These last few days,
the term “economic peace” has been used to critique the decision of Secretary of State
John Kerry to invest $4 billion in the West Bank. What is “economic peace” and
why for many activists who wish to see justice in Palestine, is this controversial?
“Economic peace” means that economic stability
and prosperity in the Palestinian territories would be a good vector of political
prosperity. However, what economic peace develops and promotes is the
dependency of the Palestinian Authority on Israel.

The occupation means that the PA has to rely on Israel to establish any political or economic agenda. The PA has no central bank and therefore cannot control the interest rates and inflation or set a competitive currency exchange rate in support of export-led economic growth. Its commitment to the Economic Protocol with Israel means that it cannot independently reduce tariff rates or value Added Taxes. Well-defined property rights, which are a prerequisite for investment, are not present in the West Bank due to the limited jurisdiction of the PA. The PA only controls fiscal policy, notably through reducing public expenditure and increasing tax revenues. Almost everything else is dependent on Israel.
In the reports by the International
Monetary Fund and the World Bank about the economic situation of Palestinians,
the consequences of occupation are never mentioned. Both of these institutions
use technical and neutral vocabulary and do not denounce Israel’s unlawful
policies. Kerry's latest
plans resembles past ones pushed by the United States and international
organizations like the IMF and World Bank. These plans try to normalize
occupation- economic peace, seems to be only another word for status quo.
Even if one takes a neoliberal point of view, economic growth can only occur when there is a production of goods or services. Given that the Palestinians have no control over their production or their goods, Kerry’s plan or any other plan that does not ask for the end of the Israeli occupation is doomed to fail.
Even if one takes a neoliberal point of view, economic growth can only occur when there is a production of goods or services. Given that the Palestinians have no control over their production or their goods, Kerry’s plan or any other plan that does not ask for the end of the Israeli occupation is doomed to fail.
Occupation is
still present because many companies in the United States and worldwide benefit
from it. Kerry should consider supporting peace by promoting the BDS movement
and ending U.S. military aid to Israel. This is an economic plan for Palestine
that will cost less and achieve more. Isn’t that the goal given the current bad
economy?