The Pandemic Depression
The Global Economy Will Never Be the Same
Last May, I resigned from the Israeli government and parliament. I did so largely for reasons of domestic policy, including differences with Prime Minister Benjamin Netanyahu on issues such as respect for the rule of law and the independence of the Supreme Court. National policy toward the Palestinians was not central to my resignation, but it is no secret that I differed on that front as well with some in the government and the Knesset in which I served.
There are voices in Israel that favor a large-scale annexation of the West Bank and Gaza, perhaps even the dismantling of the current “political separation” between the two communities and the extension of Israeli citizenship to current Palestinian Authority (PA) voters. I believe such an approach would be a grave mistake, one that would needlessly imperil Israel’s Jewish and democratic character. Although I do not think the prime minister personally subscribes to these views, the mixed signals from within his government only encourage third parties to pursue problematic policies that harm Israel’s interests. On this issue—Israel’s unshakable commitment to the preservation of the country’s Jewish and democratic character—the government and its ministers should speak with one voice.
On a broader level, many in Israel and beyond remain convinced that the traditional model of the Middle East peace process has come very close to success in recent decades and that with some tweaks or twists, still further efforts along these lines might yield an acceptable outcome—if only both sides would make a few additional concessions. I disagree. The model of change embodied in the Oslo Accords failed, and if tried again, it will fail again. Only a fundamentally different approach to change—call it bottom-up rather than top-down—can end the underlying conflict.
When news first broke about the Oslo Accords, I supported the agreement and the “land for peace” formula on which it was based, because, both then and now, I revere the preservation of life more than the acquisition of land. Like many Israelis, I believed in the idea that territorial concessions might be the key to achieving peace. But over time, I became disillusioned.
Only a fundamentally different approach—call it bottom-up rather than top-down—can end the underlying conflict.
My awakening came after I was appointed the head of Israel’s military intelligence in 1995, shortly before the signing of the Oslo II agreement. In that position, I had the opportunity to see all aspects of Palestinian politics up close. What I learned was shocking—and I learned it not by uncovering secret Palestine Liberation Organization (PLO) decisions but just by following Palestinian media, Palestinian educational curricula, and Palestinian leadership statements. The evidence was overwhelming: rather than preparing the younger generations of his community for a historic reconciliation with Israel, Palestinian leader Yasir Arafat was feeding his people a steady diet of hatred and vitriol toward Israel.
I remember the day I held one of my regular working meetings with Prime Minister Yitzhak Rabin, who served simultaneously as defense minister. In the course of that briefing, I gave him what I called “strategic early warning” that, in my view, the PLO leadership was planning to maintain the conflict against Israel regardless of Arafat’s signature on the White House lawn. Regrettably, more than two decades later, my assessment has not changed. From reading Palestinian schoolbooks, watching Palestinian television, and listening to speeches by Palestinian officials, it is clear that the leadership of the PA still fills the minds of Palestinian youth with talk of Israel as an alien cancer in the Middle East that must be replaced “from the river to the sea.” The vitriol from Gaza—what I call “Hamastan”—is even worse.
So long as the bulk of the Palestinian population remains unwilling to accept the reality of Israel’s permanent existence as a secure Jewish, democratic state, it will be difficult, if not impossible, to have a true peace. Rather than being imposed from the top down, in other words, the desire and the choice for peace have to rise from the bottom up, from the Palestinian people themselves. Until that happens, continued negotiations along traditional lines will never live up to the hopes many place in them. A bottom-up approach lacks the drama and romance of high-level summitry that many in the international community prefer. It demands persistence, hard work, and a focus on details. And it offers little hope for a final resolution of the conflict in the near future. I am convinced, however, that it is the only way to avoid a strategic abyss and the only path to real progress toward eventual peace in the Middle East.
Since the signing of the Oslo Accords just over 23 years ago, the international community—led by the United States—has repeatedly tried to facilitate a final-status agreement that would end the Israeli-Palestinian conflict. Every effort has ended in failure. The conventional wisdom attributes that failure to a lack of willingness by the local parties to make some relatively small concessions. If only this behavior were adjusted or that policy paused, the argument runs, things could have worked out in the past—and might still work out in the future, even absent dramatic movement on either side.
I think this conventional reading of recent history is naive and that the real reason for the failure of negotiations has been Palestinian reluctance to recognize Israel’s right to exist as the nation-state of the Jewish people—in any boundaries. When that reluctance dissipates, peace will be possible; until then, it will not be. Israeli policy, and that of the international community, should thus be focused on trying to help Palestinians realize that the choice for peace lies in their hands.
