How to Develop an Economy Under Occupation

The British Mandate here proved it's not impossible. Israel should simply be demanded to remove its restrictions.

What British scientist Stephen Hawking did – refusing to sit together with President Shimon Peres at an official conference in Jerusalem this month – Palestinian President Mahmoud Abbas cannot afford to do. Hawking's decision somewhat cracked Peres' international aura as a peacenik. The cracks were plastered over at the conference of the World Economic Forum last week in Jordan, when Abbas once again exchanged smiles with Peres and the honeyed words of the Israeli president once again covered up his long-term actions to shrink the Palestinian expanse and slice it up into enclaves.

A heavy cloud of suspicion and cynicism separated the smiling conference initiated by the World Economic Forum and the Palestinian rank and file. The cloud only thickened when U.S. Secretary of State John Kerry announced his $4 billion plan to promote the Palestinian private sector in the West Bank and Gaza, a task whose practicalities Kerry delegated to the Quartet on the Middle East, which consists of the United States, United Nations, European Union and Russia and is headed by Tony Blair.

(And here something is annoying: Most of the media reports mentioned only the West Bank. Kerry ignored East Jerusalem, but a European diplomat who supports the plan told Haaretz: After all, for us East Jerusalem is part of the West Bank).

Since the launching of the Oslo Accords in 1993, leading U.S. officials have been repeating the mantra that economic development and encouragement of the private sector are important for peace, and that peace is important for the private sector. And the result?

As the World Bank stated specifically in a report published in March, since 1994, and parallel to the Oslo process, there has been a consistent decline in the Palestinian productive sector and its ability to export, due to Israel's policy of imposing restrictions. Meanwhile, encouragement of the private sector as part of the negotiating process led to a number of Shin Bet security service members and former military commanders being added to the esteemed list of Israeli businessmen. It also enhanced the quality of the suits worn by several senior members of the Palestine Liberation Organization who returned from Tunis, and of several Palestinians who are graduates of Israeli prisons.

The leaders failed to keep their promise to provide a state for their people, but they certainly did provide extra material comfort for their families. Is there a connection between the powerlessness of the Palestinian leadership and its diplomatic failures on the one hand, and the increasing wealth of its members and associates on the other? There are Palestinians who don't end the previous sentence with a question mark, but are convinced that it's a correct description of the situation. The talk about $4 billion sounds to them even today like a bribe to get the Palestinian leadership to return to the negotiating-for-the-sake-of-negotiating table, forget about the United Nations and prevent the popular resistance from taking shape and growing.

No intention to retreat

Europe and the United States will be spared a lot of headaches if the PLO representatives stop positing "preliminary conditions" and talk to Israel while it continues to implant its own preliminary conditions in the ground.

Under the shadow of the suspicion of bribery, Palestinian spokesmen hastened to say that they have no intention of retreating from political positions in exchange for economic incentives. One of those spokesmen was the director of the Palestine Investment Fund, Dr. Mohammed Mustafa. European diplomatic sources say that the development plan to which Kerry was referring is based on a complete and detailed plan developed by the PIF, and submitted to Kerry by Mustafa himself.

In his reply to Haaretz, Mustafa neither confirmed nor denied this, but said "Secretary Kerry's team and the Quartet did not finish preparing their 'plan' as far as we know. What we know about the 'plan' so far is limited to the statements made by the secretary on several occasions – the last time at WEF at the Dead Sea. He mentioned sectors but not specific projects yet. The sectors mentioned (7 or 8) cover almost all sectors of the key economic sectors and more or less the same sectors that we covered in the PIF-planned infrastructure investment plan.

"We sure hope that our planned projects, especially tourism and minerals developments from the Dead Sea, launching Wataniya Mobile services in Gaza, and building an airport in the West Bank would be included in the secretary's plan. We also hope that the Israeli side would facilitate the development of these and the other projects included in both plans."

The Palestinians are incurably polite: "That the Israeli side would facilitate them" should be translated to, "That Israel will stop sabotaging the Palestinian economy." The British Mandate in Palestine/ Land of Israel proved that it is possible to develop an economy under occupation. So, on the contrary, instead of declaring that it's impossible to talk about economic development without a peace agreement, Kerry and Blair should be presented with a list of steps that Israel ought to be compelled to take immediately if they want to implement their vision of investment and development.

Following is a partial list, for starters:

- Area C is transferred to Palestinian civil and administrative responsibility

- Freedom of movement via the Erez checkpoint is restored to the Palestinians

- Removal of prohibitions against Gaza residents staying in the West Bank

- Removal of restrictions on the marketing of Palestinian products in East Jerusalem

- The Interior Ministry overturns all the discriminatory policies against foreign citizens whose destination is the West Bank and Gaza: issues them work permits (and not only three-month tourist visas), recognizes their right to travel all over the country without restrictions. Not only tycoons, but also lecturers and teachers, delegations of doctors from abroad, computer experts, etc.

- Approval of the Palestinian Authority's water projects

- The immediate addition of tens of millions of cubic meters of water for the Gaza Strip

- A change in construction regulations in East Jerusalem so that Palestinians, and not only Jews, will be able to build houses there