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A proposal for a Trump initiative for the economic development of the West Bank and Gaza

By Brig.-Gen. (ret.) Dr. Shimon Shapira and Col. (ret.) Dr. Jacques Neriah
web posted May 22, 2017

Since the Oslo Accords in 1993, the West Bank and the Gaza Strip have been allocated international aid to maintain the territories administered by the Palestinian Authority (PA). In 2016, the Congressional Research Service wrote that the PA was “among the world’s largest per capita recipients of foreign aid.” Yet, billions of dollars contributed by the donor countries evaporated because of lack of transparency, corruption, and inefficiency.

The mismanagement was made worse by the provision of resources for goals that do not serve the Palestinian economy but are related to the PA’s terror infrastructure, such as funds for convicted terrorists or their families. In 2016, this alone amounted to $300 million. It is not surprising that despite all the money that has poured into the West Bank and the Gaza Strip, the situation there has only worsened. The economy of these territories has stagnated with only slow economic growth for prolonged periods of time.

As a result, the PA suffers from under-development, virulent poverty, pandemic housing problems, unemployment, lack of adequate medical care, inadequate educational institutions, a catastrophic infrastructure, ecological and environmental hazards due to the pollution of water sources and aquifers – all of which became ammunition for radical Islamic organizations, which have taken advantage of the plight of much of the population to incite against Israel, the Jews, and foreign powers associated with the Jewish state, mainly against the United States.

International terrorist organizations and their state supporters have exploited this situation, particularly in the Gaza Strip. On the one hand, the military arm of Hamas works with the Northern Sinai branch of ISIS, providing training, weapons, and medical assistance. On the other hand, Hamas has been a major beneficiary of Iranian military assistance including rockets aimed at Israel’s cities. While Israel nonetheless allows about 900 truckloads of good per day to enter Gaza through border crossroads, this has still required Israel to impose border restrictions on the Palestinians, stemming from Israel’s concern for the security of its citizens.


The suggested strategy to adopt in order the lower the political tensions in the area would be the creation of an atmosphere of cooperation, which in turn will make it easier for both parties to begin a real cooperative process and finally allow peace to prevail between Palestinians and Israelis. It is the opinion of the authors of this paper that the Trump administration should play a leading role in ameliorating the situation and creating the proper atmosphere to allow the two parties to reach a future agreement.

To defuse the hostile environment, it is of the utmost importance that the U.S. propose an improved economic recovery plan to the Palestinians that will generate a situation in which Palestinians will not allow the extremists to rule their lives. The recovery must not be another cash handout to the Palestinians, but rather a program aimed at improving Palestinian infrastructures.

Instead of bigotry, hatred, and violence, the Palestinians will begin to see a steady supply of electricity, better water quality, improved healthcare, economic growth, and educational benefits – national accomplishments as a result of the economic recovery led by the Trump administration.

It is of prime importance that the Trump Administration nominates a high ranking coordinator whose responsibility will be to lead the recovery plan designed by his team and their Palestinians counterparts. In essence, the U.S. will have to present a (multi-billion USD) package deal to be disbursed over the next few years to create growth, employment, prosperity, and recovery. All projects would be implemented by U.S. firms working with local sub-contractors.

The areas of activity are as follows:

  1. Roads and Railways: It is important to renovate the transportation infrastructure to allow for improved connection between the different parts of the PA. It would be beneficial to rethink a highway that would link Gaza to the West Bank and link the PA to the highway reaching Amman, Jordan.
  2. Electricity: Today the Palestinians are entirely dependent on electricity provided by Israel. The alternative could be to build power stations in the PA or at the border with Israel, powered by gas provided from Israeli/Palestinian wells in the Mediterranean Sea and constructed by U.S. companies.
  3. Port and Airport: These are essentials to assure the autonomy of the PA. However, due to security reasons, a more sound proposal would be for the U.S., in concert with Israel, to assure the security of those installations, once they are built and operational.
  4. Housing and Urbanization: Palestinian cities are a city planner’s nightmare. Re-organizing the cities/refugee camps to best serve their citizens should be a priority. The Gaza Strip is one of the densest areas in the world. The only way to survive the demographic outburst is by rebuilding Gaza as “a new Hong Kong” by dismantling the existing refugee camps and building instead a modern complex of high-rise towers together with the required infrastructure (kindergartens, schools, playgrounds, healthcare clinics/hospitals, and municipal services). In the new political situation, it is inconceivable that a situation will be allowed to exist by which a Palestinian refugee living in his own state will still be considered to be a refugee.

