Opinion

Jared Kushner's 'Paradigm-busting' Mideast Peace Deal Just Won't Work

Kushner's 'all new' economic peace approach has been tried before. It doesn't work. And for Gulf states, long seeking deeper ties with Israel, it won't help either

Israeli Prime Minister Benjamin Netanyahu shakes hands with Senior White House advisor Jared Kushner during their meeting in Jerusalem May 30, 2019
\ HANDOUT/ REUTERS

UPDATE: U.S. Mideast envoy Greenblatt says plan's publication may be postponed to November

As the unveiling of the "full" Kushner Mideast peace plan recedes once again, the features of a new, altered U.S. policy are becoming more apparent, whether or not a formal announcement of its parameters ever emerges.

The preparations for an "economic workshop" in Bahrain in late June come after several months of leaks and commentary indicating that the White House is backing away from supporting a Palestinian state. Key U.S. officials are not even explicitly ruling out unilateral Israeli annexation of parts of the West Bank.

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This is a radical shift from the longstanding, internationally agreed position that land and borders, as key issues in the conflict, need to be part of a negotiated package.  

Instead, Jared Kushner has emphasised the opportunity to improve the living standards of Palestinians through a focus on the economy. He has suggested that ordinary Palestinians will welcome this, even if their leaders don’t - though his apparent concern for representing the ordinary Palestinian does not extend to proposing that they should get to participate in long overdue elections.

Developing the Palestinian economy would be an essential part of any peace agreement. But it cannot be a substitute for one.

Firstly, an injection of Gulf and/or European capital will not be enough to persuade Palestinians to give up their claims, aspirations and rights to self-determination.

Palestinian president Mahmoud Abbas meeting with US White House aide Jared Kushner in the West Bank city of Ramallah. August 24, 2017
OSAMA FALAH / PPO / AFP

It is unlikely that any Palestinian leader would accept an offer to obtain economic incentives - aid, investment, some jobs in Israel or a new airport - in return for giving up on the nation-state, independence and sovereignty that they have long been promised. Any leader who goes down this route will be accused of selling out a nation. And they probably wouldn’t last long enough in power to realize those incentives anyway.

In addition, any effective solution needs to find ways to acknowledge the claims, rights and suffering of both sides.

For instance, repeated Palestinian surveys have suggested large sections of Palestinian society would be more willing to accept a territorial compromise for peace if an agreement included Israeli recognition of Palestinian historical and cultural links to the historical land of Palestine, or an Israeli acknowledgement of responsibility for the Palestinian refugee issue.

Similarly, some studies of Palestinian refugee populations suggest that for many refugees, recognition of their suffering is at least as important as material compensation.

But such declarations are not easily forthcoming precisely because questions of history, identity and responsibility are deeply sensitive for Israelis, too. This is clearly a conflict in which moral recognition, national identity and historical narratives are central issues - not only land.

Secondly, and crucially, an "economy first" - or "economy only" - approach cannot in fact even fix the economy. The U.S. administration likes to portray its approach as breaking with the tired old paradigms of the past.

Palestinians make their way to attend last Friday prayer of Ramadan in Jerusalem's al-Aqsa mosque, at Qalandia checkpoint, in the Israeli-occupied West Bank May 31, 2019
\ MOHAMAD TOROKMAN/ REUTERS

But an "economy first" approach has been tried before - and it wasn’t viable.

Back in 2005, the former World Bank president James Wolfensohn was made Quartet peace envoy with a mandate to heal the economy. He raised $9 billion for the Palestinian economy over three years, and negotiated trade transit routes for Gaza at the time of the Israeli withdrawal. But the continuing conflicts – and after a few months, the election of Hamas - thwarted his plans

Fast forward three years, and Tony Blair, the new Quartet envoy, tried to re-energize the peace process by bringing Gulf investors into the Palestinian economy, holding large-scale investment conferences in Bethlehem and Nablus. But once again, the economic potential was held back by a lack of political progress.

The Palestinians have high quality human capital, an educated and loyal diaspora, a tech-savvy young population, a climate conducive to tourism and agriculture and, in Gaza, even a position on the Mediterranean and rights to offshore natural gas. The barriers to Palestinian economic development come not from a shortage of capital, but from the political situation.

Everywhere in the world, investors prefer to operate in a predictable legal and political system with clearly defined property rights and straightforward, reliable processes for the movement of people, goods and capital. In the Palestinian context, all these things are compromised. Politics is unavoidable.

Saudi Crown Prince Mohammed bin Salman (R), Sheikh Mohammed bin Zayed Al Nahyan (C), Crown Prince of Abu Dhabi and Bahraini King Hamad Al-Khalifa during the Gulf Cooperation Council (GCC)in Mecca. May 31, 2019
AFP

The occupation, the continuing conflict and Israel’s security and political concerns combine to ensure heavy restrictions on the movement of people and goods. These are sometimes eased, but unpredictably - and represent one of the major obstacles to developing a small economy that needs to trade in order to grow. It is difficult to see how the U.S. plan would address these issues without a political agreement.

As for the legal and political environment, the future of Palestinian government and governance, including the survival of the Palestinian Authority, is all thrown into question as the U.S. hints more and more broadly it may dispose with the two state solution, and as Israel’s leadership talks openly of annexations.

In this context, boosting the economy would likely depend on more aid. After Oslo, Palestinians became among the largest per-capita recipients of aid in the world, though donor support has declined more recently. Mr Kushner has criticized Palestinian aid dependence. Palestinians don’t want to be dependent on aid, either. They would rather be able to drive their own economic development. But politics puts that out of reach.

The U.S. has sought to work closely with Gulf states to develop the "economic peace" plan, but given all of the above, it is hard to find interlocutors in the Gulf who really believe the U.S. approach will work.

The Trump administration may be betting that the Gulf and Europe will provide funds - the Europeans because they always do, and the Gulf because they want to calm the situation in order to be able to develop their own ties with Israel.

Jordanian police stand guard as members of the Muslim Brotherhood take part in a sit-in near the U.S. Embassy in Amman against Jared Kushner's visit to Jordan. May 28, 2019
\ MUHAMMAD HAMED/ REUTERS

But it will be politically costly for Gulf states to pay for what looks like a compensation-for-statehood fund for the Palestinians without any plausible political horizon.

Populations in the Gulf don’t see the Israeli-Palestinian issue as their biggest priority, but they object strongly to the treatment of Palestinians, and the objections are loudest in the country with the most open political debate, Kuwait.

Meanwhile, Egypt and Jordan, who made peace with Israel much earlier, find themselves caught between populations who are hostile to peace without Palestinian statehood, and a U.S. administration placing heavy pressure on them to sign up to the new framework.

Gulf states have wanted closer relations with Israel for a long time.

Oman and Qatar opened Israeli trade offices in 1996, in the early years of the Oslo process. In 2002 Saudi Arabia sponsored the Arab peace initiative, which offered recognition of Israel by the Muslim world as part of a two state solution. Recently, Saudi and Emirati officials have grown conspicuously closer to Israel because of a sense of shared threats from Iran. 

But a bigger, historic opportunity is being missed: ties between Israel and the Gulf could be stronger, deeper, more public and more sustainable if there was a serious peace process to work with.

Jane Kinninmont is a political and economic analyst specialising in the Middle East. In the 2000s she covered the Israeli and Palestinian economies as an analyst and forecaster. She is currently Head of Programmes at The Elders. Twitter: @janekinninmont 

This article is written in a personal capacity and reflects the views of the author