Insight
The EU, the US and the Middle East Peace Process: Two-state solution – or dissolution? by Beth Oppenheim and Luigi Scazzieri 11 July 2019
For two and half years, Donald Trump has been promising a ‘deal of the century’ to solve the Israel-Palestine question. Such a comprehensive plan may never see the light of day. But at an ‘economic workshop’ in Bahrain on June 25th-26th, Trump’s son-in-law Jared Kushner unveiled the economic component of the peace plan. The proposals aim to open the West Bank and Gaza to regional and global markets, developing the Palestinian economy and that of neighbouring countries. The US administration claims that within ten years this strategy would double Palestinian GDP. On the face of it, helping to grow the Palestinian economy may seem like a good idea. However, Kushner’s plan is unlikely to gain much traction. Crucially, neither the Israeli government nor the Palestinian Authority (PA) were represented at the workshop. And the EU as well as neighbouring states such as Egypt and Jordan only sent low-level delegations. The administration is vague about where the money would come from: a US official said governments and private investors in the Gulf, Europe and Asia might finance the plan. But few will be willing to put their money into what looks like a half-hearted and risky venture. The fatal flaw is that economic development presupposes a political plan – which is nowhere in sight. None of Kushner’s proposals can work without first knowing how the territories will be controlled, and by whom. His proposal deliberately ignores the realities on the ground. It does not mention the PA, Israel’s occupation of the West Bank or its blockade of Gaza, but rather talks in the abstract about “logistical difficulties”. The Israeli occupation is the primary obstacle to development of the Palestinian economy. In 2013, the World Bank found that restrictions in the Israeli-controlled Area C of the West Bank cost the Palestinian economy $3.4 billion per year, or 35 per cent of GDP in 2011.1 And the blockade of Gaza has left the strip in a permanent humanitarian crisis. In a 2018 report, the World Bank found that lifting the blockade alone could lead to additional cumulative growth in Gaza of 32 per cent by 2025. 1: In 1995, the ‘Oslo II Accord’ agreement divided the West Bank into three areas: A, B and C. Built-up Palestinian areas became areas A and B, and were handed over to Palestinian Authority control (full control in Area A, but shared security control with Israel in Area B). The remaining 61 per cent became Area C, where Israel fully controls civil and security affairs. CER INSIGHT: The EU, the US and the Middle East Peace Process: Two-state solution – or dissolution? 11 July 2019
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