President Biden: Don't Fall for the Israeli-Palestinian 'Economic Peace' Fallacy | Opinion

In his first meeting with President Joe Biden, Israeli Prime Minister Naftali Bennett successfully pre-empted the Palestinian issue. Days before the summit, he firmly told the New York Times what his approach would be: "Economy, economy, economy." "This government will neither annex nor form a Palestinian state," Bennett told the Times from Israel, where his meeting, and this maneuver in particular, are being portrayed as a triumph.

Bennett is not the first to come up with the idea of focusing on what's often called "economic peace" at the expense of a political solution to the conflict. Former Israeli Prime Minister Benjamin Netanyahu popularized the idea even before returning as Prime Minister in 2009. The "economic peace" concept holds that instead of political resolution, Israel will advance material improvement for Palestinians out of pragmatism, and for Israel's own self-interest in stabilizing the region. And Netanyahu was joined by the Trump Administration, whose long-awaited peace plan, called "Peace to Prosperity," was heavy on prosperity at the expense of politics (and peace).

Indeed, a more accurate term for "economic peace" would be "gaslighting."

One could argue that economic development is a salutary stopgap for periods in which diplomacy remains moribund, rather than a replacement for a future resolution. And yet, both Netanyahu and Bennett have left no doubt that for them, economic development is no bridge to future negotiations, but rather an ideological wall of resistance.

For starters, both Netanyahu and Bennett openly opposed a Palestinian state. From 2015, Netanyahu declared there would be no such state, and from 2017 onward, his party openly supported annexation of the West Bank.

Bennett has been just as clear that economic gains for Palestinians under his administration would not be the opening salvo of diplomacy but its death knell: In the very same interview ahead of his meeting with Biden, Bennett clarified—less ambiguously than most of his predecessors—that he would continue expanding settlements. And he did not wait long to make good on his promise: After returning to Israel on Sunday, his government took a fresh step towards advancing Israeli housing development in a critical zone called E1, which would bisect the contiguity of a future Palestinian state in the West Bank.

Also on Sunday, Minister of Defense Benny Gantz met with the head of the Palestinian Authority, Abu Mazen, the first such meeting in a decade, mainly to discuss economic development along with civil and security affairs. Discussing the meeting, sources close to Bennett told reporters, "There is no diplomatic process with the Palestinians and there will not be."

Biden and Bennett
US President Joe Biden meets with Israeli Prime Minister Naftali Bennett in the Oval Office of the White House in Washington, DC, on August 27, 2021. NICHOLAS KAMM/AFP via Getty Images

Promoting economic development is convenient for Bennett, who wishes to appear forthcoming globally while maintaining the kosher stamp of the Israeli right wing. But economic investment alone will never lead the region out of conflict, for two main reasons. For starters, one of the main causes of Palestinian economic deprivation is politics itself.

This is obvious to anyone taking even a passing look at the situation on the ground. The economy of the Gaza Strip is in shambles not because of any inherent lack but because of the devastations of constantly being at war. Among the core reasons for catastrophic unemployment and economic indicators in Gaza is Israel's near-hermetic ban on laborers entering Israel on security pretexts, despite allowing in roughly 100,000 West Bank laborers through successful vetting, with hardly any security incidents.

Israel's massive export restrictions on Gaza suffocate the sale of agricultural goods to the West Bank and Israel, particularly onions, as noted by Gisha, an NGO advocating freedom of movement and human rights in Gaza.

That policy does not save Israeli lives; it's a political tactic to pressure Hamas (that hasn't worked). Moreover, economic development designed as a substitute for Palestinian independence will perpetuate economic dependence and Israeli political dominance, according to Ibrahim Shikaki, an expert on Palestinian economic issues.

But the real reason economic peace will fail is that it is grounded in rejection of Palestinian independence. And the rejection of Palestinian self-determination rests on the deeper, rotten foundation of denial of Palestinian national identity.

This denial—all too common on the Israeli right—is inherently opposed to a Palestinian state, and the issue of economics is simply orthogonal to it. Just as economic deprivation doesn't cause ethno-national conflicts, economic development cannot resolve them. At best, money can be an exacerbating (or remedial) factor.

When the Israeli and American leaders met, President Biden expressed support for economic opportunities for Palestinians. And indeed, there are plenty of good reasons for Israel to invest in economic development for Palestinians.

Perpetuating the occupation by denying the Palestinian identity is not one of them. And sadly, that is the reason Israel's Prime Minister is pushing it.

Dahlia Scheindlin is a political strategist and a public opinion expert; she is also a policy fellow at The Century Foundation.

The views in this article are the writer's own.