Last week, before meeting with Israeli President Shimon Peres, U.S. Secretary of State John Kerry pronounced Israel’s prosperity an impediment to “peace” with the Palestinians. “I think there is an opportunity [for peace], but for many reasons it’s not on the tips of everyone’s tongue. People in Israel aren’t waking up every day and wondering if tomorrow there will be peace because there is a sense of security and a sense of accomplishment and of prosperity.”
He appears to have meant that if Israel is stable, educated, prosperous, free and democratic, these accomplishments have somehow made Israelis feel that peace is not important, not a pressing matter, because, after all, life is pretty good right now.
If that is so, however — if Israel would place a higher priority on “peace” if it were struggling economically or felt its security to be precarious — what is one to make of Mr. Kerry’s announced determination to raise $4.2 billion in private investment for the West Bank with the aim of increasing Palestinian GDP by 50%, cutting its unemployment by 66% and just about doubling median Palestinian income? Wouldn’t such economic benefits make the Palestinians less interested in “peace”? Wouldn’t that give them a “sense of security and a sense of accomplishment and of prosperity” that would make them self-satisfied?
Or is that true only of Jews?
Secretary Kerry appears to have forgotten one general point about investment, and one specific point about the Palestinians.
Generally, in the real world, investment flows organically to places that have an educated population, security, and rule of law that protects intellectual property and the repatriation of profits. It flows, for example, to Israel. Countries or areas with corrupt financial practices, a dictatorial, bifurcated government, multiple security services and an education system that is heavy on ideology and the veneration of violence get less.
Palestinian poverty is not a plague or an earthquake; it is intimately related to Palestinian government policy. Palestinian leadership is at war with the country best able to employ its people – Israel. And Israel does, in fact, periodically employ a great many of them. Kerry promised that his plan would be “bigger, bolder and more ambitious” than anything since the Oslo Accords, so a quick review of post-Oslo Palestinian economics shows that open warfare against Israel is the best predictor of Palestinian economic difficulty. The Oslo timeline, from an article I published in 2012, includes:
- 1992: 115,600 Palestinian workers entered Israel every day.
- 1996: A devastating series of bus bombings, including a particularly gruesome nail bomb in the center of Tel Aviv killed more than 100 Israelis. Palestinian workers in Israel were temporarily reduced to 63,000.
- September 1995-September 2002: Despite the interruption in 1996, Palestinian unemployment decreased from 18.2% to 11%. In mid-2000, 136,000 were working inside Israel — 40% of all employed Palestinians. Another 5,000 worked in the joint Israeli/Arab run Erez Industrial Zone in the Gaza Strip. Thousands more worked in the West Bank and the Gaza Strip in Israeli-owned businesses.
- September 30, 2000: Arafat launched the so-called “second intifada.” Begun at the peak of Palestinian economic integration with Israel, the terrorist war killed more than 1,000 Israelis and wounded more than 5,600 (comparable U.S. figures would be 40,000 and 224,000). The number of Palestinians working in Israel was reduced within six months to 55,000. The Erez Industrial Zone was closed after 11 Israelis were killed there.
- 2005: There was no impediment to independent Palestinian economic activity at the time Israel removed its presence from the Gaza Strip. The Palestinian news agency Ma’an waxed ecstatic about economic opportunities, particularly the acquisition of greenhouses and agricultural equipment the Israelis were leaving behind in a $14-million deal brokered by then-World Bank President James Wolfenson.
- 2006: Palestinian looters destroyed the greenhouses almost immediately, and by early 2006, the greenhouses and the $100 million in annual exports to Europe they had produced were gone.
- 2007: Hamas took control of Gaza after a brief and brutal war with Fatah and then escalated the rocket war that had begun in 2001. After more than 9,000 increasingly long-range and accurate rockets and missiles, Israel launched Operation Cast Lead in 2008/09.
- 2009: Israel and Egypt instituted the security blockade of Gaza, which the UN has acknowledged to be a legitimate security measure.
Given its history, there is no reason for Mr. Kerry to believe Palestinian leadership is suddenly more interested in economic advancement for its people than in continued warfare against Israel. The Palestinian Authority itself announced Sunday that it will not be “bribed” into recognition of Israel as a legitimate, permanent part of the region. “The Palestinian leadership will not offer political concessions in exchange for economic benefits,” Mohammad Mustafa, president of the Palestine Investment Fund economic adviser to Mahmud Abbas wrote in a statement.
If Secretary Kerry thinks that economic dislocation and threats beyond its borders will make Israel cede territory and security to a Palestinian Authority that adamantly places warfare above a settlement and the economic growth that such a settlement could produce, he misunderstands both Israel and the Palestinians.
