INTO THE FRAY: The Bahrain Conference: Failure Foretold


The endeavor to resolve the Israeli-Palestinian conflict by economic means not only shows a grave defect in understanding its underlying causes, but inverts the causal relationship that generates & sustains it.

The road to hell is paved with good intentions – An aphorism thought to have originated with Saint Bernard of Clairvaux (c. 1150).

When senior representatives of the Trump administration, Jared Kushner and Jason Greenblatt woke up this morning in Israel (May 30, 2019), it was to a totally different political reality to that which they expected to encounter only a few days previously.

New elections instead of new government

Indeed, instead of having to present what is being billed as the “Deal of the Century” for the innovative resolution of the seemingly intractable conflict between Jews and Arabs over control of the Holy Land, to a newly installed government, supported by a firm majority of 65 Knesset members, they are faced with political pandemonium, and new elections in little more than three months’ time.

It is yet too early to determine how the sudden uncertainty, into which the Israeli political system has been plunged, will affect the timetable for the public launch of the “Deal of the Century”, currently scheduled for a June 25-26 conference in the Persian Gulf state of Bahrain. There is, however, every reason to believe that the political developments in Israel will impede, rather than expedite, its unveiling. After all, the whole point of selecting June for the Bahrain conference was the hope that a newly elected Israeli government would be in office, with the legitimate authority to make the necessary decisions regarding the purportedly historic proposal.

Slim chances of success

However, the delay in moving forward with the “Deal of the Century” may well be a fortuitous turn of events. For, if the rumors that have recently appeared in the media are indeed correct, the chances of its success—or even the chance that there will be a realistic attempt to implement it—are slim indeed.

The major reason for this gloomy prognosis is, of course, the obdurate apriori rejection by the Palestinian Authority of any initiative from the Trump administration—irrespective of its substantive content—including “the Deal”.

However, Palestinian rejectionism aside, there are other valid reasons for skepticism.

For, at least in the manner in which it is portrayed in the media, there appear to be substantial structural flaws in “the Deal”, which expose a fundamental misunderstanding not only of the essence of the conflict, but also the basic methodology required for its resolution.

According to statements from the Trump administration, “the Deal” will focus on the formulation of an ambitious economic program for the development of the areas currently under the administration of the Palestinian Authority, but will avoid dealing with the political aspects of the conflict.

And therein lies its greatest defect!

Political economy 101

After all, virtually any basic 101 course in Political Economy begins with an explanation of why all functioning economic systems require a functioning political system for its existence—i.e. a system of governance that can determine, regulate and protect the property rights of buyers and sellers in the market place. Indeed, without such determination, regulation and protection, market transactions would be meaningless—and hence there would be little, indeed, no point in concluding them.

Thus, without specifying who will have sovereign authority to establish the system of laws that stipulate and regulate the legal environment in which the economic enterprises, which the Bahrain conference is supposed to promote, are to function, there is no way to assess their commercial feasibility.

The same is true for the legal regime, under which the array of infrastructures required to provide essential services to these envisaged enterprises, is to operate—such as production and conveyance of electric power, supply of water, sewage treatment, and pollution disposal to name but a few.

Similar questions arise as to taxation—efficacy of tax collection and pervasion of tax evasion—labor laws and welfare payments for workers.

Sovereignty issue unavoidable

All these elements have a crucial impact on the profitability—indeed, the very viability—of the economic vision the Trump administration reportedly intends to present at the conference. Indeed, given the abysmal record—to understate the case—of the Palestinian administration (whether in Gaza or Judea-Samaria) in managing its economic affairs, it is difficult to be optimistic about the future of the economic venture to be presented in Bahrain.

Clearly, the reliability of the infrastructure services, the prevalence of corruption, the cost and productivity of labor will all be radically impacted by the identity of the sovereign, under whose authority the envisioned economic initiative will be built and run. Consequently, no sound, well-informed economic decision can be made without this knowledge.

But the dispute over sovereignty is a quintessential political issue, at the very heart of the conflict and any attempt to skirt or by-pass it is doomed to failure.

Inverting causality

Moreover, the endeavor to resolve the Israeli-Palestinian conflict by means of economic development and financial aid shows not only a grave lacuna in the comprehension of its underlying causes, but in fact inverts the causal relationship that generates and perpetuates it.

