Why Economic Incentives are not Enough for Israel/Palestine

Pieria 16/4/13

There is a tendency to think that there is nothing new under the sun when it comes to the Middle East Peace Process. A new secretary of state but the same old shuttle diplomacy with the stated goals of getting the parties back to the negotiating table. If this was a film, someone somewhere would be charged with copywrite theft.

The ‘Groundhogs’ day phenomenon, however, is mistaken. Though the political situation has remained stagnant, the attitude of the populations has developed over the past twenty years, as have the facts on the ground. Peacemakers are faced with two populations who still agree in principle on the final outcome but who are incredulous on the ability to get there in their lifetime.

The basis of this lack of belief is a legitimate lack of trust both on a people to people level in addition to their leadership. Though the Israelis might at times make the correct noises, the settlements continue to grow. Security cooperation with the Palestinians might be the best they have ever been; yet there has been no preparation of the population for the compromises that will be necessary for a peace deal.

In order to coax the parties back to the table John Kerry and his team have been experimenting with different options. The most reported ‘confidence building measure’ has been a pledge to support the Palestinian economy, continuing the Salam Fayyad, the former Palestinian Prime Minster, paradigm of building Palestine despite the occupation.

Given that these measures have the ability to help the daily lives of Palestinians living in the West Bank, some observers have been surprised at the Palestinian pushback to these incentives.

The reason the Palestinians are not thrilled with a state building effort is due to the Israeli Prime Minister Binyamin Netanyahu’s concept of economic peace. Never a fan of the peace process, Netanyahu has long been the champion of replacing political rights in the West Bank with economic incentives.

While economics are a necessary factor to create a sustainable two-state solution, they are not sufficient. Through Netanyahu’s support for economic measures but opposition to political rights, the economic state building efforts themselves have become unpatriotic within Palestine. As long as it is perceived that the economics come as a replacement, rather then a supplement, to resistance to the occupation – economic incentives will not help bridge the gap to get the parties back to the table.

I was happy therefore to hear John Kerry’s joint press conference with Netanyahu after his recent visit to the region. Kerry opened his remarks stating that he had discussed many different options with Netanyahu including some economic ones. Netanyahu followed stressing that there were some good economic projects that he could support to improve the lives of the Palestinians. Kerry then went off script, and protocol, to put in a final word where he stressed that economic moves are no replacement for the political process. It was a message that he stressed again in his final remarks before he left the region.

Kerry’s early highlighting of this understanding provides a solid grounding for him to mount his effort. With the resignation of Prime Minster Fayyad and the Israelis apparent rejection of the majority of his suggested bridging proposals, a solid footing is about the most he can hope for at this early stage.

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