U.S. Opens Debate on Mideast Economic Plan

The Trump administration sought on Wednesday to win support for an economic plan it says will be a foundation for Israeli-Palestinian peace but which Palestinians and many other Arabs dismiss as pointless without a political solution to the decades-old conflict.

President Donald Trump’s senior adviser and son-in-law Jared Kushner opened a international meeting in Bahrain on Tuesday evening by urging 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.

International Monetary Fund managing director, Christine Lagarde, told the first panel session that the Fund’s experience in conflict-riven countries around the world showed it can be a struggle to generate economic growth in such an environment.

Neither the Israeli nor Palestinian governments are attending the event. Prime Minister Binyamin Netanyahu, a close Trump ally, said Israel was open to the proposal.

In Gaza on Tuesday, the Islamist group Hamas and its rival Fatah, the movement of Chairman Mahmoud Abbas, convened a gathering of leaders and activists in a rare show of unity to voice their rejection of the Manama conference.

Although U.S. 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 they want to encourage closer ties to Israelis – with whom they share a common foe in Shiite Iran – that have largely been under the table, said David Makovsky, a U.S.-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.

Washington hopes wealthy Gulf oil producers will bankroll the plan, which expects donor nations and investors to contribute $50 billion to Palestinian and neighboring Arab state economies.

Saudi minister of state Mohammed Al-Sheikh told the panel that Kushner’s plan was bolstered by 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.

The IMF says unemployment stands at 30% in the West Bank and 50% in Gaza, the economy of which has suffered years of blockades as well as recent foreign aid cuts and sanctions by the Palestinian Authority, Hamas’s rival.

Among the 179 proposed infrastructure and business projects is a $5 billion 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 materialize anytime soon,” Makovsky said.