After all, the reason for Arab hostility in general, and of the Palestinian-Arabs in particular, is not rooted in economic deprivation. (Indeed, the Palestinian-Arabs have been the recipients of the most generous per capita aid on the planet.) Quite the opposite! The economic deprivation of the Palestinian-Arabs is, in great measure, the result of their anti-Israel hostility, which creates hugely wasteful allocation of resources, grave distortion in their use and facilitates the continued rule of a despotic regime, whose continued hold on the reins of power depends on sustaining the animosity towards the Jewish state.

Accordingly, focusing on the economic aspects alone will not contribute one iota to resolving the conflict or to reducing the Palestinian-Arabs’ enmity against Israel.

At the very most it will transform them from being hostile and poor to being… hostile and affluent. What could possibly go wrong?

Martin Sherman is the founder and executive director of the Israel Institute for Strategic Studies.

May 30, 2019 | 23 Comments »

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  1. Gloves are really coming off now. If the below is true they both(Bibi & Liberman) should be out of the Knesset and in prison.

    Netanyahu’s son says his father appointed an AG to exonerate Liberman in 2009
    Yair Netanyahu appears to make shocking admission on Twitter; Yehuda Weinstein denies ‘nonsense’ claim he was appointed at Yisrael Beytenu chief’s demand

    during the weekly cabinet meeting in Jerusalem, February 14, 2010. (AP Photos/Ronen Zvulun, Pool)

    Prime Minister Benjamin Netanyahu’s son early Thursday claimed in a tweet that in 2009, his father appointed an attorney general based on the understanding that he would fudge and close criminal cases against Yisrael Beytenu party chief Avigdor Liberman, at the latter’s request.

    In one tweet, he shared a screenshot from a 2013 article by the Haaretz daily chronicling the disappearance and death by suicide of several witnesses in an investigation against Liberman, before the attorney general at the time, Yehuda Weinstein, closed the case without charges.

    Liberman had been suspected of maintaining ties with, and illegally continuing to benefit from, private companies he had founded as a private citizen, even when he was a public official, via a series of shell companies.

    In response to the younger Netanyahu’s tweet, Haaretz publisher Amos Schocken replied: “Yair, the problem is probably that your father chose Yehuda Weinstein as attorney general so that he would fudge and close the cases against Liberman.”

    “Here is a scoop for you,” Yair Netanyahu responded. “That was his [Liberman’s] most important coalition demand in 2009. He [Benjamin Netanyahu] didn’t have any other choice.”

    The case against Liberman was handed in 2009 to attorney general Menachem Mazuz shortly before the latter’s term ended, with a police recommendation to press criminal charges.

    However, once Weinstein was appointed in February 2010, the hearing process and related procedures ended up taking more than three years, until Weinstein announced in 2013 he was closing the cases without charges.

    There have since been many media reports and allegations by top lawyers that Weinstein had intended from the start to close the case and that there had possibly been an illicit deal between Netanyahu and Liberman, but those suspicions have never been publicly confirmed.


  2. @ Adam Dalgliesh:Maybe actually believed that after drawing a line the sand about Haredi conscription and saying he would not change his mind on it he would stick to this point. He was saying this for months. He would have been perceived as weak if he backed off on this point. This would have made him political toast with his voters.

    I agree with him on the point but wish they could have come up with something that saved the Haredim face but got their draft numbers up. Lieberman believed the compromises offered were farcical as they would be able to completely avoid the draft.

    Bibi only dumped Liberman because the Haredi had larger numbers. He also tried to do a deal with Labor to avoid Liberman. All but one of the UTJ rabbis had signed off on the draft deal. So even though I am not a Liberman fan he was very consistent on the draft deal and had said he would not change a comma for months and did not.

    Anyway I have had enough of this subject. Did Bibi pay to say Liberman must have been bribed? The Likud will be blasting Liberman in Hebrew and Russian now for month

  3. A similar situation will greet President Trump, when he arrives in the UK for a state visit with a greatly diminished British monarchy, a lame duck Prime Minister and a Parliament that represents the interests of European bureaucrats rather than Britain.

    Life has difficulties. So, what else is new?

