Palestinians have not yet been able to build “the foundations of a sustainable economy,” Mohammad Mustafa, chairman and CEO of The Palestine Investment Fund, told an audience at the “Twenty Years after Madrid” conference at the United States Institute of Peace on Nov 2.

November 8, 2011

Palestinians have not yet been able to build “the foundations of a sustainable economy,” Mohammad Mustafa, chairman and CEO of The Palestine Investment Fund, told an audience at the “Twenty Years after Madrid” conference at the United States Institute of Peace on Nov 2.

Mustafa delivered his assessment at a panel on the “Economy of Peace” that included Israeli and American specialists on regional economic cooperation.

Mustafa argued that the central problem for the Palestinian economy stems from politics—the overwhelming Israeli role in Palestinian economic matters that will continue until the Israeli-Palestinian relationship is redefined in a future political settlement. “The Palestinian Authority has not been able to control its resources,” he said. He cited the example that the PA needs Israeli permission to develop some $6 billion to $8 billion in natural gas reserves off the coast of Gaza. He also noted that trade with Israel accounts for 85 percent of the Palestinian total.

The overall Palestinian unemployment rate is about 25 percent, with some 35 percent out of work in Gaza. Mustafa said that Palestinians will need the private--not the public--sector to create the many jobs that are needed.

Political priorities limit economic opportunities in other ways too, noted Daniel Lubetzky, founder and chairman of PeaceWorks, which pursues commercial joint ventures among neighbors in conflict zones. “The Palestinians face enormous pressures against working with Israeli counterparts,” Lubetzky said. “They don’t want to have economics supplant a political solution.”

Nimrod Novik, chairman of the Israeli nongovernmental group Economic Cooperation Foundation and a former Israeli peace negotiator, said that an earlier Israeli approach—which he described as “let’s build the Palestinian economy first and then we can go further”—has not worked.

Explore Further

Related Publications

What Does the U.N. Cease-Fire Resolution Mean for the Israel-Gaza War?

What Does the U.N. Cease-Fire Resolution Mean for the Israel-Gaza War?

Tuesday, March 26, 2024

By: Robert Barron

On March 25, the United Nations Security Council (UNSC) passed Resolution 2728, calling for an “immediate” cease-fire in Gaza. The motion’s passage came after weeks of back and forth and posturing among the UNSC’s permanent and rotating members. The exact phrasing of the resolution and its relevance to the situation on the ground, as well as bilateral and multilateral relations — particularly U.S.-Israel ties — have been the subject of heavy public and media attention since Monday, raising questions about the resolution’s subtext, intent and limitations. USIP’s Robert Barron looks at these questions.

Type: Question and Answer

Global PolicyPeace Processes

Plan for Gaza’s Future Highlights the Challenges That Lie Ahead

Plan for Gaza’s Future Highlights the Challenges That Lie Ahead

Thursday, February 29, 2024

By: Lucy Kurtzer-Ellenbogen

The document that Israeli Prime Minister Benjamin Netanyahu presented to his security cabinet for discussion on February 22 may be his first formal articulation of a postwar plan for Gaza, but is largely a compilation of views that have been expressed publicly over the past few months. Accordingly, it offers few surprises, but could deepen tensions between Israel on one side and the United States and regional stakeholders on the other. 

Type: Analysis

Global Policy

Six Dilemmas Facing Egypt

Six Dilemmas Facing Egypt

Thursday, January 18, 2024

By: Ambassador Hesham Youssef

Since Hamas took control of Gaza in 2007, Egypt has been heavily involved in efforts to end the military confrontations and wars that have periodically broken out in Gaza. However, the scope, scale and stakes of the current war is unlike any prior round of hostilities. In response to the massacre and hostage-taking of mostly Israeli civilians by Hamas and other militant armed groups during their devastating attack on Israel on October 7, 2023, Israel has launched one of the most destructive wars in its history. Indeed, this war will be transformational in numerous ways, with ramifications for several stakeholders beyond the parties themselves.

Type: Analysis

Conflict Analysis & PreventionGlobal Policy

A Slippery Slope? U.S., U.K. Launch Strikes on Iran-Backed Houthis in Yemen

A Slippery Slope? U.S., U.K. Launch Strikes on Iran-Backed Houthis in Yemen

Friday, January 12, 2024

By: Sarhang Hamasaeed

On January 12, the United States and the United Kingdom, supported by Australia, Bahrain, Canada and the Netherlands, launched military strikes against Houthi targets in Yemen in response to the group’s attacks on civilian and military ships in the Red Sea. The U.S.-led strikes are a significant escalation and part of the growing regional impact of the Israel-Hamas war, which the United States has been actively trying to prevent from turning into a regional war.

Type: AnalysisQuestion and Answer

Conflict Analysis & PreventionGlobal Policy

View All Publications