Two-day workshop boycotted by Palestinian leadership takes place amid efforts by Washington to drum up $50bn investment.
The Trump administration is seeking support for an economic plan it says will be a foundation for Israeli-Palestinian peace but which Palestinians and many others dismiss as pointless without a political solution.
On Wednesday, as a US-led peace conference was under way in Bahrain, the Palestinian Liberation Organization (PLO) reiterated its rejection of the $50bn plan, saying the proposal’s lack of political vision guarantees its failure.
The statement said the US wanted to sell a “mirage of economic prosperity” which would only perpetuate the Palestinians’ “captivity”.
It accused the White House of using the workshop as cover for Israel’s efforts to achieve normal relations with Arab states and grow its illegal settlements in the occupied West Bank.
At the opening panel session of the Bahrain conference, International Monetary Fund managing director, Christine Lagarde, said that the fund’s experience in conflict-riven countries showed it can be a struggle to generate economic growth in such an environment.
Lagarde told the conference that growth in the West Bank and Gaza had to be “job intensive”.
“It cannot be any kind of growth in the West Bank and Gaza, it needs to be job intensive,” she added, citing agriculture, tourism and construction as sectors that “will absorb a lot of labour”.
A day earlier, White House adviser Jared Kushner – one of the architects of the economic plan – urged Palestinians, whose leadership is boycotting the event, to think outside the “traditional box” for an economic pathway that he said was a precondition for peace.
Neither the Israeli nor Palestinian governments are attending the event.
In Gaza on Tuesday, Hamas and its rival Fatah movement of President Mahmoud Abbas convened a gathering of leaders and activists in a rare show of unity to voice their rejection of the Manama conference.
Hamas chief Ismail Haniyeh criticised Arab states participating in the workshop, which 300 delegates including Israeli and Palestinian businessmen are attending.
The conference aimed to finish off the Palestinian cause under the cover of economic and financial benefits, he said.
“The (Palestinian) people, who have been fighting for one hundred years, did not commission anyone to concede or to bargain. Jerusalem is ours, the land is ours, and everything is ours,” Haniyeh said.
Although US allies Saudi Arabia and the United Arab Emirates discreetly support the plan, several Arab states, such as Lebanon, have stayed away while others including Jordan and Egypt, the two Arab nations that have reached peace with Israel, have sent deputy ministers.
The presence of Sunni Muslim Gulf states in Manama showed some want to encourage closer ties to Israelis – with whom they share a common foe in Shia Iran – that have largely been under the table, said David Makovsky, a US-based Middle East expert attending the event.
“(But) it’s clear they won’t bypass the Palestinians and do anything they don’t want,” he told Reuters news agency.
Washington hopes wealthy Gulf oil producers will bankroll the plan, which expects donor nations and investors to contribute $50bn to Palestinian and neighbouring Arab state economies.
Saudi minister of state Mohammed Al-Sheikh told the panel that Kushner’s plan was bolstered by the inclusion of the private sector as a similar proposal, relying heavily on state funding, had been attempted during the Oslo interim peace deals of the 1990s that eventually collapsed.
“While I accept that peace is essential, back then it was the hope of peace that got them actually excited and moving,” Al-Sheikh said.
But the “economy first” approach toward reviving the moribund peace process could be a hard sell as the political details of the plan, almost two years in the making, remain secret.
On Tuesday, Riyadh reiterated that any peace deal should be based on a Saudi-led Arab peace initiative that calls for a Palestinian state drawn along borders which predate Israel’s capture of territory in the 1967 Middle East war, as well as a capital in East Jerusalem and refugees’ right of return – points rejected by Israel.
Kushner said on Monday the plan would not adhere to the Arab initiative.
It is not clear whether the Trump team plans to abandon the “two-state solution”, which involves the creation of an independent Palestinian state living side-by-side with Israel.
The United Nations and most countries back the two-state solution, which has underpinned every peace plan for decades, but Trump’s team has consistently refused to commit to it.
Any solution must settle long-standing issues such as the status of Jerusalem, mutually agreed borders, Israel’s security concerns, Palestinian demands for statehood, and the fate of Israel’s illegal settlements and military presence in territory where Palestinians want to build that state.
Palestinian leaders are refusing to engage with the White House, accusing it of pro-Israel bias. Breaking with the international consensus, Trump in 2017 recognised Jerusalem as Israel’s capital, infuriating the Palestinians and other Arabs.
Across the great divide
The IMF says unemployment stands at 30 percent in the West Bank and 50 percent in Gaza, the economy of which has suffered from years of Israeli and Egyptian blockades as well as recent foreign aid cuts and sanctions by the Palestinian Authority, Hamas’s rival in the Israeli-occupied West Bank.
Among the 179 proposed infrastructure and business projects is a $5bn transportation corridor to connect the West Bank and Gaza, according to documents reviewed by Reuters.
Some of them have been floated before and stalled for lack of underlying political or security agreements.
“The economic vision has to be linked to resolving the entire conflict, and this doesn’t bring the Israelis and Palestinians any closer together. So I’m not optimistic this plan can materialise anytime soon,” Makovsky said.
Even at a break between sessions in Bahrain, differences between the two sides of the Israeli-Arab divide could be seen.
Israeli businessman Shlomi Fogel was in conversation with a UAE businesswoman. Asked for their views on Kushner’s approach of tackling economic issues first, Shlomi said: “If we wait for the politicians, it will take forever. We could do parts of this economic plan with the right support.”
The Dubai-based businesswoman suggested, however, that the plan was too ambitious to be put into effect anytime soon.
“There were efforts like Oslo that didn’t work out – and that was because of the Israelis,” she said. “You can’t assume the economics will work if the politics don’t move.”