  4. @ Bear Klein: I agree with all of this Bear. Except as to the explanation of Yvette’s motives, and the practical consequences of his behavior. If Yvette had been concerned mainly about strenghening his own political power, he would have accepted a position in Bibi’s government. Now he has made himself permanently unacceptable to the Likud, without necessarily winning over Blue and White. And polls show that a very large percentage of the public blames him for the second election within a year, which has the Israeli public really pissed. And I think Yvette is a sophisticated enough politician to grasp this. He is very unlikely to be included in any future Israeli government now. If his motives were to advance his own career, why would he do this? No one in politics likes or trusts a (political) traitor or turncoat–not even the camp he wishes to defect to.

    While many Israelis share your anger at the haredim, an even larger number are furious that the country has been left without a functioning government or a legislature at a time when the nation is in deadly peril from external enemies.

    Why did he first tell President Rivlin that he supported Bibi continuing to be Prime Minister, and then refuse to serve in his proposed government? It certainly looks like a calculated and malicious deception and sabotage.

    And if he were seriously concerned to limit the privileges and draft exemption of the haredim, he would certainly have agreed to serve in Bibi’s government, where he would have a better chance to accomplish this than in a self-imposed political wilderness.

    All this suggests to me that he has shifted his focus from his political career to making a lot of money. His business interests are long standing. Burg (what is his first name, Bear?) was certainly interested in money when he quit his job with the Jewish Agency, published a book denouncing “Zionism” and denying that Israel was a legitimate state, and moved to Brussels, where he started a lucrative business. Presumably it was the EU, whose headquarters happens to be in Brussels, who persuaded him to defect.

    So the real question is, who is paying Yvette to cause political chaos and leave Israel without an effective, legitimate government? I can think of only two possible suspects: Number one, people who want to make the judiciary the sole power in Israel, without any competition from the Knesset or the cabinet ministers. Number two: Putin. The second possibility is made stronger by the frequently reported fact that Yvette has always had extensive business interests in Russia. It would be reasonable for a politician who realized that his political ambitions were on the wane to shift his focus to the business sector. Many politicians have taken lucrative “retirement jobs,” not only in Israel but in the u.S. and Britain, and probably everywhere .

  5. @ Adam Dalgliesh:
    Just a detail you may want to know is that Nir Barkat is the former Mayor Jerusalem and is a secular high tech millionaire. He ran on the Likud ticket and is a current MK in the dissolving Knesset. You meant to be talking about Moshe Lion who is the current Mayor of Jerusalem.

  6. @ Adam Dalgliesh:Liberman certainly at times can be a hypocrite as Bibi pointed out. He is a politician who wants power, that plus his competitive hatred of Bibi are at play. Yes, the result is cheered by some on the left as Liberman has kept the immunity bill from passing.

    If this was not a personal bill to save Bibi from being charged under current laws I might not be against it. The way it is being done is like in a third world country and is WRONG!

    Liberman has actually latched onto something that has him gaining more popularity currently, the imposition by the Haredi on regular Israelis is something very severe. You have never lived in Israel so you do not feel it and with all due respect probably do not understand it.

    60,000 Israelis every year go overseas to get married because they can not stand the Rabinut. This is just an example. I got married in Israel a long time ago when it was easier and it was still a major major bad process and extremely difficult and highly unpleasant. It can be much worse today.

    Israelis whose kids go to the IDF and they themselves went to the IDF are mad and angry about the Haredi shirkers of their responsibilities, Liberman gets this! He has tuned into this anger and it is making his political fortunes stronger perhaps (we will see after the next elections). Currently he is polling higher and has gained in popularity.

    Again you can do an analysis of how many more Haredi would have served or not but that is not what is going on in Israel. Liberman tapped into the resentment of what the Haredi are trying to which is completely shirk responsibility for IDF service. Many many Israelis are livid about this.

    Liberman believes his fortunes go up if Bibi goes down. Yes, the left cheer this. Liberman was one of several former Likud members who had ambitions of eventually being the Prime Minister via the Likud. When Bibi helped make sure he did not rise too high in the Likud, he left and formed Bayit Yehudi. This worked well for a while rising up to 15 seats and becoming Foreign Minister and later Defense Minister. However, in both jobs Bibi kept him from having the normal powers of the Minister in charge.

    So what you have is a full blown vendetta playing out in the Israeli political and electoral stage. It is not left versus right but Bibi versus Yvette (Liberman).