The conventional wisdom is wrong because it is based on four misconceptions about the nature of the conflict—the first being that the core problem is Israel’s occupation of territories gained in the Six-Day War, and so the key to peace must be an Israeli withdrawal to boundaries close to the pre–June 1967 lines.
In fact, a reluctance to accept Israel has been a consistent feature of Palestinian strategy from even before there was a state of Israel. It was reflected in the Arab rejection of the United Kingdom’s 1937 Peel Commission proposal and the United Nation’s 1947 partition plan, as well as the Palestinians’ rejection of Israeli Prime Minister Ehud Barak’s proposal at Camp David in 2000, U.S. President Bill Clinton’s parameters later that same year, and Israeli Prime Minister Ehud Olmert’s 2008 proposal. Most recently, the current Palestinian leadership continued this policy of rejection by failing even to respond to U.S. President Barack Obama’s call to negotiate on the basis of U.S.-mediated terms in March 2014. Throughout this series of rejections, the Palestinian leadership never stated that any particular Israeli territorial concession, even a full withdrawal to the 1967 lines, would end the conflict and terminate all claims the Palestinians had against the state of Israel.
It is true that the PLO recognized Israel in the Oslo Accords. But recognizing the fact of Israel’s existence is not the same as recognizing its right to exist as the nation-state of the Jewish people. Rabin was aware of this hole in the agreement and refused to proceed with the Oslo signing until he received a side letter from Arafat committing the PLO to change its charter to reflect the recognition of Israel. Yet despite a lot of smoke and mirrors, including maneuvers that duped many in the international community, Arafat never did change the charter. One proof of this is the impossibility of finding any amended charter ever published by the PLO since its alleged removal of the offending articles in 1996: a “cleansed” document simply does not exist.
Arafat’s successor, Mahmoud Abbas, has maintained this policy, repeatedly refusing to accept the idea that the Jewish people have a right to statehood. Some say this is only a tactical maneuver by Abbas, who is described as holding back this card now so that he can play it later in exchange for a major Israeli concession. However, we heard the same about Arafat; it was wishful thinking then, just as it is now. The fact is that when Abbas says, “We will never recognize the Jewishness of the state of Israel,” as he did in November 2014, we should take him at his word.
No Palestinian entity could survive without a close connection to the Israeli economy.
It is true that Israel did not ask for this kind of recognition from Egypt and Jordan when it signed peace treaties with those countries in 1979 and 1994, respectively. But the Israeli-Palestinian conflict—which is, at its heart, a conflict over national identity, not a real estate dispute—is very different from those interstate conflicts. At no time did Egypt or Jordan ever make a claim to “all of Palestine,” as the PLO does. With those two states, peace was achieved with an exchange of territories and the restoration of recognized international borders. Neither Egypt nor Jordan considered the idea of carrying on the conflict with Israel after peace. In contrast, the Palestinians have chosen to resume hostilities against Israel—whether by launching rockets or launching terrorist attacks—precisely from territories they received from Israel. That was the case after both the signing of the Oslo Accords and Israel’s disengagement from Gaza.
There are corollaries to the principle of refusing to recognize Israel as the nation-state of the Jewish people. Palestinian leaders also reject the slogan “two states for two peoples,” because the PLO doesn’t recognize the existence of a Jewish “people.” Its charter states: “Claims of historical or religious ties of Jews with Palestine are incompatible with the facts of history and the true conception of what constitutes statehood. Judaism, being a religion, is not an independent nationality. Nor do Jews constitute a single nation with an identity of its own; they are citizens of the states to which they belong.”
Rejecting Israel as the nation-state of the Jewish people means that the conflict is not about borders but about Israel’s very existence. As strange as it sounds, history has shown that the Palestinians have repeatedly refused to accept statehood and the responsibilities that would go with it—because their chief objective has been not to achieve their own national community but to deny Jews theirs.
Palestinian leaders rejected partition proposals made by the British colonial power and the United Nations before the establishment of Israel, took no steps toward independence when Egypt and Jordan ruled the territory in which the Palestinians lived, and have squandered the opportunity to build the institutions of statehood over the past two decades. With the exception of the two promising years from 2010 to 2012 under the leadership of Prime Minister Salam Fayyad, when the Palestinians began to build the infrastructure of a state, the Palestinians have regrettably preferred to concentrate on harming the state of Israel rather than establishing their own state.
