FIVE TAKEAWAYS FROM TRUMP’S ‘PEACE TO PROSPERITY’ PALESTINIAN PLAN
The document, on the White House website, is a “new vision for the Palestinian people and broader Middle East.”
BY SETH J. FRANTZMAN. JUNE 25, 2019. Jerusalem Post.
The
long-awaited roll-out of the Trump administration’s new approach to the
Palestinians began this week with the release
of the ‘Peace to Prosperity’ economic plan.
The document, on the White House website, is a “new vision for the Palestinian
people and broader Middle East.
US Special Envoy Jason Greenblatt
said that it has the “potential to achieve incredible results” with more than
$50 billion in investment over ten years which would double the GDP of the
Palestinian areas and create 1 million jobs.
The plan itself is
laid out in a 38-page document that can be downloaded online. On June 25 and 26
a US delegation is discussing it in Bahrain with countries from the Middle
East.
Among US officials present will be Treasury Secretary Steven Mnuchin,
Assistants to the president Jared Kushner and Greenblatt, and Brian Hook who is
an advisor on Iran and other policies.
Structure of the plan and the current
situation
The plan is divided into three parts; unleashing economic potential, empowering
the Palestinian people and enhancing Palestinian governance.
Each section is around ten pages long, which makes them appear equal in importance. Overall the three
sections and divided into sub-sections where a total of fifty different topics
are covered, from educational access to property rights and roads and rail
connections. In this, the plan appears exhaustive.
Immediately what is striking is that much of the plan, which looks more like a
brochure or a snazzy business concept, is generalizations. Key words, such as
“unleash, empower and enhance” are used to spotlight different parts of the
concept. The plan is supposed to open a new chapter in Palestinian history “one
defined, not by adversity and loss, but by freedom and dignity.”
The plan envisions that capital raised
in support of the concept will be placed into a new fund “administered by an
established multilateral development bank.”
Basically it sounds like replacing existing models of funding for the
Palestinians, such as UNRWA, with a new
fund whose leadership will be from the “beneficiary countries” which will
implement projects and give grants.
The plan appears to have two main goals in ten years: Double the GDP of the
Palestinians and create 1 million jobs. The World Bank says that GDP of the
West Bank and Gaza is $14.5 billion. It actually doubled since 2009 when it was
estimated at $7.2 billion, according to the World Bank. So it already doubled
in the last ten years.
The Palestinian GDP is larger than Somalia and South Sudan but smaller than
Afghanistan. GDP per capita is around $2,200 in Ramallah while it is more than
$35,000 in Israel and $4,000 in Jordan.
A UN report in 2017 from the conference on Trade and Development said that
“fifty years of occupation have driven the Palestinian economy into
de-development and poverty.” Agricultural output shrank by 11 percent and
unemployment was almost 30 percent. Gaza’s real per capita GDP shrank by 23
percent since 1994. Studies show that debt as a percent of GDP is growing in
the PA and private spending will decrease.
A European External Action Service strategy document on supporting the
Palestinians, which looked at goals for 2017-2020, said that the Palestinian
economic situation is bleak and declining.
International aid to Palestinians already helps provide the economy some help,
even though the US has cut aid under the Trump administration. According to a
report at Middle East Eye the Palestinians received around $2.2 billion a year
or $560 per capita, making them some of the “top recipients of non-military per
capita aid in the world.”
From 2012 to 2016 the Palestinian Authority sponged up more than $4 billion in
aid. This is the situation the US walks into with this report. Trying to
increase employment is a major challenge considering unemployment rates are
thought to be around 30% and up to 50% in Gaza.
The International Labour Organization claimed the Palestinians in the West Bank
and Gaza had among the world’s highest unemployment.
A Palestinian Central Bureau of Statistics report in August 2018 said that the
number of Palestinians in the work force was 1.3 million, with 820,000 of those
in the West Bank. There are an estimated 4.5 million Palestinians in the West
Bank and Gaza, with 1.7 million of them in Gaza. It seems that creating a
million jobs over ten years is what would be necessary anyway as younger
Palestinians reach their twenties.
Around 45% of Palestinians are under age 18 and UNICEF said that 51% of Gazans
were under age 18 in 2012. The rapidly expanding demographic needs jobs.
Grants: Reinventing the wheel or putting
a Trump brand on Palestinian issues
The plan envisions $3.75 billion in grants for a plethora of projects.
This includes grants for startups and grants for new cargo terminals and roads
at border crossings, as well as upgrading the Gaza power plant. The grants in
the program appear to cover a wide range of necessary items for the
Palestinians.
There is funding for a Palestinian university and hospitals. It also relates to
governance, such as a land registry and using new online tools for
e-governance. Tourism receives around $700 million in grants with another $2.25
billion in concessional financing. These grants and financing are termed
“breakout ventures” in the report and each have an overview.
For instance in the tourism section the plan notes: “To fully develop the
Palestinian tourism industry, new investments are needed to improve
accommodations and attractions close to popular tourist sites.” Another section
foresees $30 million in career counseling grants.
“As part of promoting the adoption of a comprehensive strategy to advance
economic opportunities for women, this project will support the development of
a central institution to facilitate career counseling.”
What is interesting about the plan is that in some of these cases there were
existing models of supporting Palestinian civil society or women careers.
The US is reinventing the wheel in this respect with several targeted grants.
It is unclear, for instance, why a new system needs to be put in place to
re-discover the fact that the “Palestinian health care system requires better
medical facilities to enhance treatment capabilities.”
One might ask why, after decades and billions plowed into the Palestinian
sector from countries around the world, that basic infrastructure such as the
power plant, universities, health care and a land registry were ossified and in
need of so much assistance.
