The day after Bahrain: Between economy and peace

Failure of the diplomatic effort derails the economic channel

A PALESTINIAN PROTESTS the Bahrain summit (photo credit: REUTERS)
(photo credit: REUTERS)
Various researchers of political psychology have examined the implications of proposed compromises in conflicts involving “protected values” – those that members of a certain group perceive as a central element of their identity. The studies have identified a “backfire effect” when offering material or economic compensation in return for compromise on protected values. They found that such offers only fuel anger and opposition and are perceived as a humiliating and immoral mixture of the profane and sacred.
Such results have emerged from studies in India, Indonesia and Iran, as well as in the context of the Israeli-Palestinian conflict. This insight comes to mind when observing the June 25 Bahrain conference and the “Peace to Prosperity” plan unveiled there by Jared Kushner and the Trump administration peace team.
The link between the political and the economic elements has come up repeatedly throughout the Israeli-Palestinian peace process. Shortly after the signing of the 1993 Oslo Accord, Shimon Peres published his peace-era economic vision for the region in his book The New Middle East. Along these lines, the Oslo process resulted in annual economic summits that brought together dozens of leaders from the Middle East, North Africa and elsewhere, along with representatives of major corporations.
The first summit was held in Rabat in 1994 (with Rabin, Arafat and delegates from 60 states in attendance), then in Amman (1995), Cairo (1996), and Doha (1997). In conjunction with the 2007 Annapolis process, Middle East Quartet representative Tony Blair sought to promote a series of economic projects in the Palestinian Authority. In 2013, a major $4 billion initiative for the Palestinian economy was launched concurrent with secretary of state John Kerry’s peace initiative.
These measures were undertaken in tandem with peace negotiations, in cooperation with the leadership of both sides of the conflict, and with widespread international backing. None of the above applies to the current US initiative launched in Bahrain. That took place in the absence of any peace process, and neither side of the conflict had representation. The initiative was launched without consulting the PA beforehand, and various international actors either chose not to attend or decide to send low-level delegates. Going by experience, failure of the diplomatic effort derails the economic channel, too.
The debate over the connection between the political and economic pillars also arose in 2009 when Netanyahu announced his “economic peace” plan, which he said would lead to a political peace. His proposal corresponded with liberal theories of international relations, positing that trade and economic interdependence reduces the risk of war (the “commercial peace” theory). Realist international relations theories reject this approach, arguing that there is not necessarily a connection between the two, or that the opposite is true in terms of their causal relationship: peace enables commerce and interdependence.
They also claim, and Marxist theoreticians also raise this point, that trade can constitute a source of conflict. A study by Galia Press-Barnatan and Mor Mitrani about “economic peace” in the Israeli-Palestinian context presents additional criticism of the liberal model. The study underscores that in asymmetric conflicts, especially when one of the sides is a non-state actor struggling for statehood, the political desire for independence overcomes economic considerations. In addition, political and economic independence is a prerequisite for promoting interdependence ahead of peace.
On the eve of the Bahrain conference, following two years of anticipating the Trump “Deal of the Century,” the Kushner-led team presented an economic plan that makes a supreme effort to distance itself from any political context, from the political circumstances on the ground, from the required political measures and the parameters for a permanent status agreement. The team even underscored the fact that the authors of the economic plan were unaware of the details of the political plan (which may or may not be made public at some unknown date).
THE PLAN makes no mention of a Palestinian state (only of “Palestinian society”) or of east Jerusalem. It also neglects central components related to any current or future economic move, such as the 1994 Paris Agreement, setting out economic relations between the sides, Area C of the West Bank and the limitations on free movement. These elements are at the crux of World Bank reports on the Palestinian economy and possible measures for development and growth. In addressing the conference, Kushner conceded that the economic plan would only be realized under the terms of a peace agreement (as noted in the plan itself), but made clear that for now, the US is only focusing on an “economic vision.” Many ideas and elements of the plan have already been proposed over the years in blueprints and proposals by the Quartet, World Bank and the Kerry economic initiative.
Even if the US team acknowledges the economic-political link, its decision to publish a $50 billion plan for the Palestinian economy without a parallel diplomatic plan or any commitment to the two-state solution intensifies the sense that this initiative is an attempt “to buy” the Palestinians in return for concessions on their “protected values.” The economic plan is not presented in a vacuum. It took place against the background of a series of US administration measures against the Palestinians, which did not leave any room for trust in its ability to advance peace. These include the US Embassy move to Jerusalem, US funding cuts to the Palestinians, the PLO office closure in Washington, and the participation of the US ambassador in the inauguration of the “Pilgrim’s Path” in Silwan. Many have also pointed to the fact that the economic plan includes photos of existing projects that the Trump administration has defunded.
The tension at the conference between the US rhetoric and the messages of other international participants was remarkable. Tony Blair, for example, said the political and economic components could not be separated, stressing a commitment to a two-state solution. IMF chair Christine Lagarde stressed that peace, trust and political stability are essential for any economic plan to succeed. Saudi Minister Mohamed Al-Sheikh noted that similar economic projects to those suggested in the plan were discussed during the Oslo process, but they had been possible only because there was Palestinian hope and belief in serious peace intentions, and this hope must therefore be restored. Bahraini Foreign Minister Sheikh Khalid Bin-Ahmed Al-Khalifa also spoke in various interviews with Israeli media of the need for a long-term political solution based on two states.
In his closing statement at the conference, Kushner noted that as a businessperson, he examines measures according to results and not efforts. If we apply this test to Kushner himself, the result is grim. Two years after taking on his role, all we have seen from a supposedly ambitious plan to end the conflict is an “economic workshop” that was conducted in an amateur way, without the parties’ representatives, and with a strange guest list amid much international skepticism. There is no sign of a political dialogue process, no communication between Washington and Ramallah, the PA is on the verge of collapse (without any US effort to resolve the funding crisis), the Gaza border is nearing a blow-up and tensions in east Jerusalem are escalating.
Israel heads to elections in September. If a new government wishes to promote a diplomatic initiative on the Palestinian front, it will have a hard time mobilizing US assistance given the current circumstances. Instead, it should consider the approach taken by Israel and Egypt in 1977, Israel and the PLO in 1993, and Israel and Jordan in 1994: a diplomatic breakthrough achieved through direct dialogue.
The writer is a policy fellow and director of the program on Israeli-Palestinian peacemaking at Mitvim-The Israeli Institute for Regional Foreign Policies. He is a Postdoctoral Fellow at The Leonard Davis Institute for International Relations and at the Harry S. Truman Research Institute at the Hebrew University of Jerusalem.