There is a bitter irony to the White House's newly released economic development plan for the Occupied Palestinian Territory. Titled "Peace to Prosperity," the plan was devised by Jared Kushner, Donald Trump's son-in-law and senior adviser, along with David Freedman, the U.S. ambassador to Israel, and Jason D. Greenblatt, a special envoy for international negotiations. It seeks to raise $50 billion, mostly from Arab countries, around half of which would be used to develop the Palestinian economy, while the rest would go to Palestinians living in Egypt, Jordan, and Lebanon.
But the plan avoids addressing key obstacles to economic development: the closure of Gaza and, in the West Bank, Israeli settlements, which are illegal under international humanitarian law, and a two-tiered discriminatory system that treats Palestinians and the settlers separately and unequally. The lack of economic growth is not just a byproduct of these abuses, but the result of deliberate Israeli policies.
When Israel occupied the West Bank and Gaza in 1967, it cut the territories off from their previous trading partners. In 1968, Moshe Dayan, then the Israeli defense minister, said "[W]e can create economic integration... We should connect the two [Palestinian and Israeli] entities, if we, on our part and for ourselves, do not want to sever connections with these areas." But integration did not connote equality. On the contrary, Israel has continued to expand settlements and further entrench its discriminatory system against Palestinians, even when Israel partly reversed integration after 1994, following the Oslo Accords.
Over the past five decades, Israel has used its control over Palestine's borders, land, and water to build lush residential communities for more than 600,000 Israeli settlers and 19 industrial zones, in violation of the laws of occupation, while severely limiting Palestinians' access to their own natural resources and the permits needed to develop them. In 1987, Ariel Sharon, who was then the industry and trade minister, told the Knesset that his policy is to "strictly examine" requests by Palestinians to build factories, and "comprehensively take into account Israeli industries, the needs of the Israeli market, and the potential for export." He added that the threat of Palestinian competition "mandates the establishment of [Israeli settlement] industry."
As a practical matter, this has meant, for example, that the Israeli government grants its citizens and foreigners permits to build factories in the West Bank on land it has unlawfully seized – often awarding generous subsidies to encourage investment – while systematically denying such permits to Palestinians, even for land they own. This inverts Israel's international law obligations, discriminating against the people for whose benefit the occupying country is required to administer the territories and privileging those whom the laws of occupation prohibit from living there in the first place.
The case of West Bank stone quarries illustrates how Israel's discriminatory restrictions cost the Palestinian economy $241 million annually, according to the World Bank. Israel licenses 11 settlement-operated quarries in the West Bank, which supply around one quarter of its gravel market, despite this exploitation of resources in occupied territory violating international humanitarian law. One of these quarries is owned by Hanson, a subsidiary of Germany-based Heidelberg Cement. Israel's Civil Administration granted the Heidelberg subsidiary a permit to quarry on land that it seized from the Palestinian village of Zawiyeh.
The ease with which these settlement quarries operate contrasts with Israel's virtual ban on issuing Palestinian permits for quarries for the last three decades. Israeli authorities, for example, stopped renewing permits for quarries around Beit Fajar, a town of about 13,500, 10 kilometers south of Bethlehem. In 2010, 80 percent of the town's jobs were in the stone industry spread among 150 stone workshops and 40 quarries. But in recent years, the authorities stopped renewing permits for the few quarries they had allowed to continue operating. Quarry owners who continue to operate often face hefty fines and the confiscation of expensive equipment, in addition to difficulties transporting their product due to delays at the hundreds of checkpoints and road obstacles scattered across the West Bank.
Many Palestinian industries have a similar story. Israeli policies stunt their development, while helping unlawful settlement industries to thrive. According to the World Bank, Israeli restrictions in Area C of the West Bank, the area under exclusive Israeli security control, cost the Palestinian economy $3.4 billion per year.
If the White House wants to bring peace through prosperity, it should press Israel to end its unlawful and discriminatory policies that are helping to strangle the Palestinian economy.