Over the past year, US President Donald Trump has pursued “peacemaking” around the world. A hallmark of his approach is the belief that conflicts can be resolved through economic threats and rewards. Most recently, his administration launched an economic development plan as part of the peace settlement for Israel’s genocidal war in Gaza, the war in Ukraine, and the conflict between Israel and Syria.
While some may see President Trump’s “business” approach to “making peace” as unique, this is not the case. The mistaken belief that economic development can solve conflicts has been a staple of Western neoliberal peace initiatives in the Global South for the past few decades.
Occupied Palestine is a good example.
When the “peace process” began in the early 1990s, Israeli Foreign Minister Shimon Peres began to advocate “economic peace” as part of it. He pitched a vision of a “New Middle East” as a new regional order that would guarantee security and economic development for all.
The project aimed to place Israel at the economic center of the Arab world through regional infrastructure such as transportation, energy, and industrial zones. Mr. Peres’ solution to the “Israel-Palestinian conflict” was Palestinian economic integration. Palestinians were promised jobs, investment, and improved living standards.
His argument was that economic development and cooperation would promote stability and mutual benefit between Israelis and Palestinians. But that didn’t happen. Rather, as the occupation continued to take hold after the US-brokered Oslo Accords and the establishment of the Palestinian Authority (PA), anger on the Palestinian streets grew, ultimately leading to the outbreak of the Second Intifada.
This neoliberal approach was tested again in 2007 by the Quartet of the United Nations, European Union, United States, and Russia, and their envoy Tony Blair. By then, the Palestinian economy had collapsed, losing 40 percent of its gross domestic product (GDP) in eight years and leaving 65 percent of the population in poverty.
Prime Minister Blair’s “solution” was to propose 10 “quick-hit” economic projects and raise funds for them in Western countries. This was closely related to the policies of then Palestinian Prime Minister Salam Fayyad, which later became known as ‘Fayadism’.
Fayyadism was sold to Palestinians as a path to statehood through institution-building and economic growth. Mr. Fayyad focused on generating short-term economic gains in the occupied West Bank while at the same time rebuilding the Palestinian security apparatus to meet Israel’s security demands.
This model of economic peace never addresses the root cause of Palestinian economic stagnation: the Israeli occupation. Even the World Bank has warned that without a political solution to end Israeli rule, investments will fail in the medium to long term. Still, the approach continued.
Some Palestinians benefited from this, but they were not ordinary Palestinians. They were a small elite: security officials with privileged access to financial institutions, contractors with ties to the Israeli market, and a small number of large investors. For the wider population, living standards remained precarious.
Rather than granting Palestinian statehood, Fayadism replaced liberation with control, sovereignty with security coordination, and collective rights with individual consumption.
This economic approach to conflict resolution only gave Israel time to strengthen its colonial enterprise by expanding settlements on Palestinian land.
The latest economic plan for Gaza, presented by Trump’s adviser and son-in-law Jared Kushner, is also unlikely to bring economic prosperity to the Palestinians. This project reflects two very contradictory dynamics. It foregrounds investment and profit opportunities for global and regional oligarchy, while systematically ignoring Palestinians’ basic statehood and human rights.
Security is framed exclusively around the needs of the occupying forces, while Palestinians are compartmentalized, securitized, monitored, and reduced to a depoliticized labor force stripped of social and national identity.
This approach views people as individuals rather than as nations or historically established communities. Under this logic, individuals are expected to acquiesce to oppression and deprivation by obtaining work and improving their standard of living.
These strategies have failed to build peace not only in Palestine.
In the Israeli-occupied Golan Heights, the United States has proposed expanding the demilitarized zone and turning it into a joint economic zone with a ski resort. The US approach appears aimed not only at pressuring Syria to relinquish its sovereignty over the territory, but also at recasting Syria as a security project that primarily benefits Israel. Under this framework, the United States would act as a security guarantor. But its close alliance with Israel raises questions about its impartiality and true intentions.
In Ukraine, the United States has proposed creating a free economic zone in part of the Donbass region, from which Ukrainian troops would have to withdraw. This would allow Russia to expand its influence without direct military conflict, creating a buffer zone favorable to Russia’s security interests.
Donbass has historically been one of Ukraine’s industrial bases, and turning it into a free economic zone would deprive Ukraine of important economic resources. There is also no guarantee that Russian forces will not simply advance and occupy the entire region after Ukrainian forces withdraw.
These neoliberal “solutions” to the conflicts in Gaza, Donbas and the Golan Heights are doomed to failure, as were the economic-driven peace initiatives of the 1990s and 2000s in occupied Palestine.
The main problem is that the US cannot actually provide reliable guarantees that the region will remain stable so that investors can secure a return on their investments. This is because no solid political solution is in place, given the fact that these proposals ignore the political, cultural and, most importantly, national interests of the people living in these regions. As a result, no serious or independent investor would commit capital to such an arrangement.
Nations are not made up of consumers or workers. They are made up of people with a common identity and national aspirations.
Economic incentives should follow, not precede, political solutions that secure indigenous self-determination. Therefore, any dispute resolution framework that ignores collective rights and international law is bound to fail. Political solutions must prioritize these rights, a requirement that directly contradicts neoliberal logic.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.
