What Comes After the War in Gaza?
America, Israel, and the world can't afford to repeat the mistakes of previous efforts to help the Palestinians.
All eyes are focused on Gaza at the moment, whether on the hostages, Israeli military operations, or Palestinian casualties. But the war between Israel and Hamas will end, and the critical question of what comes next will loom.
It is already clear from White House pronouncements that there will be a strong push to default to past solutions, to once again begin a “process” towards “peace.” But historically, the much-ballyhooed peace process has been more process than peace. How will this next interregnum break the cycle?
In theory, a new round of efforts to pacify the Israeli-Palestinian conflict will from the outset be different, as Israel insists that Hamas will be eradicated. Hamas, in its turn, has sought to radicalize the Palestinian cause, sidelining any advocates for peace with the Jewish state as traitors.
Before any massive peace confab can take place, there will be a global effort to help rebuild Gaza. The Israeli national unity government has already declared that post-war Gaza will be completely disconnected from the State of Israel, open only to Egypt should the Egyptian government be amenable. In this scenario, there will be no more basic goods transfers, no more trade, no more work visas for Palestinians in Gaza, and effectively a closed border with Israel.
This situation will offer a critical opportunity to the international aid complex: How can any new assistance be channeled to the Palestinian people, and not their kleptocratic leaders? And an even harder question: Can there be a new model for aiding Palestinians that avoids creating another donor-dependent, public sector-heavy basketcase that simply replicates every effort of the last half century? In this respect, Gaza will be a test case.
To diagnose the problem and avoid repeating past mistakes, understanding the history of aid to the Palestinians is vital. Most western aid flows to both Gaza and the West Bank began after Israel’s conquest of these territories in 1967. Prior to the Six Day War, assistance to Palestinians largely went through the United Nations. Bilateral aid flows to Egypt (sovereign over Gaza) and Jordan (sovereign over the West Bank) were less significant.
For the United States, the bulk of assistance began to flow after the 1993 Oslo Accords and the recognition by the Palestine Liberation Organization of Israel’s right to live in peace and security. Since 1994, America has given more than $5 billion to the West Bank and Gaza, with more than $6 billion given to underwrite UNWRA since 1950. These are not small sums, and taken in conjunction with even more lavish assistance programs from the European Union and literal suitcases full of cash from Arab donors like Qatar, it’s no surprise that the Palestinian people have been, per capita, among the largest recipients of aid in the world.
Fat lot of good it’s done them.
Indeed, a flood of cash notwithstanding, the chart below tells the story: Israel has gone from economic success to success as a vaunted start-up nation; Palestinian GDP remains forever flat.
But why?
Learning from past mistakes
Most assistance programs from the United States were neither malign nor intrinsically ill conceived. They failed, however, to achieve their intended goals. Dramatic improvement in life expectancy, GDP per capita, infant mortality, and unemployment after 1968 (under Israeli sovereignty) began to decline precipitously in the 1990s—ironically after the Oslo Accords. Between 1992 and 1996, real per capita GDP declined 36.1 percent in the West Bank and Gaza. As a result of a series of terrorist attacks and subsequent Israeli closures, money that once came in from Palestinians working in Israel (more than 20 percent of the West Bank and Gaza population at one time) declined sharply. Combined with sky-high birthrates, economic mismanagement, and unreliable support from the Arab world, the result was persistent unemployment and rising poverty.
The bulk of current U.S. assistance focuses on security cooperation, humanitarian assistance and hospitals, with some portions going to “youth empowerment” and “democracy and governance.” Legal constraints on supporting UNWRA will also likely increase in the wake of yet more revelations that it provides direct and indirect support to Hamas. Doubtless, the patchwork of terrorism-related restrictions make it difficult to effectively administer aid programs, with their continuity also a serious challenge. But no such restrictions exist for the European Union, which has provided more than €4 billion to both the West Bank and Gaza since 2014 alone.
These assistance programs all contribute incrementally to achieving various specific goals—paying salaries, security cooperation, humanitarian aid, incremental economic reforms, better sewage systems. However, too few are directed towards governance, accountability, or institution building. Because of this governance gap, the sum total of assistance provided to the Palestinians achieves much less than it should. And while there should be little doubt that underwriting security—critical to a continued productive, cooperative relationship with Israel—and addressing basic needs are both imperative, better governance and lasting institutions are actually the secret sauce of building towards peace.
The West Bank and Gaza are two different kettles of fish when it comes to governance. Both are disasters in different ways. For its part, the West Bank economy is skewed by dependence on Israel and by the necessary emphasis on security. But those two factors have become crutches: the West Bank under the Palestinian Authority has essentially devolved into a typical Arab-style rump dictatorship replete with absentee jobs, absentee ministers, and rampant corruption.