Alternative plans have explored the possibility of building artificial islands in the Mediterranean facing Gaza and linked by bridges to the mainland to gain reclaimed territory over the sea and build high rise towers on them as well.

  1. Water Supply: The PA suffers from a lack of water. This can be addressed in multiple ways. First, repair the Palestinians’ urban water infrastructure. As much as 33 percent of Palestinian cities’ water is lost through leakage or mismanagement. Unauthorized water wells proliferate, leading to the salinization or crashing of aquifers. Assist the PA in managing the drilling.

The U.S. could request Israel to augment its desalination capacity to provide the PA with purified water. Second, new desalination plants can be constructed in the PA’s territory. Financed by a joint U.S.-Gulf state fund.  

  1. Sewage Treatment: Sewage has reached the deep aquifer and polluted most of the wells in the West Bank and Gaza and also penetrated the Israeli aquifer. The pollution has reached catastrophic proportions endangering the Dead Sea. The technology to change this situation currently exists, the failure to exploit the capacity emanates from Palestinian political considerations. Construct water treatment plants to recycle waste water for use in agriculture instead of using fresh water. It is imperative to take care of the sewage leaking to the Jordan Valley, the Dead Sea, and the Negev desert.
  2. Healthcare: Creating a complete healthcare system from scratch. Building new hospitals on the borders with Israel while renovating existing ones in Gaza and the West Bank.
  3. Tourism: Encouraging the establishment of hotel networks around religious and other tourist sites in the West Bank, and along the seashore in Gaza. Special attention should be given to religious sites like Bethlehem and Qasr al-Yahud.

These eight areas of activity comprise the primary areas of focus for this blueprint and outline the scope of effort between its potential partners.

It is essential that Israel is a full partner in the planning of this initiative. Israel has vital security concerns in Area C in the West Bank which contain vital defense facilities. There is sufficient space in Areas A and B for new construction. European donors have not always been cognizant of these interests. 

But there are also wider considerations for this plan. In recent years, goods from the West have reached Israeli ports, where they were re-routed to the West Bank and Jordan and then eastward to the Arab world. Economic planning must take this regional dimension into account. In the future, it is conceivable that Israel, the West Bank, and Jordan could serve as a regional hub. 

After considering a number of alternatives, it is clear to the authors that the best long-term political and economic solution to the future status of the West Bank and the Gaza Strip is the establishment of a confederation linking the West Bank and Jordan. This will provide economic and geostrategic depth to Jordan and the Palestinians and a viable solution to the Israeli-Palestinian conflict. 

Finally, what happens in the Gaza Strip will have implications for Northern Sinai, which has been the heart of Egypt’s present security challenges. Thus at a certain stage, the concerns of both Egypt and Jordan must be taken into account as this initiative unfolds. 


Implementing this plan holds the promise of creating the desired atmosphere in which the Palestinians can feel confident and ready to co-exist with their Israeli neighbors through the good services of the Trump Administration. Defusing the conflict between Israel and the Palestinians definitely serves the goals of the U.S. and certainly carries a deep impact on U.S. national security. It will provide a firewall for containing further Iranian expansion into the Southern Levant with the active support of Russia. The advantages of such a situation are enormous compared to the risks of confrontation which transcend Israel’s borders. ESR

Brig.-Gen. (ret.) Dr. Shimon Shapira is a senior research associate at the Jerusalem Center for Public Affairs. He edited the Jerusalem Center eBook Iran: From Regional Challenge to Global Threat. He served as bureau chief to the Minister of Foreign Affairs and the military secretary to the Prime Minister. Col. (ret.) Dr. Jacques Neriah, a special analyst for the Middle East at the Jerusalem Center for Public Affairs, was formerly Foreign Policy Advisor to Prime Minister Yitzhak Rabin and Deputy Head for Assessment of Israeli Military Intelligence.




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