In 2005, for example, Israel withdrew completely from the Gaza Strip, evacuating every Israeli civilian and soldier. The Palestinian leadership in Gaza—which, after 2006, was the Islamic Resistance Movement, or Hamas—had the opportunity to establish a statelike entity, to develop the strip for the benefit of its own people, and to prove to Israel and the international community that the formula “land for peace” really works. Indeed, nothing would have incentivized Israeli withdrawal from the West Bank (which many Israelis call Judea and Samaria) more than the emergence of a peaceful and successful Palestinian-governed entity in Gaza. Sadly, the opposite happened. Hamas turned Gaza into a terrorist base and a rocket-launching pad, in the process destroying the lives of millions of Palestinians.
The second misconception underpinning the conventional wisdom is that Israeli settlements in the territories are a crucial obstacle to peace and that the removal of those settlements would pave the way for a resolution of the conflict. Once again, however, history has shown that this is simply not the case. The persistence of the Arab-Jewish conflict for more than 150 years is not because Jews have settled in a particular part of the land of Israel but because Arabs have rejected the Jewish right to settle anywhere in the land of Israel.
Gaza is a useful test case. If settlements were the main problem blocking peace, then the evacuation of all settlers from Gaza should have improved matters and led to further negotiations. In fact, it produced more terrorism. If there has been any quiet for Israeli communities near the Gaza border in the last two years, it is only because the punishment inflicted on Hamas by the Israel Defense Forces in Operation Protective Edge in 2014 has temporarily deterred it from launching further attacks.
The existence of Israeli settlements in the territories has never prevented the Israelis and the Palestinians from negotiating with each other or even reaching agreements. Since 1993, Israel and the PLO have reached numerous political, economic, and technical accords, even as Israeli governments—left, right, and center—continued investing in settlements in the territories.
Since 1967, no government of Israel, across the political spectrum, has questioned the legality of Jewish settlement in territories won during the war. Governments have taken different views on whether to build certain settlements, but all have recognized the fundamental right of Jews to live in the West Bank. (Of course, settlement activities must always be done lawfully, solely with the endorsement of the government of Israel. No government can turn a blind eye to illegal action and should use the tools of the state to prevent violations and correct them if they occur.) Even so, as part of the political process in the Oslo Accords, the government of Israel made a major concession by committing itself to negotiate the issue of settlements with the Palestinians.
Some argue that this commitment was disingenuous, given that the expansion of settlements prevents the establishment of a Palestinian state. However, the total combined land area of Israeli settlements in the West Bank is less than ten percent of the territory—hardly so much as to prevent the emergence of a Palestinian state. And although the Obama administration unilaterally renounced Washington’s commitment to an April 2004 agreement between U.S. President George W. Bush and Israeli Prime Minister Ariel Sharon on settlement activity, the government of Israel has kept its part of that deal. Specifically, Israel has limited its construction in the West Bank to areas within the geographic boundaries of existing settlements in such a way as to allow for the natural growth of those communities.
Regrettably, for internal political reasons, the Israeli government has been shy about publicly affirming its continued commitment to this policy—a commitment that it has kept despite Washington’s breaking its end of the deal. Israel should be clear about its policy, in the hope that the new administration in Washington might return to a more realistic approach to the issue of settlements and their connection to the broader dispute between Israel and the Palestinians.
The third misconception underlying the conventional approach to the peace process is that until a diplomatic agreement resolving the conflict is reached, separation between the Israelis and the Palestinians is the best way to keep things peaceful and tranquil. Separation appeals to the idea that Israelis should not be captive to the Palestinian refusal to make peace, that they can be masters of their own fate. It also feeds on a certain paternalistic notion that if the Palestinians aren’t going to be responsible actors, the Israelis will have to be responsible for both parties. But a close examination shows that this is a mirage. Full separation now would be a disaster—most of all for the Palestinians.
No Palestinian entity could survive, for example, without a close connection to the Israeli economy. The center of gravity of the Palestinian economy is not Ramallah; it is Tel Aviv. About 100,000 Palestinians are employed inside pre-1967 Israel, both legally and in the gray economy. Another 60,000 are employed inside the West Bank in the settlements and in Israeli industrial zones. Thousands more are employed in the territories by Palestinian subcontractors of Israeli enterprises. More than 80 percent of Palestinian exports go to the Israeli market. Full separation between Israel and the Palestinians would trigger an economic and humanitarian crisis in the West Bank that would threaten the PA and pose a significant security risk to both Israel and Jordan.