  7. @ Bear Klein: Bear, I just want to clarify one point. I heartily agree with you that the haredi leaders have too much power and the haredim generally have too many privileges-such as being supported indefinitely by taxpayers money, and being exempt from the draft. I think the refusal of the haredi leaders to let their people serve in the IDF, and their harassment of those haredi men (there are some) who do volunteer for service, is disgraceful.

    But I don’t see how Leiberman’s sabotage of Bibi’s government, and his forcing new elections, will change this situation one iota. Only the courts have the power to draft the haredim. And no law passed by the Knesset concerning this issue will have any impact unless the court ratifies it.

    In any case, by refusing to serve in the government, Leiberman denied himself any possibility of influencing government decisions about this issue.

    That is why I think he is using this issue as a cover for protecting the Supreme Court.

  8. @ Bear Klein: My doubts about this analysis, Bear, were best put by Netanyahu himself in his speech yesterday. In the past, he pointed out, Lieberman did not demand many concessions fromm the haredim when he served in a long series oprevious governments. He broke up Netanyahu’s last government in late 2018 over differences over defense policy and response to the Gaza terror threat. At the beginning of the this year, he joined forces with several haredi groups to help elect Jerusalem’s current mayor, NIr Barkat. Before and even after that election, he didn’t criticize the haredim. Instead, he promised them some sort of quid pro quo (I forget exactly what) in return for their support of his candidate and friend, Barkat.

    Many people have also pointed out that the law Leiberman was so insistant had to be passed his way without changes would not have resulted in drafting many haredim; and that had he made no demands, the Supreme Court has warned that it will soon force the Department of Defense to issue draft notices to all haredim of military age–in other words, a court order that would be much tougher on the haredim than Leiberman’s proposed bill.I Neither the Leiberman bill nor the haredim’s proposed bill is likely to be upheld by the court.

    I do not doubt that Leiberman is solicitting support from anti-haredi Israelis to justify his sabotage. But since his behavior in forcing two elections in a row in less than a year has not in fact resulted in a single haredi being drafted, and is extremely unlikely to have that effect (only the court really has the power to order this, not the Knesset, and Leiberman surely knows this), it is much more likely that his true motive is that he has either been blackmailed or bribed, probably both, to prevent Yariv Levin of the Likud and Bazalel Smotrich of the United Right from limiting the powers of the court–including its power to destroy settlements and prevent them from being built.

    Several “left” leaning journalists in the Jerusalem Post, Ynet News, and the Times of Israel have made it clear that as far as they are concerned preventing legislation to curb the power of the court is their most important priority, and the priority of the “progressive” camp as a whole. And they have openly celebrated Bibi’s inability to form a government as a great victory for the what they call “the rule of law” and” democracy” (by which they mean the absolute power of the Supreme Court and the leftist lawyers’ establishment that it represents.

  9. @ Adam Dalgliesh:Liberman is not part of the left camp. He would join the right block if they agree to draft the Haredi. He is better characterized as an independent.

    By railing against what the Haredi are doing and want, he is picking up more support from many Israelis who do not like religious coercion in their lives. His voters are Secular Right wing Israelis who are mostly from the former Soviet Union.

    Since Bibi will likely get indicted now that no immunity law will be drafted prior to a potential indictment, Liberman hopes to get more power with his political enemy Bibi out of the way or weakened by legal problems.

    Labels of left and right do not fit what is going on. It is a power struggle between the Haredi getting out of the draft plus changing Israelis lives to fit what they demand versus those who want the Haredi out of their lives be it Shabbat, marriage, divorce and not doing their fair share in the IDF.

    It is also a personal power struggle between Liberman and Netanyahu who hate each other. Liberman keeps trying to find something to bring Bibi down and build himself up. Be this Gaza/Hamas or the Haredi draft issue.

  10. While Jeremy still counts Yisrael Beiteinu as part of the “Right” bloc, this is clearly not the case. As Bibi said recently, Leibermann is a “serial wrecker” of right-wing regimes. There is no way he will ever again be partof a Likud-led coalition now that he has shown his hand openly. Jeremy’s recent polls show that the “Right” bloc, if you leave out YB as is obviously essential,has 55-57 seats, the leftists (including Leibermann, who is now clearly aligned with them) with 63-65 seats.

