Twenty-five years ago, I moderated the panel 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 still-fledgling Oslo peace process.
I learned a great deal both at the Casablanca Summit and in my more than three years with BfP and it is from that vantage point that I want to comment on the Trump Administration’s proposal to sponsor an economic “workshop” in Bahrain.
In short, I believe this effort will fail, not because the Palestinians won’t participate. It will fail because of the reason why Palestinians won’t participate. They know that without sovereignty and independence they cannot grow their economy. The Trump team would have been well advised to learn from – and not ignore – this lesson that Palestinians could have taught them.
I first saw this lesson play out in Casablanca. When we arrived there, in January of 1994, we found the atmosphere to be quite heady. Government and business from around the world were there. In addition to the top echelon of the Clinton Administration, BfP had brought a delegation of American business leaders. Arab governments 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 capitol. At times, it became almost comical to watch Israeli businessmen spotting an Arab in a thobe and then run up to them to have a picture taken to send home.
The Palestinian leadership were there and were feeling optimistic about their prospects for achieving a Palestinian state within the five-year window projected by Oslo. They were, therefore, eager to begin building the structures of their state and securing the investment needed to create businesses and jobs that would enable them to develop an independent economy.
During the first decades of the Israeli occupation, Palestinians had lost access to much of their water and arable land, been cut off from one another by a harsh occupation regime, and had also been cut off from the outside world. As a result, the territories had undergone a process of de-development and had become increasingly dependent on the Israelis. Israeli businesses dumped products in what had become for them a captive market. Palestinian businesses, where they existed, could only have access to the outside world if they traded through an Israeli middleman. And the single largest source of employment for Palestinians were low-paying, often humiliating, day-labor jobs in Israel.
Our efforts were encouraged by a World Bank study which argued that with investment and access to external markets the Palestinian economy was ready to take off. 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 ministers – all with economic portfolios – who laid out in some detail what they felt was needed to help them grow. At the end of the session, I was approached by a young American, who asked excitedly if I would introduce him to the Palestinian ministers. He told me that 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 don’t need to be trained on how to do business. We need capital to be invested in our small business sector and we need the freedom to do business.” I experienced variations of 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 American side realized that they could not freely 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 it 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 troubled call from an official at the Department of Agriculture. They had appropriated funds to ship 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. The Israelis wouldn’t let them in.
What we discovered, in part after then Secretary of Commerce Ron Brown convened a roundtable discussion with Israeli and Palestinian government and business leaders, was that the Israelis simply didn’t want the competition that might result from the emergence of an independent Palestinian small business sector. The Israelis were more interested in protecting their small businesses, than they were in seeing the Palestinians grow and become independent.
Brown was even forced to tackle the Israelis resistance to surrendering to Palestinians the franchises that Israelis had secured allowing them to market American products in the West Bank and Gaza. These areas represented but a small percentage of the Israeli GDP – but the Israelis didn’t want to give up their economic control.
I accompanied Brown on another visit where we convened a meeting to hear the concerns of Palestinian business leaders. The meeting was held in East Jerusalem’s Ambassador Hotel (before Congress bowed to Israeli pressure and barred US officials from meeting Palestinians in Jerusalem). 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 their travel permits that had been granted by the Israeli occupation authorities allowing them to cross the checkpoints and come into Jerusalem. The permits were for a three-hour visit. Because these Palestinians were mostly from Ramallah or Hebron and because of the long lines at the checkpoints – entering and exiting – they were afraid that if they missed the deadline for returning they would be denied future travel permits.
A year and a half after Casablanca, a second summit was convened in Amman, Jordan. One important component was missing from the 1995 gathering – Palestinians weren’t there. Israel had instituted a closure of the West Bank and Gaza – in the wake of a massacre committed by an extremist Israeli settler at the mosque in Hebron. Then Prime Minister Rabin, fearing Palestinian retaliation, closed the territories and banned travel.
The Amman Summit was a disaster without the Palestinians. It was, as I remarked at the time, as if the Palestinians had opened the door to the Arab World, the Israelis had entered, and then promptly closed the door behind them.
Frustrated by this lock out, I convinced some of our BfP delegation and a few US government representatives to go to Jerusalem to convene a rump session and invite the Palestinians to join us. The night of the meeting, 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 damned Arafat who refused to allow them to attend.” A few minutes later we received a phone call from the Palestinians. They had been stopped at a checkpoint and the Israelis were refusing to allow them to enter. Even after we put an Israeli cabinet minister and a US official on the phone, the occupation authorities refused to budge.
Much has changed in the intervening years, mostly for the worst. West Bank Palestinians have lost more land and settlements and Jewish-only roads have cut the territory into small pieces; Palestinians, in what is called “East Jerusalem,” have been completely severed from the West Bank; and Gaza, under the control of Hamas, is being 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 labor jobs in Israel or in 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 that 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 that Palestinians will have freedom and independence – is destined for failure. We’ve been down the road paved with false promises before and have found it to be a dead end. Because freedom isn’t being discussed and Palestinians see no commitment to independence on the horizon – the US summit in Bahrain will be a nice show but it won’t make a difference. As the old adage goes “you can’t put the cart before the horse” – it just won’t go.