There was a brief moment of sunshine when the technocrat Salam Fayyad rose to the premiership in Ramallah, PA headquarters, with the warm support of the United States. Fayyad was uninterested in amassing either wealth or power for himself, and his tenure did usher in a brief moment of reform and institution building.
But Fayyad’s term in office reflected another weakness of U.S. policy towards the Palestinians. Like Yasser Arafat and Mahmoud Abbas, Fayyad was just one guy. And while that sounds like foolish reductionism, the problem with so much of U.S. policy in this arena is in fact Washington’s dependence on “the guy.” Though Fayyad represented a break from Arafat’s preening autocracy or Abbas’s incompetent and increasingly impotent kleptocracy, there was no reason to assume that his reforms would take hold since they lacked any roots, any foundation in Palestinian society. And of course, they did not deal with the systemic problem of co-dependence on Israel and vulnerability to terrorism.
A better way forward
In the midst of a vicious war that continues to claim lives of Israelis and Palestinians alike, it may seem off-point to raise the question of what comes next. Unsurprisingly, technocratic policy options aren’t at the heart of the current conversations about the state of play between Israel and the Palestinians. But they must be. There will be a vacuum in Gaza that cannot be filled by Hamas or any Iranian proxy. A peacekeeping force of the kind being mooted by the Biden administration and European Union is only a stop gap. If the governance vacuum is then filled by the existing Palestinian Authority, the future is almost assured. Before this war, Hamas and its Iranian overlords were working assiduously to both radicalize West Bank Palestinians and undermine what is left of the Fatah party at the heart of the PA.
Ultimately, what makes sense is to extend the PA to Gaza as it was before the Hamas takeover in 2007. But which PA?
The PA as currently constituted is a non-starter. It is broken, both weak and corrupt. It must be fixed. But how? Some (including Fayyad himself) insist that a Palestinian state is the sine qua non for necessary reforms. But there is no real persuasive case for that; the accoutrements of a state do not in and of themselves deliver legitimacy, or institutions, or security. Were the Israelis absent entirely from all Palestinian territory in the West Bank and Gaza, as most Palestinian groups insist, a huge source of Palestinian income would be lost, as would any semblance of internal security. Gaza under Hamas had already turned into a mini-Iran, and there are reasons to believe the West Bank wouldn’t be far behind should the Israelis pull back.
There have been any number of peace process-related efforts to internationalize, bilateral-ize, and mutilateral-ize the stewardship of peace negotiations. But there have been almost no serious efforts to articulate the shape of a better future for Palestine and its people. What should aid be for beyond better sewers and better security forces? What should Palestinian government truly look like?
In a dream world, it would mirror Israel’s own start-up nation. Years of conflict and terrible choices have chipped away at the once prevalent Palestinian reputation as a nation of managers. Prior to the First Gulf War and the PLO’s ill-advised decision to side with Saddam Hussein over his victims in Kuwait, you couldn’t find a Gulf business without Palestinians at the managerial level. They were the accountants, the mid-level leadership, the backbone of Arab business. That they no longer occupy this space is self-evident. But can this skill set not be revived, nurtured and made central to any rethink about Palestinian governance?
What is required to move forward in this direction is a Western pact that prioritizes governance and institutions, that identifies and then backs a new generation of Palestinian leaders that are interested in serving the interests of their people and not Iran or homegrown fanatics. Zero effort has gone into trying to find worthy successors to Abbas; it cannot simply be another “guy.” There must be a bench of technocratic and capable Palestinians to serve as the foundations of a new Palestinian Authority, projects, backed by teams of technical experts from Europe and the United States (and not from the politically, intellectually, and morally bankrupt United Nations) who can help set up real ministries, new education systems, and productive economic programs that can sustain growth. Absent such an effort, it will be the status quo ante, with war and respite, war and respite.
The war begun by Hamas on October 7 was so heinous in its violence, and Israel’s retaliation so devastating, it is difficult to think about any aspect of the ongoing conflict as an opportunity. But the reality is that for the first time in a very long time, the Palestinian people will have a shot at something resembling a fresh start. The United States and Europe can jettison years of failure and begin work on the foundations of a better Palestinian governing authority that could, if successful, lead to a stable and prosperous state of Palestine, or they can lazily return to the fruitless machinations of the peace process.
Now is the time to decide—and to plan.
Danielle Pletka is a senior fellow at American Enterprise Institute and cohost (with Marc Thiessen) of the podcast What the Hell is Going On and its related Substack here.
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