John Kerry’s Palestinian Investment Plan Sidesteps Central Truisms

I suspect that I’m like many of you. I want to believe Israeli-Palestinian peace is coming, that the two sides will soon agree to borders, Palestinian terrorists will stop launching rockets from Gaza, and ultra-right Israelis will abandon dreams of absorbing the West Bank into a “Greater Israel.”

In that spirit, I want to share Secretary of State John Kerry’s hope that $4 billion in private investment for the West Bank and Gaza, and the benefits it could bring to a new Palestine and the wider region, will prove irresistible, prompting Israelis, Palestinians, and maybe even Arab states to launch a new era of peace.

But, reality trumps hope, and here’s reality:

Kerry’s proposal, which he unveiled to the World Economic Forum in Jordan, won’t likely prompt peace because, while fresh and novel, it sidesteps central truisms about the Israeli-Palestinian conflict that stand in the way.

First, the proposal assumes that greater economic opportunity will nourish Palestinian desires for peace and stability. Kerry trumpeted the potential payoff of a $4 billion investment in tourism, construction, light manufacturing, building materials, energy, agriculture, and information and communications technology; a 50 percent rise in Palestinian gross domestic product, or GDP, a two-thirds drop in unemployment, and a 40 percent rise in median annual wages.

“I don’t think that there is any secret about the conditions that are necessary for peace and stability to succeed,” Kerry said. “Those are good governance, security and economic opportunity.”

But the West Bank economy has grown markedly in recent years – with construction booming, tourism expanding, and Ramallah, in particular, dotted with fashionable restaurants and luxury apartments – and that growth nourished no serious demand by Palestinians that their leaders make peace with Israel.

Nor did it stop Palestinian Authority, or PA, President Mahmoud Abbas from forcing out its architect, Prime Minister Salam Fayyad, who resigned in April. Nor did prospects of $4 billion more in investment make Palestinian leaders more amenable to peace, with an Abbas adviser saying, “The Palestinian leadership will not offer political concessions in exchange for economic benefits.”

Moreover, whether the $4 billion will come to pass in the face of continuing Israeli-Palestinian turmoil is an open question. Investment normally follows stability (rather than vice-versa) as investors seek confidence that they’ll earn a nice return on their investment rather than see it die on the altar of political chaos or grassroots violence.

Second, Kerry’s proposal ignores the Palestinian split between the PA, which runs the West Bank, and Hamas, which runs Gaza.

Kerry walked the finest of lines, mentioning both the West Bank and Gaza in the context of investment, but mentioning only Abbas in the context of governance – as if Abbas has the power to shape events in Gaza, which he decidedly hasn’t since Hamas ousted the PA from Gaza in a bloody coup in 2007.

Thus, even if investment works as Kerry hopes, prompting Israelis and Palestinians to make peace, Abbas can deliver only a partial peace from the West Bank, leaving Hamas to continue tormenting Israel from Gaza.

A few summers ago, I traveled to Israel and was among a group that met with PA negotiator Saeb Erekat, who suggested only Israeli intransigence stood in the way of Israeli-Palestinian peace. When I asked him why Hamas, dedicated to Israel’s destruction, would fall in line on a peace deal that PA leaders had negotiated with Israel, he had no answer – and he wouldn’t have one today, either.

Third, Kerry’s proposal (like the peace plans of his predecessors) assumes that – setting aside Hamas – the PA and Israel want peace, and the only thing missing is the right mix of enticements for, and concessions from, each.

Today, however, a skeptical Israeli public views the peace process with a jaundiced eye, recalling how previous Israeli offers of land for peace led not to peace but, instead, to more terror and death.

Nevertheless, the bigger obstacle to peace still resides on the Palestinian side, where neither Abbas nor Yasser Arafat before him ever confessed to average Palestinians that a new Palestine will require both recognition of Israel and compromise on such longstanding demands as a full right of return for refugees.

As recently as May 1, a top PA official who had previously sought to assure Israel in an advertising campaign that “I am your partner,” said on Lebanese TV that “our main enemy, not [just] as Palestinians but as Arabs and Muslims, is Israel and the Israeli occupation.”

When, in late April, a terrorist in the northern West Bank murdered an Israeli father of five while he waited for a bus, a top official with Fatah (the political party of Abbas) called him a “heroic fighter.”

No new investment, of any size, will bring peace if Palestinian leaders continue to stoke Israel hating among their people.

Lawrence J. Haas, former communications director for Vice President Al Gore, is a senior fellow at the American Foreign Policy Council and author of “Sound the Trumpet: The United States and Human Rights Promotion.”


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