Moreover, separating the Palestinians’ critical infrastructure from Israel would lead immediately to a massive crisis. Even with Israel’s disengagement from Gaza, Gazans still rely for their survival on Israeli-supplied water and electricity. For the Palestinians in the West Bank, the level of dependence is even greater. For Israel even to consider a policy that would deprive Palestinians of the basic necessities of life is inhumane and unthinkable. In theory, the Palestinians have the ability to develop their own desalination plants, power stations, and other infrastructural needs. But they have had this ability since the signing of the Oslo Accords, and, despite generous international funding, none of this has happened. It would be the victory of hope over experience to believe this situation would change in the event that Israel separated from the territories.
As for security, the limitations that would accompany full separation on the current freedom of the Israeli army and other Israeli agencies to operate in the territories would deprive Israel of assets needed to fight terrorism. But the most immediate impact of separation in the security realm would be on the survival of the PA.
From the implementation of the Oslo Accords in 1994 until Operation Defensive Shield in 2002, Israeli security forces did not operate in Area A in the West Bank, those urban areas defined by Israeli-Palestinian agreement as under full Palestinian security control. When Palestinians launched a wave of suicide bombings against Israeli cities in 2000, in what became known as “the second intifada,” or “al Aqsa intifada,” most of the perpetrators came from Area A. To suppress the uprising and bring an end to the terrorist attacks, Israel changed its rules of engagement and began operating throughout all of the West Bank, which has remained the case ever since. Without this freedom of action, Israel has high confidence that it would again be faced with the kind of violence and terrorism of 2000–2002.
Any attempt by the new administration in Washington to plow the old furrows is destined to fail.
But terrorist organizations do not focus their energies only against Israel. Hamas, Palestinian Islamic Jihad, and the Islamic State (also known as ISIS) also view the PA and its ruling party, Fatah, as enemies. The resulting convergence of interests between Israel and the PA in fighting Palestinian terrorism is the basis for the security coordination between Israel and Palestinian security institutions. Such cooperation, originally enshrined in the Oslo II agreement, has become essential to PA security; although Palestinians do their part, the fact is that Israeli security forces are responsible for the majority of counterterrorism activities in the West Bank. Without Israeli military and security activity, the PA would collapse and Hamas would take control.
Of course, not all aspects of separation are bad for Israel and the Palestinians. Political separation, for example, serves the interests of both sides. Indeed, it is the one positive outcome of the Oslo process. Thanks to the agreements, the Palestinians enjoy substantial political independence, voting for their own parliament, president, and municipalities. This also benefits Israel, whose Jewish and democratic character would be threatened if Palestinians in the West Bank had no option but to vote within the Israeli political system. (On their own, the Palestinians decided to maintain two political entities—one ruled by Hamas, the other by the pa—but this was a Palestinian choice, not one imposed on them by Israel.)
Those of us who believe in political separation recognize that there needs to be an eventual agreement between the parties regarding the status of the territory in the West Bank—part of which will be under Palestinian sovereignty and part of which will be under Israeli sovereignty. This issue should be negotiated and resolved between the two sides, when the circumstances are ripe for agreement on critical and sensitive issues. In the meantime, pursuing other forms of separation would only worsen the situation.
The fourth misconception embodied in the conventional approach, finally, is that the Israeli-Palestinian conflict drives conflict in the Middle East more generally and thus that regional stability depends on the conflict’s resolution. No idea has done more damage to the modern Middle East than this false concept of linkage. For decades, it has freed Arab leaders from responsibility to their own peoples and has given Palestinians a stranglehold on the political fate of other, unrelated communities.
The reality is that the region’s chronic instability was caused by the mistakes made by colonial powers a century ago in forcing a Western-inspired nation-state model on a local patchwork of competing religious, ethnic, and tribal loyalties. For decades, the region’s dictators and autocrats were happy to resist change while hiding their sins behind the cover of the Israeli-Palestinian conflict, but the chaos spreading through the region over the last five years has given the game away. Nobody can say with a straight face that the civil war in Syria, the sectarian strife in Iraq, the tribal conflict in Libya, the state collapse in Yemen, or the revolution and counterrevolution in Egypt have anything to do with Israel or the Palestinians, so this canard might finally have been put to rest. (The irony is that, in its own modest way, Israel has played an important role over the years in support of regional stability, steadying the situation along its borders and maintaining security in the West Bank.)
Together, these misconceptions have yielded a fundamental misunderstanding of the nature of the Israeli-Palestinian conflict, the steps that need to be taken to solve it, and the consequences of alternative courses of action. A stubborn myth persists about how a final settlement of the conflict is almost within reach; everyone supposedly knows what it looks like and believes that the only thing required to get there is to press both parties for a few more concessions that would push the negotiations across the finish line.