    Who benefits from all this? First of all, the Supreme Court and its oligarchical hangers-on, including Mandelblit. If the Parliament is perpetually unable to form a majority coalition, who is left in charge? The Supremes.

    Also, maybe Putin. Although Putin professes friendship with Israel, he is a devious character. His English language mouthpieces, RT and Sputnik, are both hostile to Israel and support th aaPalestinian terrorist factions and Iran. Putin seems to be playing a very complicated double game. He may think that a weak Israel, with a divided Knesset, will be plaible to whatever Russia wants. Without a functional parliament, Bibi or whovever succceeds him may let Russia take over the so-called ‘peace process.” And Leiberman’s de facto support for the Pal interests, which Dr. Lerner has documented, could be useful to Putin here. Russia wants the “two state solution.”

    How does Leiberman fit into this? He has been harassed for decades by successive attorneys-general for his apparently extensive but murky business interests, which seem to center on Russia, his native country. But what if the attorney-general and the Supreme Court, in collaboration with some Israeli-Russian businessmen associates of Leiberman, should now promise him to do nothing to interfere with these murky business interests? Or actively facilitate them? Since the attorney general’s office and the public prosecutors’ office are both completely controlled by leftists, and are not answerable to the minister of justice or the Prime Minister, they can easily facilitate bribes to Leiberman without his having to fear prosecution. The attorney general and the public prosecutors can give him total de facto immunity if he does their bidding.Of course, Putin’s people can give him total immunity for dubious business dealings inside Russia.

    Jonah Jeremy Bob, the unofficial press spokesman for the Supreme Court, the Attorney General and the Police on the staff of the Jerusalem Post, points out in a recent column that the Supremes are enormously relieved that Bibi has been unable to form a government, since he is now unable to appoint Yariv Levin and Bezelel Smotrich to offices where they can introduce legislation to rein in the courts absolute power, as they have promised to do, and rein in the police from destroying Jewish homes and indefinitely detaining, and torturing, “settler” activists. Bob had earlier reported that the “Supremes” were terrified that Levin and Smotrich would soon be appointed to very sensitive positions in the Justice and Police ministries. Now they have nothing to fear.

    And Leiberman is now free to attain his true lifetime ambition, which is to get very rich.

  11. The Pal-Arabs are rejectionists to any proposal that does not give them everything they want . This is the destruction of Israel.

    They are now threatening terrorism against the Arabs who attend the Bahrain Conference. So there is no negotiating with them.

    In the past few days, the Gaza-based groups have issued several statements hinting that they would use all means, including terrorism, to foil the US peace plan.

    What is perhaps most worrying for the Arab leaders are the threats coming from Iran’s puppets — Hamas, Islamic Jihad and Hezbollah. It now remains to be seen whether the Arab heads of state will be deterred by these threats or ignore them at the risk of becoming the Palestinians’ terror targets.

    Clearly, the very Palestinians who are boycotting a conference — whose aim is to help them move beyond their leadership-imposed economic devastation — will wind up the big losers in this spiteful scenario of hate. This time, however, it also seems that the Palestinians will not only deprive themselves of billions of dollars, but will also damage — perhaps irrevocably — their relations with influential Arab countries. By all accounts, the Palestinians appear to be heading toward another “nakba” (catastrophe).

  12. Third poll also indicates that you can not get to a government with UTJ/Shas are needed in a coalition with Bayit Yehudi if they stick to their current hard and fast positions. So either they change positions (highly unlikely) or have national unity government.

    Currently that requires Bibi to step aside which is also unlikely. The answer is ________________________?

  13. So recent poll layed out:
    Current Knesset seats in [brackets]

    36 [39] Likud (Netanyahu & Kahlon)
    33 [35] Blue & White (Gantz, Lapid, Yaalon & Ashkenazi)
    09 [05] Yisrael Beitenu (Liberman)
    07 [08] United Torah Judaism (Litzman)
    07 [08] Shas (Deri)
    07 [06] Hadash-Taal (Odeh & Tibi)
    07 [05] United Right List (Peretz, Smotrich & Ben Gvir)
    06 [04] Meretz (Zandberg)
    04 [06] Labor (Gabbai)
    04 [04] Raam-Balad (Abbas)

    Not polled:

    ?? [00] Hayamin Hehadash (Bennett & Shaked)
    ?? [00] Zehut (Feiglin)
    ?? [00] Gesher (Orly Levy)

    66 [65] Right-Religious Bloc
    54 [55] Center-Left-Arab Bloc

  14. Latest Poll after the non coalition debacle. So Liberman’s party would grow to 9 seats. So will the same mess happen again?

