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Economy first in Palestine?

With Israeli domestic politics focused on the election early next year, the various players are busy manoeuvring themselves into positions they feel will count in their favour come voting day, including Likud’s strong contender, Binyamin Netanyahu.

On Sunday, Netanyahu repeated his belief that the best way forward with regard to Israeli-Palestinian peace was to prioritise helping the Palestinian economy from the bottom up. Insisting this was not an “alternative” to negotiations, ‘Bibi’ argued that “economic prosperity significantly reduces terror and the foundations of war”.

This was not the first time Netanyahu had staked out his “economy first” position. previous occasions have included an interview with the Financial Times last month. But these most recent comments drew a strong reaction from veteran Palestinian negotiator Saeb Erekat, who denounced Netanyahu’s talk of “economics and fragmentation” as “closing the door to any chance for peace”.

Netanyahu seems to be treading a fine line between staking out a position sufficiently different from Kadima so as to attract dissatisfied voters, and completely writing off any chances for progress with the Palestinians. Yet the interesting thing about his “economy first” stance is that it is actually remarkably conventional, and very similar to the approach taken since the Oslo process in the 1990s through to the Quartet.

The premise of Oslo was that through incremental “confidence-building measures” taken by both sides, the Israeli and Palestinian leaderships would eventually reach a position where the stickier questions of territory, borders, natural resources, Jerusalem and the refugees could be resolved through compromise. A key part was the stimulation of the Palestinian economy and a massive influx of foreign aid into the Occupied Palestinian Territories (OPT).

Of course, the paradox of Oslo was that “on the ground” conditions for Palestinian statehood actually worsened as the decade progressed (this book is a must read); Israeli colonies increased and expanded as did the settler bypass roads, the closure system was implemented at will by Israel, and the fragmentation of the OPT began in earnest along the absurdly contrived contours of Areas A, B and C.

If choosing to sideline any of the issues that Israel deemed too “political” served neither the Palestinian economy nor the cause of peace during the 1990s, it has certainly proved to be a failed strategy in the last few years. Netanyahu may be portrayed as the archetypal hawk (an image he helps to cultivate), but his ideas on the relationship between the Palestinian economy and “peace” are almost identical to those of the Quartet’s envoy, Tony Blair.

In his capacity as official representative of the Quartet (the US, UN, EU and Russia), Blair has consistently responded to questions about continued Israeli colonisation and West Bank fragmentation by pointing to “economic projects” like industrial parks and tourism initiatives in Bethlehem.

In fact, even Blair’s language echoes that of Netanyahu. During a Quartet press conference in September, Blair highlighted apparent “economic and social development” in Jenin as an example of “the bottom-up capability being created for a Palestinian state for the future”. Perhaps Netanyahu was listening: speaking to the Jewish Agency, he affirmed that “we need to make peace from the bottom up, rather than the top down, by improving the lives of Palestinians so that they have a stake in peace”.

“Economy first” is therefore not new but rather a tried and tested distractionor – at best – an exhausted, well-intentioned failure. Of course, the deceptive appeal of the economic focus is that it purports to offer vital jobs for an impoverished Palestinian society. But that is the very colonial logic at its heart; the best the walled-in natives can hope for is a job in an industrial park, policed by privatised contractors, provided their behaviour is sufficiently docile and grateful.

The flaw in prioritising the economy is not only the idea that Palestinians will embrace the latest version of an agri-industrial project as one step on the road to national liberation, but that it fails even by its own standards. As Palestinian prime minister Fayyad put it this week:

Even though I am an economist by profession and I appreciate the importance of the economy very much, the solution is not to be found in money or in industrial zones. I am interested not in redefining the occupation but in ending the occupation.

Oddly, the argument by the likes of Netanyahu and Blair that poverty pushes Palestinians towards “extremism” (albeit without looking at the conditions that created and maintain the poverty) goes against the current Israeli strategy for Gaza, where policies are deliberately intended to destroy the local economy and quality of life.

This seeming contradiction can be understood by the Israeli government’s attitude to Hamas: punish the residents of Gaza and hit hard the group’s interests in the West Bank. The “economy first” strategy, then, is intended for a West Bank dominated by a cooperative Palestinian leadership (made up of technocrats and elements within Fatah) and territorially carved into statelets and industrial zones.

Everyone from NGOs to the World Bank recognises that without tackling ongoing Israeli colonisation and its associated regime of “restrictions” for Palestinians, economic-revival projects are doomed. Thus the Israeli strategy of depoliticising the question of Palestine in favour of a developmental or economic focus could only be embraced by either naïve or knowingly complicit international actors.

In the Financial Times interview, Netanyahu is described as wanting “to see the West Bank divided into a collection of disconnected economic zones with dedicated business projects”. To see, as the FT journalist in question did, such views as running “counter to current Israeli policy” requires quite a leap of faith, and also means ignoring the open intentions of Israeli leaders from Rabin to Olmert to confine Palestinians to “partially self-governing areas”.

Netanyahu is thus speaking very much within the mainstream of Israeli politics and the “peace” discourse of the “international community”, and if by talking more straightforwardly than others he attracts more flak, then perhaps this could serve to highlight the disingenuous futility of strategies currently favoured by both Knesset and Quartet.

First published in the Guardian’s Comment is Free.

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