But people have been kidding themselves. The gap between the two sides is not about a few square kilometers on a map, several dozen Israeli communities in the West Bank, or a few billion dollars in international funds to develop the Palestinian state. Sadly, it is more profound than that, and much more impervious to resolution.
Israel has no interest in governing Palestinians who are not already Israeli citizens and should do everything in its power to continue the process of political separation. But there is little chance of reaching a negotiated solution to the other aspects of the conflict in the foreseeable future, until Palestinian attitudes evolve. Nor is full separation an acceptable alternative: it would consign millions of Palestinians to a terrible plight and create yet another failed political entity in the region (perhaps two, if Gaza and the West Bank stay divided).
So what is to be done? I favor a policy of bottom-up change and incremental progress, trying to build a durable structure of peace on solid foundations rather than sand. If Israelis proceed with determination and persistence, without rosy illusions or wishful thinking, we can improve the situation for both the Palestinians and ourselves and make real progress more likely down the road.
The first component of such an approach would be the promotion of Palestinian economic growth and infrastructure development. More Palestinian workers should be allowed into industrial zones and settlements in the West Bank, and more Israeli-Palestinian joint ventures should be encouraged. More Palestinian industrial zones should be developed, and Israeli natural gas should be delivered to the West Bank and Gaza. A Palestinian power station should be constructed near Jenin, the capacity of the power station in Gaza should be increased, and there should be a solar field installed adjacent to the Gaza Strip. There should be a desalination facility built in Gaza, and the agricultural sector should be promoted across the territories. And the success of Rawabi, the new planned city, should be replicated in other regions of the West Bank.
At the same time, Israel should do what it can—both directly and by enabling the efforts of others—to help improve Palestinian governance, anticorruption efforts, and institution building in general. At all times, however, Israel should be mindful to avoid patronizing the Palestinians; it is not Israel’s business to impose its way of governing on the PA or to choose leaders for it; rather, the goal is to provide opportunities for the Palestinians to determine their own future.
All of this should be done against the backdrop of Israeli-Palestinian security cooperation under the heading of “One authority, one law, one weapon.” This means that the pa, with Israel, needs to work to prevent the emergence of any independent armed groups and to maintain a monopoly on the use of force in the areas under its control. Within this framework, Israel should do everything in its power to train Palestinian police and security personnel to meet the PA’s daunting security challenges. As long as it is necessary, however, Israel will need to retain its current freedom of operation for its own military and security forces throughout the West Bank.
Such a bottom-up approach should have a diplomatic component as well, ideally a regional initiative that would bring in Arab states interested in helping to manage and eventually solve the Israeli-Palestinian conflict—whether or not those states have formal relations with Israel.
Over time, these efforts could lay the groundwork for a true peace rooted in mutual recognition and responsible cooperation. The specific shape of plausible final settlements will become clear eventually, but only after both the Israelis and the Palestinians have learned to accept and work with each other over years of gradual, incremental development. The Palestinians can, should, and eventually will have their own political entity, but at least for the foreseeable future, it will lack certain attributes of full sovereignty, such as armed forces. Rabin put the matter well in the last speech he gave to the Knesset, presenting the Oslo II agreement for approval just a month before his tragic assassination:
We view the permanent solution [of the conflict] in the framework of the State of Israel, which will include most of the area of the Land of Israel as it was under the rule of the British Mandate, and alongside it a Palestinian entity which will be a home to most of the Palestinian residents living in the Gaza Strip and the West Bank. We would like this to be an entity which is less than a state and which will independently run the lives of the Palestinians under its authority. The borders of the State of Israel, during the permanent solution, will be beyond the lines which existed before the Six Day War. We will not return to the 4 June 1967 lines.
He went on to call for preserving a “united Jerusalem . . . under Israeli sovereignty,” establishing Israel’s “security border” in the Jordan Valley, and extending Israeli sovereignty to include large blocs of Jewish settlements across the Green Line, all of which continue to make sense today.
Achieving even this result will take patience, persistence, and years of practical effort. But it offers the chance for a real peace somewhere down the road, something that the conventional top-down approach will never produce. Any attempt by the new administration in Washington to plow the old furrows once again is destined to fail, just as such attempts by its predecessors did—with the costs borne by the local communities that will find themselves trapped in still more violence and misery, still further from the peace they deserve and may one day be able to share.