Commentary Magazine


Obama Embraces Bibi’s “Economic Peace”

The cycle of Western involvement in the peace process usually involves Benjamin Netanyahu proposing an idea, the West rejecting it, trying and failing its own way, and then quietly proposing Netanyahu’s idea while pretending they came up with it. It was certainly that way with the concept of a peace deal built around a land-swap–which Netanyahu proposed in his first premiership during the Clinton administration only to have Clinton ignore him. The land-swap idea eventually became central to final-status negotiations.

The Obama administration may be about to repeat the pattern with regard to Netanyahu’s commonsense–and therefore much maligned–“economic peace.” The concept centers on the fact that since the two sides have not been able to make much progress on the traditional negotiating track, steps could be taken to go around official channels and improve the daily lives of Palestinians. Netanyahu hadn’t received any help from the Obama administration or the government of Mahmoud Abbas to take such action, so he reached out to the Jordanians and worked to encourage foreign investment in the West Bank on his own. It wasn’t just a theory, either; as Daniel Doron wrote in 2011, the concept of “economic peace” is the only strategy with a proven track record of success:

For the first 20 years of its occupation of the West Bank and Gaza—from the 1967 war to the 1987 intifada—Israel generally followed a laissez-faire economic policy in the territories. It kept open bridges with Jordan and did not interfere in Palestinians’ internal affairs. Israel’s maintenance of law and order facilitated rapid economic growth, and its introduction of technical innovations revolutionized Palestinian farming. Crowds of Israelis ate and shopped in Arab towns and markets. During this time, the real income of Palestinians nearly quadrupled. Enhanced wealth created social mobility, loosening the grip of clan and family. Education levels rose, and so did health levels. Palestinian women were the greatest beneficiaries of these changes.

There were remarkably few terrorist attacks during this period. The few that happened were mostly perpetrated by Palestine Liberation Organization (PLO) hirelings. Not that the Palestinians were enamored of Israeli occupation: No one likes an occupation. But, realizing the economic benefits it had brought them, many Palestinians found the occupation a lesser evil than oppressive Jordanian and Egyptian rule.

The first intifada brought an end to the goodwill, and the Oslo process empowered Yasir Arafat. The terrorist Arafat needed Palestinian misery to justify his transformation of the Palestinian polity in his image, and so he wasted no time bringing about such misery.

The Oslo process put an end to the hopes of the actual Palestinian moderates by ludicrously applying the label to the murderous Arafat and his henchmen. Israel’s repeated attempts to make peace with Arafat’s thugs were met with a second intifada destined to be more violent than the first. That’s the legacy of those who shunned economic peace in favor of symbolic and pound-foolish handshaking ceremonies in front of the cameras.

Though Netanyahu’s penchant for historical lecturing irks those who think he’s talking down to them, perhaps what really bothers them is that they prefer their mythmaking not be undercut by the historical record. Even those who favored then, and who still favor now, the discredited Oslo strategy should at least be willing to admit the obvious humanitarian appeal of “economic peace” initiatives. But when Netanyahu first announced this track, Fadle Naqib, then director of the Palestine Economic Policy Research Institute, told Bitterlemons that it “contains an element of racism.” That is, Palestinian economic professionals rejected proposals to improve the Palestinian economy and the quality of life of Palestinians in the West Bank on the basis that suggestions that Palestinians may want the living standards enjoyed by their neighbors was nothing more than cultural bias.

But Netanyahu has always understood that such attitudes go a long way toward making real peace impossible. When the New York Times Magazine recently published a cover article calling for a new intifada against Israel, it focused on a village leader in Nabi Saleh who has a no-show job from the Palestinian Authority and uses his free time to agitate against Israel. Anyone who thinks such a system of governance can foster an atmosphere of peace is delusional.

If the offer of improved living standards bothered people like Naqib when they came from Netanyahu, just imagine how furious they are going to be when they read today’s Wall Street Journal:

The Obama administration is mapping out an economic strategy in the Palestinian areas of the West Bank, using both U.S. government funds and private-sector involvement, in a bid to restart direct peace talks between Israel and the Palestinians….

The Obama administration is betting that economic improvements will encourage Palestinians to view peace talks positively. It plans to pair the investment with a focus on allowing greater freedom of movement by Palestinians throughout the West Bank and an easing of Israeli restrictions on business.

Obama may not like Netanyahu’s history lessons, but it does appear the president is finally listening.

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