Memo to Kerry: It’s not the economy, stupid

The secretary’s ridiculous talk of $4 billion in private investment for the Palestinians demonstrates that the path out of our conflict is not going to be cleared by Washington

David Horovitz

David Horovitz is the founding editor of The Times of Israel. He is the author of "Still Life with Bombers" (2004) and "A Little Too Close to God" (2000), and co-author of "Shalom Friend: The Life and Legacy of Yitzhak Rabin" (1996). He previously edited The Jerusalem Post (2004-2011) and The Jerusalem Report (1998-2004).

Secretary John Kerry with President Shimon Peres and Palestinian Authority President Mahmoud Abbas at the World Economic Forum in Jordan in late May 2013 (photo credit: AP)
Secretary John Kerry with President Shimon Peres and Palestinian Authority President Mahmoud Abbas at the World Economic Forum in Jordan in late May 2013 (photo credit: AP)

On Sunday afternoon, at the World Economic Forum conference on the Jordanian side of the Dead Sea, a group of Israeli and Palestinian businesspeople unveiled an initiative designed to spur progress to an Israeli-Palestinian peace accord.

Hundreds of company bosses were signed up to the “Breaking the Impasse” project, reported its two trailblazers — the Midas of Israeli high-tech, Yossi Vardi, and the Palestinian oil-, gas- and much more besides-billionaire, Munib al-Masri. Later that same day, hundreds of Israeli and Palestinian signatories indeed rose to receive the applause of the two-thousand plus participants at the WEF’s closing plenary session.

Vardi and al-Masri stressed in their presentations that they were not prescribing the specific terms of a peace deal. They were, rather, offering the backing of their respective business communities to chivy the political leaderships toward agreed terms for a Palestinian state established in harmony alongside Israel.

Vardi, typically, was earnest and passionate, his remarks reflecting a sense that both sides were to blame for past failure; al-Masri, again typically, was more acerbic and blinkered, barely acknowledging Israeli suffering through our joint decades of bloody history. But the bottom line was identical: a plea for political courage. “Enough is enough,” they both said in their separate remarks to a well-attended press conference. Put aside the bitterness, the wariness and the cynicism. Knuckle down. Make peace.

And the caveat was shared, too: This was emphatically not a case of the Israeli and Palestinian business communities, despairing of their respective political leaderships, declaring that they henceforth would shoulder the burden and lead their peoples to normalization. This was not a case of trying to make economics work where diplomacy has failed. As Vardi put it, it was up to the political leaders, not the business community, “to make the painful compromises.” As al-Masri echoed, this was not some kind of “economic peace” initiative. The Palestinians want their own country. They want independence. A booming economy, working well with the Israelis next door, would be great too. But it’s not the economy, stupid. It’s the sovereignty.

In the course of the day, I was told by various insiders that US Secretary of State John Kerry was well aware of the initiative and its details. At some point, there was talk of a sit-down being planned between the secretary and the would-be impasse breakers.

That didn’t happen. And later on Sunday evening, in the penultimate speech of the WEF event, Kerry — a veteran of four Middle East shuttle missions in his less than four months in office — unveiled the fruits of his diplomatic labors. No, he hadn’t cut a peace deal — though he ad-libbed a fairly dumb joke about having an agreement with him if the previous speakers, Shimon Peres and Mahmoud Abbas, were minded to sign it. No, he hadn’t prodded the Israelis and Palestinians back to the negotiating table. In fact, no, he hadn’t even managed to arrange a meet between Abbas and Prime Minister Benjamin Netanyahu.

So what magic had he wrought? What did he have to present to us all? An economic plan. Bigger and better and bolder and brighter than anything hitherto attempted for the Palestinians.

What? Foreheads furrowed. Fingers went to clean out eardrums. Were we hearing this right? The secretary was proposing a financially driven path to Israeli-Palestinian peace and happiness? Was he kidding?

As the audience took cover, the secretary let loose salvos of statistics: This could boost the Palestinian economy by 50% in three years. Agricultural production would triple. Tourism, too. One hundred thousand new homes would rise. Unemployment would fall by two-thirds. Wages would increase by 40%. “Is this a fantasy?” he wondered aloud. Well, duh. But, no, Kerry preempted, “I don’t think so, because there are already great examples of investment and entrepreneurship that are working in the West Bank. We know it can be done…”

How? What? Who? Where? The answer to all such questions, it seemed, was: Tony Blair. The indefatigable former British prime minister, shaking hands with those sheikhs at the side of the hall, he was going to fix it. Somehow, Tony the economic tiger was going to rustle up the necessary $4 billion in investment and — presto! — all our problems would be solved.