    If the election was held now, Yisrael Beytenu would increase from its current five seats to nine, the poll found, which would make it the third largest party after Likud and Blue and White. The Likud would gain two seats from 35 to 37 – but if, as expected, Justice Minister Ayelet Shaked runs with the party, it would win 41 seats. UTJ would win eight seats, Shas seven and the Union of Right-Wing Parties and Meretz six each. Hadash-Ta’al and the New Right under Naftali Bennett and Shaked would each win five, and the Balad-United Arab list four. Labor and Zehut would not cross the threshold.

    Asked whether the news that Netanyahu tried to advance a bill granting him immunity would impact their votes, 62% of Center-Right voters said no, 20% said it decreased the chances, and 18% said it raised them. Among Center-Left voters, 69% said it decreased the likelihood of them voting for Likud, 27% said it had no impact and 2% said it raised it.

    On the issue of whether Attorney-General Avichai Mandelblit should freeze the legal process against Netanyahu during the election, 91% of Center-Left and 34% of Center-Right voters said no, while 7% of Center-Left and 45% of Center-Right voters said yes. The rest said they did not know.

    Some 40% of respondents said they wanted Netanyahu to remain prime minister after the election, 48% said they preferred someone else and 12% did not know.

  15. Mandelblit willalmost certainly refuse to move up the date when he will give Bibi a chance to present his replies to the charges against him–I think he has scheduled it for October, just after the election. With the date of the hearing scheduled so soon after the election date, and all sorts of hostile leaks coming out of Mandelblit’s office, Bibi will have a tough time winning the election.

  16. This from Today’s Jewish News Syndicate: “On Kan Bet radio, Likud MK Tourism Minister Yariv Levin said Lieberman had demanded three ministers and five portfolios as the price for his entry into the coalition.” Maybe that’s why he sabotaged things. Greedy for power?

  17. @ Bear Klein:
    It is imperative that Bibi find another 5 seats in order not to depend on Liberman’s 5 seats..

    The New right isn’t going to run independantly. Shaked is joining Likud and Bennet said he would attach himself to a party that is sure to pass the threshold. The New Right had almost 4 seats. Feiglin , I think, had enough votes for only one seat I think. Feiglin shouldn’t run again unless he is sure to pass the threshold. But he will want to augment his party rather than join another. He wants to be the head of his party. But who will join him?

  18. @ Ted Belman:I am really curious how you think the 5 votes lost will be placed? What do you foresee or agree (disagree) with the following thoughts I have?

    New Right – Will it pass threshold? Likud is trying now to get Shaked to join them from what I read. Many voters really like her and may follow her to the Likud if that happens. So if you are looking for more seats on the right that could help. I think New Right will get less votes and not pass threshold however. Bennett has been weaken in the eye of many right wing voters by the last election cycle.

    “Feiglin” – Should join United Jewish Home but will not and he will get even less votes.

    Liberman- Will get a couple more seats from those who side with him in regards to the draft issue for the Haredi. This might make it even more problematically to form a coalition with both Bayit Yehudi plus UTJ/Shas.

    Likud- May get less seats as some voters may stay home as they are disenchanted that Bibi lied during the last election cycle when said he was not going to pass an immunity bill and he clearly was working on that.

    Also Kahlon’s (Kulanu) is merging with the Likud that will not increase the total amount of seats on the right. In fact it may end up costing the right a couple of seats.

    I think it is not clear the right plus Haredi parties will end up with more seats in a manner that can form a government. Liberman & Haredi standoff could continue. If Bibi stepped down it and was replaced by Saar (example) it is possible Likud and Blue-White could form national unity government without the Haredi parties. This would solve the draft law issue but other issues would crop-up.

    Not so clear that the right will win in a manner that leads to a stable government.

  19. This new election will enable the votes which were lost due to the failure of Bennett and Feiglin to pass the threshold, will no doubt now be cast where they won’t be lost.

    That’s got to be at least 5 more seats for the right.