The Trump administration appears to approach the Palestinian issue the way
Trump approached real estate investment, whether it was Trump Tower or Atlantic
city, or other projects. Some of this isn’t exactly reinventing the wheel, but
putting the Trump brand on it. So here appears to be a Trump brand for grand
giving. There is no doubt that these grants target issues of national
importance.
A question might be raised about why these sectors are lagging behind and the
problems they face may not just be about throwing financing at them.
Elephant in the room: Israel
The prosperity plan appears to be
presented in a vacuum in which Israel’s role is hidden from view. For
instance when the plan speaks about “unleashing” the economic potential of the
Palestinians, it says that what is needed is to develop contract rights, the
rule of law and reduce trade barriers.
There is an Israeli elephant sitting astride the trade barrier and the rule of
law issue. The Palestinian Authority is a series of enclaves in Area A and B.
The plan
discusses issues such as “enable Palestinian high-speed data services,” but
Israel only lifted a ban on 3G for Palestinian mobile services in 2018.
The plan compares the Palestinian model to various countries such as Germany
and Sweden, and cities to Singapore and Dubai. But the struggles that Gaza and
Ramallah face are not similar to these areas. Wouldn’t a better comparison be
to places like Amman, Erbil or Srinagar?
There’s a kind of catch-22 inside the prosperity plan. For instance one section
notes that Palestinian businesses tend to be small and medium sized
enterprises.
This is partly due to the constraints Palestinians live under. The plan
mentions that “the Palestinian people routinely encounter logistical challenges
in the West Bank and Gaza,” but doesn’t mention what that challenge is. It says
economic growth is being stagnated by this.
“Palestinian goods and people must be able to easily and securely move across
borders.” Isn’t the address for this problem in Jerusalem as opposed to Ramallah?
It is Israel that controls the movements of goods and people. The project wants
to upgrade the border crossings and provide access roads.
This is important, but once again these areas are controlled by Israel. In
areas where Palestinians sought to build access roads, such as developing
Rawabi in the West Bank, they ran into problems from Israeli bureaucracy. So
the hurdle is not just about money, it is about Israel and the need to get
Israel on board for this plan.
The plan actually says that Palestinians need to develop 4G and 5G
telecommunications. But there is no mention of the role that Israel has had in
impeding this.
It’s as if the plan was designed for a Palestinian economy that exists in an
imaginary universe or on the moon, without a realistic discussion of the fact
that many aspects of the Palestinian economy are linked to Israel, and in many
cases that has widespread ramifications for the Palestinians.
Even if the US wants to reinvent the way in which the funding for the
Palestinians takes place, and even if it wants to escape the preconceptions of
the past, including the way some countries and organizations have basically
worked against Israel in their efforts, it still requires that Israel support
this plan.
Reading some parts of the plan make it clear that Israel either didn’t have
much of a say, was not consulted, or that the authors were not familiar with
some of the role Israel has played in places like borders or
telecommunications.
It may be that the plan was created to provide a kind of fait accompli to
both Ramallah and Jerusalem, or as an idea, but the devil has always been in
the details when it comes to these kinds of issues. Whether it is the Road Map
or Oslo or other aspects of the “peace process,” the hurdle has always been in
implementation and expectations.
This plan seeks to reduce expectations on the political front, but even on the
economic front it appears to ignore the elephant in the room.
Plan reveals challenges facing
Palestinians
The plan’s main insight is in mapping the huge number of hurdles the
Palestinians face today. For instance, from agriculture to housing, the
brochure spells out each problem that exists in the West Bank and Gaza.
These are major challenges. Some of them also lack clarity. For instance the
plan says that Palestinian areas have natural resources, such as “stone,
marble, hydrocarbons and other minerals.” This sounds resource-poor actually.
Are there hydrocarbons in the West Bank?
The plan also envisions the Palestinian areas linked to regional trade and
tourism. This would be ideal but the road ahead is long.
“Regional integration and cooperation have the potential to create significant
new economic opportunities for the Palestinian people,” the report says.
This compares the area too. Dubai and Singapore which it says have benefited
from their strategic locations.
The West Bank and Gaza, the plan says, will be encouraged to link construction
and roads to “facilitate trade and transportation across the West Bank and
Gaza, Jordan, Egypt, Israel and Lebanon.” Airports, seaports and natural gas
trading hubs will emerge.
What’s next?
This plan, like so many before it, has a lot of generalizations and hopeful
words. Its sentiments may be right, but the
question will be if this is a realistic model that the US and its allies will
actually invest in or if this is just a nice-looking brochure.
Some parts of the plan appear more generalization than substance. It is
hampered by ignoring the political realities.
This is part of its goal, to focus purely on the economy and prosperity. But
the Palestinian leadership has rejected it, understanding that it seeks to go
around the leadership and focus only on prosperity without a political end
game.
In some ways it seeks to draw parallels to Singapore or the Baltic states or
Dubai as models. But if Singapore was still part of Malaysia or the Baltic
states part of Russia or Dubai controlled not by the UAE but by some foreign
power, would these countries be what they are today?
These countries had a political horizon and then an economic success story, not
the other way around. There is an essential problem in proposing a massive
economic package without consultation on the ground.
I used to lecture at a Palestinian university and I wonder what my former
students would think of this. They were young professionals, the kind of people
pictures in the plan who the plan seeks to help.
But if you don’t consult them and ask what they want, then how can you help
them? Give a person a fish and you feed them for a day, teach them to fish and
you give them food for a lifetime, the saying goes. But what if you don’t even
bother to ask him if he wants to fish or has a pond to fish in? Then all you’ve
done is thrown a rod at him and left.
“How will it work without Palestinian leaders,” a former student asked me.
Indeed, that’s the question those in Bahrain should also ask.