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Economic carrot to end the conflict must be accompanied by political stick to end the occupation

The stage setting was as good as it gets; they hardly come bigger. US Secretary of State John Kerry chose the backdrop of the Davos conference of the World Economic Forum for the Middle East and North Africa to unveil his economic plan for Palestinian recovery. Clearly choreographed to impress public opinion he announced a plan to pour $4 billion into the West Bank over the next three years.


This gesture impressed very few Palestinians. They have been hearing such things since the Madrid process began in 1991. Besides, more than any amount of foreign money, what they need most is a political solution to the conflict with Israel that will secure their national rights. The elephant in the room was the Gaza Strip, whose Palestinian citizens can expect no US support, financial or otherwise. This suggests that, in American eyes at least, a future independent Palestine will be a statelet built on what remains of the West Bank after Israel has taken as much land as it wants for its illegal settlements.

The broad headline from Palestinian President Mahmoud Abbas's camp was a rejection of the Kerry carrot if it is not accompanied by a political stick to end the occupation. This much was confirmed by the PLO/PA chief negotiator Dr Saeb Erekat to the London-based Al Quds Al Arabi newspaper.

Of course there was every reason not to take Kerry's plan at face value. He has failed to convince the Israeli government led by Benjamin Netanyahu to meet three Palestinian demands in order to restart negotiations: an end to settlement construction; recognition of the June 1967 borders for the future Palestinian state; and the release of Palestinian prisoners from Israeli jails.

For all its ambitions the plan, thus far, is laden with hyperbole and generalities; specifics are scarce. According to the Americans the $4 billion will cut Palestinian unemployment from 22 per cent to 8 per cent and increase production by 50 per cent; medium range income will also go up by 40 per cent in addition to there being a good environment for investment. Again, the figures do not take Gaza's 1.7 million Palestinians into account.

Surely, it doesn't take much to figure out that none of these would be attainable without addressing the key long-term constraints blocking the emergence of a strong economy, namely the loss of Palestinian natural resources, land and water to the Israeli occupation and illegal settlements.

Last year, the United Nations Conference on Trade and Development (UNCTAD) reported that the Palestinian economy has lost access to 40 per cent of West Bank land, 82 per cent of its ground water and more than two-thirds of its grazing land. In Gaza, which for blatantly political reasons does not qualify for US assistance, half of the cultivable area and 85 per cent of fishery resources are inaccessible because of the Israeli blockade.

Predictably, there was not even a fleeting reference to Jerusalem, which, although part of the West Bank, has been excluded from all economic calculations. With 70 per cent of its indigenous Palestinian population living below the poverty line, inclusion in the Kerry plan would seem the natural and correct thing to have done if help for the people of Palestine was the main objective.

In Jerusalem, the local Palestinian economy has ground to a halt. The situation there epitomises the failure of the economic peace plan espoused by the International Quartet special envoy, Tony Blair. If the current reports that he will administer the Kerry $4 billion plan prove true, we can expect yet another damp squib.

There are other legitimate and well-founded concerns. The Islamic Resistance Movement (Hamas) was especially sceptical over the role of the circle of businessmen around Abbas. Some of them, it pointed out, had not only amassed huge fortunes since Oslo but they also enabled Israel to benefit from the asymmetric economic agreements signed with the Palestinian Authority.

Hamas fears that this latest American plan will only reinforce the occupation and render the Palestinian economy a permanent appendage of Israel's. Tahir Al Nunu, a spokesman for the movement in Gaza, said that there is a real danger that the PA will embark on a trajectory that will reduce the Palestinian issue to being one of humanitarian need rather than a political matter.

After the many broken promises of the last two decades, Palestinians have every right to be dismissive of the Kerry plan. By refusing to address the settlement issue the secretary of state has reinforced the reasons for Palestinian mistrust. They are not alone. The UNCTAD 2012 report states: "A sustained economic growth trajectory can only be attained by lifting the blockade on Gaza, the internal and external closures, and the restrictions on public and private investment, land control and use and natural resource management in Area C."

The focus on economic peace benefiting the few at the expense of the many is a stark reflection of the failure of the political process led by the US and Israel. For Palestinians, the problem remains a political issue first and foremost. As long as the Israeli occupation is in place it is impossible to speak of economic development in any part of the occupied Palestinian territories.

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Asia & AmericasCommentary & AnalysisIsraelMiddle EastPalestineUS
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