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Why the US ‘workshop’ for Palestinians will fail

Jun 04,2019 - Last updated at Jun 04,2019

Twenty-five years ago, I moderated a discussion on the Palestinian economy at the international economic summit in Casablanca, Morocco. I was there in my capacity as co-chair of Builders for Peace (BfP), a project created by vice president Al Gore to help grow the Palestinian economy in support of the Oslo process.

I learned a great deal at the Casablanca summit and in my more than three years with BfP. It is from that vantage point that I want to comment on the Trump administration’s proposal for an economic “workshop” in Bahrain.

In short, I believe this effort will fail, not because the Palestinians will not participate, but because of the reasons why Palestinians will not participate. They know that without sovereignty and independence they cannot grow their economy. The Trump team would have been well advised to learn this lesson from past attempts to grow the Palestinian economy while still under occupation.

I first saw this lesson play out in Casablanca. When we arrived in January 1994, we found the atmosphere to be quite heady. In addition to the top echelon of the Clinton administration, there was a BfP-led US delegation of business leaders; Arab government officials and investors were there in full force; as were the Israelis, who were demonstrably excited to be welcomed, for the first time, in an Arab capital.

The Palestinian leadership who went to Casablanca were optimistic about their prospects for achieving a Palestinian state within the five-year window projected by Oslo. They were, therefore, eager to begin building their state and securing the investment needed to create the businesses and jobs that would enable them to develop an independent economy.

During the first decades of the Israeli occupation, Palestinians lost access to much of their water and arable land, were divided from one another by a harsh occupation regime, and were cut off from the outside world. As a result, the territories had undergone a process of de-development, becoming increasingly dependent on the Israelis, who saw it as a captive market. Palestinian businesses, where they existed, could only access the outside world if they used an Israeli middleman. And the single largest source of employment for Palestinians were low-paying, often humiliating, day-labour jobs in Israel.

Our efforts were encouraged by a World Bank study that found the Palestinian economy would take off with investment and access to external markets. To that end, the US had already pledged $150 million a year for five years to support the Palestinians, with other nations following suit.

My panel featured three Palestinian economic ministers, who laid out what they felt was needed to help them grow. At the end of the session, I was approached by an American, who asked for an introduction to the Palestinian ministers because he had just been awarded a USAID grant for around $10 million to help train Palestinians in entrepreneurial skills. When I relayed his request to the Palestinians, they were furious. One said to me: “No one consulted us as to what we needed. Our people do not need to be trained on how to do business. We need capital to be invested in our small business sector and the freedom to do business.” I experienced this same frustration, with supply-driven instead of demand-driven aid, throughout my tenure at BfP.

In our first year, we brought two delegations of American business leaders to meet with Palestinians to discuss investment and partnership possibilities. The projects that were hatched during our first visit were ultimately aborted when the Americans realised it was impossible to import raw materials and export finished products without securing either an Israeli partner, which added unacceptable costs, or Israeli permission, which was not forthcoming. As I expressed then: “We had the horses at the gate, but the gate never opened.”

Even US government efforts were blocked. On one occasion, I fielded a call from a Department of Agriculture official; the department had shipped bulbs to Gaza’s farmers in order to assist them in developing an export capacity. He reported to me that the bulbs had been sitting in the port for months and had rotted because the Israelis would not let them in.

What we discovered, in part after then secretary of commerce Ron Brown convened a discussion with Israeli and Palestinian business leaders, was that the Israelis simply did not want the competition that might result from the emergence of an independent Palestinian small business sector. The occupied territories represented but a small percentage of the Israeli GDP, but the Israelis did not want to give up their economic control.

I accompanied Brown to another meeting to hear the concerns of Palestinian business leaders, held in East Jerusalem’s Ambassador Hotel. Part way through his opening remarks, many Palestinians began to leave. Brown turned to me and asked whether it was something he had said that caused this exodus. I left the room and met a number of those who had departed. They showed me that their travel permits only allowed them to cross the checkpoints and come into Jerusalem for three hours. They were afraid that if they overstayed, they would be denied future permits.

In 1995, a second summit was convened in Amman, Jordan. However, Palestinians were not there because Israel had instituted a closure of the West Bank and Gaza, fearing retaliation in the wake of a massacre committed by an extremist Israeli settler at the mosque in Hebron.

The Amman summit was a disaster without the Palestinians. It was as if the Palestinians had opened the door to the Arab world for Israelis, who promptly closed the door behind them.

Frustrated by this lockout, I convinced some of our BfP delegation and a few US government representatives to go to occupied Jerusalem to convene a rump session and invite the Palestinians to join us. That night, we, Americans and Israelis, sat for hours waiting for the Palestinians to arrive. A US consular official passed me a note saying, “I bet it’s... Arafat who refused to allow them to attend.” A few minutes later, we received a phone call from the Palestinians. The Israelis were refusing them entry into occupied Jerusalem.

Much has changed in the intervening years, mostly for the worst. West Bank Palestinians have lost more land as settlements and Jewish-only roads have cut the territory into small pieces, Palestinians in “East Jerusalem” are completely severed from the West Bank and Gaza, under Hamas control, is strangled by an Israeli blockade. Given these conditions, the Palestinian economy has deteriorated even further, becoming dependent on external aid to underwrite a swollen public sector or day labour jobs in Israel or illegal Israeli settlements.

Under these circumstances, what the Palestinians need more than anything is freedom from Israeli control and the independence they need to grow their economy. A recent World Bank study says the Palestinians would triple their growth rate if the barriers to free trade were removed.

This said, the attempt to convene an “economic workshop” without first guaranteeing Palestinians freedom and independence is destined for failure. We have been down the road paved with false promises before, and have found it to be a dead end.

 

The writer is president of the Washington-based Arab American Institute

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