Maintaining Palestinian Peace by Putting Prosperity First

Operation Protective Edge looks like it will end the same way that the last two operations, Cast Lead and Pillar of Defense, did. A formal or informal cease-fire will hold for a while, aid money will flow into Gaza to rebuild the war damage and keep the economy’s head just above water. Israel’s blockade will stay in place while Hamas plots and plans how to liberate Palestine.

Could it be different this time?

There are faint signals that Netanyahu has been giving second thoughts to his Palestinian strategy of isolating Hamas and the Gaza Strip, maintaining the peace process with Palestinian President Mahmoud Abbas at a temperature just above freezing point and waiting. Waiting for what it not clear, but waiting seems to be Netanyahu’s modus operandi in all things so why not regarding the Palestinians?

In fact, it hasn’t been too bad a strategy at all. We’ve been waiting since 1967, or even 1948, and in the meantime Israel is still here, militarily and economically stronger than it ever has been, despite repeated warnings that the occupation was unsustainable, that we risked becoming a pariah state and that militarily we can’t couldn’t hold out forever against the Arab world.

But, as investment consultants routinely warn, “past performance is not indicative of future results.” And so it is with diplomacy.

Neither Israel nor the Palestinians are mentally ready for peace; even if, by a lot of American coaxing or visionary efforts like those of the late Yitzhak Rabin, an agreement is achieved, it would be very unlikely to hold. We can have a cold peace with Egypt and Jordan dictated by treaty from the top, but we and the Palestinians are too closely entwined with each other – too much history and too much daily contact – for a future together to be based on a piece of paper.

Fixing the Palestinian economy – not by oodles of foreign aid (it’s been tried and failed) but correct policy – would be a stronger basis for lasting peace and one that would not have to take more than a few years to gain traction.

Rising above the strife

The Palestinians could learn from Singapore. Like the West Bank and Gaza, Singapore is a tiny place and, as its economic takeoff was gathering pace in the 1960s, it was wracked by internal chaos and external threatens from its two big neighbors, Malaysia and Indonesia.

If Singapore had the advantage of being politically independent and an established center of international trade, it had the disadvantages of being a multiethnic society with little experience of self-rule. Asia at the time looked a lot like the Middle East today – war was raging nearby in Vietnam, as it is in Syria and Iraq today, and communism presented an alluring but destructive ideology, as does political Islam for the Arab world. There was little tradition of democracy or rule of law in the region.

Yet Singapore managed to rise above the region’s problems. Under Lee Kwan Yew – its first prime minister – the city-state didn’t so much pursue a policy of laissez faire economics as engage in a relentlessly determined drive to develop industry and, later, finance and technology. The city state’s Central Provident Fund is a compulsorily savings scheme used to finance housing, education,health and infrastructure development.

Today, Singapore is a contradictory mixture of capitalism (it’s No. 2 in the world in the Heritage Foundation Index of Economic Freedom) and statism (the six biggest government-linked corporations account for about 20% of the Singapore stock exchange’s market capitalization.) On the other hand, Singapore’s democratic credentials are spotty: Lee was not only the country’s first prime minister, he was prime minister for a very, very long time – 31 years.

How to become a second Singapore

To become a second Singapore would take a sea-change in the attitude of the Palestinian leadership. It wouldn’t require Abu Mazen & Company to give up the struggle for a state or transform the PA into a true democracy, but it would mean devoting at least as much attention to building Palestine from the ground up.

It would mean spending less time gaining admission to United Nations institutions and more time building industrial parks in Ramallah and technical training schools in Jericho. The West Bank, at least, has some of the makings of a small and prosperous economy – its proximity to Israel, a reasonably well-educated workforce, a large diaspora community, access to the Arab market and more international aid money that most countries enjoy. And, as annoying as it is to the Palestinians, they enjoy an Israeli security umbrella that protects them from the region’s turmoil.

There isn’t much precedent for this kind of government in the Arab world: With the exception of Dubai – another city state, like Singapore – no country has demonstrated anything like the business drive, you see in Singapore or many other Asian countries. But the Palestinians would be well advised to give it a try: Whether it’s before liberation or after, Palestine stands no chance of becoming stable and prosperous without adopting the Singaporean ethos; that is, unless there are pools of oil under the West Bank that6 have yet to be discovered.

Israel needs to learn something from Singapore, too, if the Palestinians are going to succeed. Netanyahu has talked here and there about an “economic peace,” but it smacks more of the kind of waiting game he prefers than any real desire to see the West Bank and Gaza develop economically. But for the Singapore strategy to work, Israel would have to come on board, not just by removing roadblocks but by facilitating international trade and travel and giving Palestinian businesses more access to the Israeli market.

It would take the kind of vision and courage that the prime minister has shown little of in the past. He would have to stare down a settler leadership that sees any Palestinian advance as a threat to the Greater Land of Israel, as well as the Palestinian militants who would inevitably try to exploit every new freedom to smuggle weapons or fighters across borders.

That’s the West Bank. In Gaza, the situation for now looks hopeless. Hamas is still an ideological movement directed toward liberating Palestine and imposing Islam. But, even before the war, the movement was in enough of a funk to join a national unity government as the junior partner with Fatah; hopefully, Protective Edge has weakened it enough that it will cede more control to Abbas. Either way, easing border controls over Gaza would help revive business better than billions of dollars in international aid and would break the lockhold Hamas has established over the economy through a regime based on smuggling and cronyism.