No breakthroughs likely after Bahrain conference, despite US optimism

The remarks of the IMF’s Lagarde, who attended the Bahrain conference, appear to be at odds with Kushner’s economy-first approach.
Sunday 30/06/2019
Challenging task. White House senior adviser Jared Kushner speaks during US-sponsored Middle East economic conference in Manama, June 25. (AFP)
Challenging task. White House senior adviser Jared Kushner speaks during US-sponsored Middle East economic conference in Manama, June 25. (AFP)

LONDON - White House adviser Jared Kushner hailed the US-sponsored conference held in Bahrain on the economic aspects of a Middle East peace deal as a “tremendous success” but observers said that no breakthroughs — whether political or economic — are expected in securing a deal between the Israelis and Palestinians.

The conference was attended by government officials from seven Arab countries: Bahrain, Saudi Arabia, the United Arab Emirates, Qatar, Egypt, Jordan and Morocco. The Palestinian Authority boycotted the workshop.

“After extensive review, people were very positive about [the economic plan] and considered it achievable,” Kushner told Asharq Al-Awsat newspaper.

Kushner’s proposal envisions the creation of an international investment fund of $50 billion, half of which would go to the Palestinian territories, while the other half would be divided among Egypt, Jordan and Lebanon over ten years.

The economic plan is meant to be coupled with a political deal, which Washington has yet to unveil, but US officials suggested that would be made public after the re-run of the Israeli elections in September.

A political solution is going to be especially difficult to reach under the Trump administration, which appears to have broken from the previous international consensus in favour of Palestinian statehood as the way for a resolution to the Palestinian-Israeli conflict. Arab states reiterated their insistence on the two-state solution as outlined by the Saudi-sponsored Arab peace initiative as the basis for a durable settlement.

Unless the political aspect of the deal, which has been the subject of much regional and international scepticism, receives regional backing, it is hard to see how the economic plan could be implemented.

The United States, which has not announced any funding for the plan, is looking for substantial financial contributions from Gulf countries but it remains unknown how much of that would be forthcoming.

Saudi Finance Minister Mohammed al-Jadaan said while Riyadh would support “whatever brings prosperity to this region,” it was important that such measures are driven by the private sector.

It may prove difficult to attract private investments before securing a peace deal.

“Improving economic conditions and attracting lasting investment to the region depends ultimately on being able to reach a peace agreement,” said Christine Lagarde, managing director of the International Monetary Fund. “Peace, political stability and re-establishment of trust between all the parties involved are essential prerequisites to the success of any economic plan for the region.”

The remarks of Lagarde, who attended the Bahrain conference, appear to be at odds with Kushner’s economy-first approach. EU delegates at the workshop did not seem to see eye to eye with Kushner.

“Many of them feel a bit awkward about the economic part of the American peace plan,” wrote Haaretz correspondent Noa Landau. “As the Americans in Bahrain speak of theoretical investments worth tens of billions of dollars in the Palestinian economy and Palestinian society, European taxpayers are picking up the bulk of the tab for humanitarian projects in the field in the meantime, while the Americans have only been cutting and cutting funding to the Palestinians.”

Palestinian officials and commentators dismissed the notion that the US plan could benefit them financially at a time when, they say, they’re facing economic hardships because of Washington’s policies, including cuts in Palestinian aid and support to Israeli occupation.

“If the US is so concerned about Palestinian well-being, then why did they carry out these punitive measures against us?” said senior Palestine Liberation Organisation official Hanan Ashrawi.

“Some of [the economic projects mentioned in the conference] have been talked about for 25 years now. Why haven’t they materialised? What’s stopping them? The Israeli military occupation. It’s the elephant they left out of the circus when they went to Bahrain,” Sam Bahour, a Palestinian-American business consultant in Ramallah, told The New York Times.

Kushner’s plan drew criticism from former US Ambassador to Israel Dan Shapiro.

“The Trump administration has shut down aid programmes that support every one of the goals in this Palestinian economic plan. It is now pushing others to invest where we have divested. What do you think the response is going to be?” he posted on Twitter.

Israeli Prime Minister Binyamin Netanyahu voiced support for the conference but the Bahrain event did not spark much discussion in Israeli media, even though Israeli journalists and non-government figures attended the workshop.

The attendance of the conference by Israeli nationals was seen by critics and champions of Arab-Israeli ties as a form of “normalisation”. A number of observers, however, said the conference did not really make any new inroads towards normalisation.

“If the Bahrain workshop secures a place in future history books, it will be for exposing the limits of Arab-Israeli rapprochement,” read a report by the International Crisis Group (ICG).

“Israel’s overt acceptance in the region requires it to resolve its conflict with the Palestinians,” the report said.

Speaking to Agence France-Presse, senior ICG analyst Elizabeth Dickinson said: “It would be highly premature to expect anything beyond flirtation without meaningful change on the ground.”

“The Gulf message is actually somewhat clear in my view: Israel could be a useful, stable ally in a volatile region but only if there is an agreement with the Palestinians.”