable steps, like building up the Palestinian economy and the necessary government institutions, as well as more permits to build homes and factories in Area C. Proponents of the bottom-up approach have a point. Even if a state were established today, the PA government institutions are not yet robust enough to facilitate independence and its economy is not self-sufficient. It simply would not be viable. A visit to Ramallah is a stark contrast to that conclusion. There, construction of a whole block of new government buildings is almost complete – a new Interior Ministry, Education Ministry and more. But as one prominent Palestinian pointed out to me: don't judge the buildings by their exterior. The question is what's inside, and there, he said, you won't find much. For Netanyahu, this approach is attractive since it relieves him of having to negotiate now final-status issues like Jerusalem and borders. It does require him to give permission to the Palestinians to build in Area C, which would pit him against some of the more right-wing parts of his coalition. But while Naftali Bennett and Ayelet Shaked are opposed to Palestinian building in Area C – which accounts for about 60 percent of the West Bank – Israelis on the Right seem to not really understand the difference between Areas A, B and C. When parts of C – where Israel retains security and civil control – are suddenly turned into B – where Israel only retains security control – Netanyahu will not come under criticism from the Right as he did when security prisoners were released a few years ago. As one senior government official said: “It all seems like alphabet soup.” The problem for proponents of the bottom-up approach is that Trump speaks about the “ultimate deal” in a way that makes it seem as if there is some reset button that would lead to peace and Palestinian independence. Reports that the Americans are working on new parameters for a peace deal, reinforces the assumption that Trump is aiming for a home run, not a base hit. Trump seems to want a deal because no one else has achieved it before him. A number of officials who have spent time recently with the president's Middle East envoy, Jason Greenblatt, walked away with the impression that the White House is taking the issue seriously, but is no different in its approach than Barack Obama was. As a result, they predict, the outcome of this effort will not be different than it was under Obama – a failure. To prevent that from happening, it might be time to adopt Fayyad's “meter-by-meter” approach in a more serious way. That might not end the conflict, but it would be a huge step toward achieving what Trump calls the “ultimate deal.” *** If you care about Israel, the following story will disturb you. For that very reason, it is important you read it. The government, led by Netanyahu, likes to brag about Israel's innovative culture, its creativity and the success of its start-ups. There is definitely what to be proud of: Mobileye's sale to Intel for $15 billion, Waze's sale to Google for $1 billion, and the consistent increase in investments and exits over the years. Nevertheless, not everyone in this country can work in hi-tech. While technology accounts for over 50 percent of Israeli exports, the economy is still largely dependent on traditional industries, like Haifa Chemicals, which will close shop next week if the government doesn't take immediate action. The story is quite simple. Haifa Chemicals was founded in the 1960s and is named for the city where it stores its ammonia, brought into Israel by ship. The ammonia is processed at factories in Haifa and in the Negev and turned into nitric acid, which is then mixed with potash, creating potassium nitrate, a key component for fertilizers. Ninety-seven percent of Haifa Chemicals' product is then exported to Europe, the US and South America, making it the country's second-largest exporter of shipping containers, with 20,000 sailing the world annually. The business, which employs some 900 people, is lucrative, bringing in annual revenue of close to $700 million. Add to that second-and-third-tier contractors, and you get to over $1 billion. If it is so successful, you might wonder, why is it closing down? It seems to be a case of government incompetence. Since inception, Haifa Chemicals stores the ammonia it uses to produce fertilizer in a large tank near Haifa Port. Over the years and particularly since the Second Lebanon War in 2006, concerns have been raised about the tank's safety. Haifa Mayor Yona Yahav has led the charge that the tank is a disaster waiting to happen. Last year, he commissioned a report – later refuted by the National Security Council – which claimed that a missile attack on the facility could result in a massive deadly explosion. Hezbollah chief Hassan Nasrallah pounced on the alarmist fears and threatened to target the tank in a future war, saying it would be “exactly like a nuclear bomb.” After a series of government and court decisions, the tank is now being emptied, and even though a number of alternatives have been proposed, the government is afraid to approve any of them. Instead, ammonia is not being allowed into the country and without ammonia, Haifa Chemicals can't make fertilizer. In other words, even though the government in 2013 promised to find an alternative to import ammonia before shutting the tank, it hasn't, and now the business will simply shut down. For a country that is consistently slipping in the “ease of doing business” rankings – Israel dropped from 26 to 52 last year – this is not just damaging; it is a stain on the Israeli economy. I met this week with Jules Trump, who together with his brother Eddie has owned Haifa Chemicals since 2008. The Trump brothers were born in South Africa and moved to the US some 40 year ago, where they established a successful business, focused primarily on retail and real estate. Haifa Chemicals was another smart investment they made, but it came with an added attraction – it was in Israel. For the brothers, who were raised in Pretoria as strong Zionists, it was an opportunity to make money and help the Jewish state at the same time. One of Trump's daughters lives in Ra'anana and he has a grandchild enlisting soon in the IDF. “There is no question that the wave of populism is stronger because I am a foreigner,” he said. “You don't get credit for Zionism or for my children living here and grandchildren going to the army.” I asked Trump how he explains to his American friends and business colleagues what is happening in Israel. “People can't believe it,” he said. “This is a business that has been profitable and the gold standard of the industry, but suddenly we are shutting down for no reason. People don't understand this.” What particularly bothers Trump is the way he has been treated by the government – ministers won't meet or talk with him. Besides, for a handful of officials in the Treasury and the PMO, almost everyone is caught up in the anti-Haifa Chemicals populist wave. “People say we are just exporters as if we do nothing for the country,” he said. “They say we live outside the country and just collect money, but what they fail to understand is that the money brought into Israel every year from the business is the equivalent of the few F-35 fighter jets that arrive each year. It is as if there is a factory here that makes F-35s.” What would happen, I asked, if a foreigner asked you if they should invest in Israel? What would you tell them? Trump was quiet for a moment. “I am embarrassed,” he said. “We are strong Zionists and have encouraged people to come and see opportunities. This is simply embarrassing.” Haifa Chemicals has made mistakes over the years in its own handling of the ammonia tank, but what is happening now is not just embarrassing for Trump. It is an embarrassment for Israel. Hopefully some of that embarrassment is being shared by Netanyahu, Finance Minister Moshe Kahlon and Environmental Protection Minister Ze'ev Elkin. Maybe that way someone will do something before 900 people lose their jobs and a successful business shuts down for no good reason.

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