Last time we looked, the admirable Blair had been the Middle East Quartet’s representative in these parts since June 2007. If there was $4 billion to be had in private investment in the Palestinian economy, you can rest assured that Tony Blair would have found it. An irredeemable optimist, Blair has placed much emphasis on reviving the West Bank economy, to give the Palestinians a sense of stake in maintaining security and stability, as a vital, integral factor in diplomatic progress. But not, it ought not to require stressing, as the key catalyst of a political process. Not, that is, as the centerpiece of what the lame US secretary will from now have to carry around as the Kerry Plan.

Potential private investment is out there. And it can certainly flow into the Palestinian territories. But it will only flow — as opposed to trickle — after the conditions are created for long-term stability, not as the means to create those conditions. Twenty years ago, before the Oslo process had been doomed by Yasser Arafat’s duplicity, private investment did flow into Gaza; expat Palestinians, evidently believing that everybody’s troubles were coming to an end, began building apartment blocs in the Strip. Then came the suicide bombings of the early-to-mid 1990s, Arafat’s immovable anti-peace stance at Camp David 2000, the strategic use of terrorism he fostered in the Second Intifada, and the Hamas takeover of the Strip after Israel’s unilateral withdrawal in 2005. Even Blair’s compelling mix of charisma, passion, smarts and optimism couldn’t pry sizable outlays from anybody for Hamas-run Gaza now.

And investment in the West Bank today, though ongoing, is necessarily cautious and prudent — as befits the radical instability of the wider region, the potential for chaos extending to the West Bank, and ongoing local crises such as the recent ousting by Abbas of the single most credible figure for would-be West Bank investors, prime minister Salam Fayyad.

Before he took office, Kerry was touted as a secretary of state who truly believed he might succeed where his predecessors had failed, in brokering Israeli-Palestinian peace — and never mind the discouraging context: a weak PA president who failed to confront the false Arafat narrative that denies Jewish sovereign roots here; a region in free fall where the Hamas takeover in Gaza and the bloodshed on the Syrian side of the Golan constitute spectacular disincentives to relinquish territory; and a battered Israeli public who saw Ehud Olmert’s unsurpassable peace offer brushed aside by Abbas in 2008 and now have a settler-sympathetic prime minister, with a heavy settler element in his coalition, who is in no mood to repeat it.

As the businesspeople who fashioned “Breaking the Impasse” correctly recognized, the path to an accord requires compromise and pragmatism by the politicians. It requires a Palestinian leader like the English-speaking Abbas, who told Channel 2 last year that there would be no third intifada under his leadership, that he had no demands on pre-1967 Israel, and that he felt he had no “right” to return to live in Safed, the town of his birth in today’s northern Israel. It does not require a Palestinian leader like the Arabic-speaking Abbas, who went to the UN last November seeking statehood without the inconvenience of negotiating modalities with Israel, told the watching world Israel was born in fundamental sin through ethnic cleansing, and who, at the Dead Sea on Sunday, delivered a speech made all the more unpalatable and extreme by the plaintive call for peace from the business community that preceded it.

In the Abbas account of the conflict as detailed on Sunday, Israel’s refusal to simply up and leave from the West Bank is plain incomprehensible. After all, he argued, the Palestinians have never and would never harm so much as a hair on an Israeli’s head.

Why on earth, he wondered — this picture of bafflement, this elderly, well-intentioned gentleman, rendered impotent by the stupidity of those aggressors on the other side of that inexplicably constructed wall — would Israelis be wary of what might happen were they to pull out of the West Bank? What harm might possibly befall them? The Second Intifada? Obviously a figment of Israel’s imagination. The no-nonsense ousting of Abbas from Gaza by Hamas, with its acutely worrying implications for a post-IDF West Bank? Presumably never happened.

Israel in 1999 threw out Netanyahu because it believed there was a peace deal to be made with Arafat, and that the intransigent prime minister was missing the chance. There was no such sentiment when Israelis voted four months ago — no sense that opportunities for peace were going begging because of obdurate, settlement-building Netanyahu. Arafat shattered Israelis’ confidence in their Palestinian negotiating partners. Abbas has signally failed to restore it. And the collapse of stability in the Middle East is working against all those who seek to heal the rift.

Absurd rhetoric about billions in private investment is not going to change any of that. What it does, however, is make a fool of the secretary of state who utters it, and make plain that salvation from the Israeli-Palestinian conflict, rarely more elusive than today, is not going to come from Washington, DC.

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