Participants of the Bahrain “economic workshop” will surely regret that U.S. President Donald Trump was so quick to announce it. Truthfully, what’s so urgent about it? And had he waited another three years, the guests could at least have enjoyed a wonderful stay at the Shangri-La Hotel, which is slated to open in 2022. According to the Bahraini government, this will be a wonderful vacation site by the sea, with luxury villas and the kind of service only Shangri-La knows how to provide.
But the Four Seasons Hotel in Bahrain’s capital, Manama, is luxurious enough. There are plenty of other luxury hotels there as well. And after all, it’s only for two days.
Granted, the workshop’s organizers don’t yet know how many rooms to reserve, since the guest list hasn’t been finalized. But there will presumably be plenty of available rooms for last-minute attendees.
The Palestinians have already said they won’t come. The Qataris probably won’t either. Turkey – whose president, Recep Tayyip Erdogan, vehemently criticized the idea – apparently won’t be invited. King Abdullah of Jordan will likely to come just to please Trump and Saudi Arabia, but he’d be happier spending those two days elsewhere.
Bahrain, the host, made its own position clear when Foreign Minister Khalid Al Khalifa said this week that the workshop “serves no other purpose” than supporting the Palestinian economy. There will be no diplomatic plan, no discussion of borders or other core issues of the Israeli-Palestinian conflict.
Bahrain “remains supportive” of the Palestinians “in restoring their legitimate rights on their land as well as establishing an independent state with East Jerusalem as its capital,” the statement added. An independent state? Trump has no intention of even mentioning the words “Palestinian state.”
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The discussion now is about the economy, development, investments and governmental and administrative reforms of the Palestinian Authority, according to American media reports. Who will invest? How much will they invest? What will the purpose of the investments be? That’s what the workshop is for.
In February, the New York Times reported that the goal is to raise $40 billion, which would be divided among the PA, Egypt, Jordan and Lebanon. This week, media reports bumped the total up to $68 billion over 10 years. That comes to almost $7 billion a year for those four countries combined.
To put this in proportion, Qatar alone recently pledged $500 million a year just for the Gaza Strip, with no connection to Trump’s “deal of the century,” in order to deescalate the conflict between Israel and Hamas. The PA is getting $20 million a month from Saudi Arabia, and Sudan has received a pledge of $3 billion from Saudi Arabia and the United Arab Emirates, of which $320 million was transferred this month. Rehabilitating Gaza alone is expected to cost several billion dollars.
Will Trump and Israel agree to let some of the donated funds go to Hamas, or will the money be only for the PA? And if so, will America unfreeze its own $300 million in aid to the West Bank? Will Israel return the money it deducted from the taxes it collects on the PA’s behalf? Or will Washington and Jerusalem continue their sanctions, but at the same time demand that other countries open their wallets?
Israel will likely refuse to restore the deducted funds unless the PA stops paying salaries to jailed terrorists and the families of slain terrorists. The entire “deal” could well collapse over this issue alone.
For the Palestinians, there’s a much more important issue. If it accepts donations that aren’t accompanied by a credible pledge of a diplomatic solution, it will be deemed to have “sold” the Palestinian problem, betrayed the refugees and even abandoned the dream of a Palestinian state in exchange for a few billion dollars a year.
Palestinian economists says an independent Palestine that could sell its goods in Arab countries and use Israeli ports to sell them in Western countries, all with no restrictions, would produce many more billions than the PA would receive through this deal.
According to a World Bank study, the PA’s growth could triple if the many Israeli barriers to free Palestinian trade were removed – checkpoints that make transporting goods more time-consuming and expensive, massive bureaucracy that requires dozens of forms and permits, the severance of trade between Gaza and the West Bank, import restrictions, limited numbers of Palestinian workers in Israel, and the PA’s complete economic dependence on Israel in general. Alongside these problems, the study also cited the PA’s poor management and corruption.
Will Trump’s economic plan remove all or at least most of these obstacles? We’ll have to wait and see. But if Israel’s total control over the Palestinian economy continues, the donations raised at the Bahrain conference, if there are any, will mainly serve to finance ongoing activities and pay debts. That’s non-trivial, but it’s no substitute for the need to build an independent Palestinian economy.
Granted, Arab states have pledged to give the PA $100 million a month to cover the shortfall in its budget caused by Israel’s deductions from the tax transfers and the PA’s refusal to accept anything less than the full amount. Nevertheless, this pledge so far remains on paper only. Thus it’s reasonable to suspect that the billions pledged in Bahrain also won’t reach Palestinian banks as quickly as needed.
Another source of money could be the European Union. But there’s a difference between ongoing aid from Brussels, which totaled 359 million euros in 2017 and 42 million more than that in 2018, and an investment of billions to grow the Palestinian economy. The EU won’t rush to open its wallet for a dubious plan that doesn’t propose establishing a Palestinian state – not just because it doesn’t even included a detailed economic plan, but mainly because the person proposing it is Trump.
Trump embroiled the EU in a mess when he withdrew from the Iranian nuclear agreement more than a year ago and is now trying to get it to join sanctions on Iran. So he can’t expect to find an attentive ear and an open hand in Brussels on the Palestinian issue. The EU is sticking to the two-state solution, and at best, it will consider joining Trump’s economic plan only if it explicitly defines the final goal as a Palestinian state.
“Without an Israeli commitment to consent to the establishment of a Palestinian state and an American guarantee that Israel will uphold this commitment, the EU will continue supporting the Palestinian Authority to its current extent, but not beyond that,” a European diplomat told Haaretz this week. “And more generally, why doesn’t the U.S. itself participate in financing the project it dreamed up?”
If his comment reflects the EU’s position, there’s no need to hold your breath for the results of the Bahrain conference. Any economic decision made there will be subject to Israel’s willingness to adopt a viable diplomatic program, or at least to relax its control over the PA. This willingness will depend on the composition of Prime Minister Benjamin Netanyahu’s new government and the political pressure he is subjected to in the month until the conference, and of course afterward.
The conference appears to have been born in the fifth month of a two-year pregnancy. There has been no real preparation and no strategy that would lead to a diplomatic solution, despite the thousands of emails exchanged by Trump’s advisors with Arab and Israeli leaders.
Given all this, it’s reasonable to wonder what the Palestinians gain by refusing to attend it or rejecting any fruits it produces. Palestinian businessmen’s claim that the conference will perpetuate the occupation and play into Israel’s hands isn’t baseless. But the Palestinian position – that the Palestinians’ right to establish an independent state must be recognized before talking about its economic sustenance – may well imprison it in a trap in which it has neither a state nor a functioning economy.
Assuming that right-wing governments continue controlling Israel in the coming years and that Trump is reelected in another 18 months, the dream of establishing an independent Palestinian state will remain a dream. And if a miracle happens and reconciliation between the Hamas and Fatah parties becomes reality, the chances of establishing an independent state will decrease even further, since Hamas objects to recognizing Israel.
In the meantime, the PA could benefit from several billion dollars a year to build an economic infrastructure that would improve its standard of living and be ready in case a state did emerge. True, the occupation won’t end, the settlements won’t be demolished and the arrests, house demolitions and land theft won’t stop. But for five million Palestinians living under occupation, life might be a little better.
It’s worth reminding the Palestinians that even Israel decided to accept reparations from Germany, despite the issues of principle and the moral dilemmas. And that money helped it greatly in building up its state.