The symbiosis between Palestinian ‘Fayyadism’ and Israeli ‘economic peace’: the political economy of capitalist peace in the context of colonisation

Abstract

Recent years have seen both the Palestinian Authority and Israeli government conveying the supremacy of economic approaches over politics to achieve peace and stability. More specifically, the encounter and symbiosis between Palestinian 'Fayyadism' as a professional application of neo-liberal approaches to state-building and economic development, and the Israeli strategy of 'economic peace' towards the Palestinians have shaped much of the Israeli-Palestinian conflict dynamic, with a particularly discernible materialisation in the West Bank. This article critically analyses this dynamic in light of the recently revived theory of 'capitalist peace', which, despite valid criticism, entails considerable similarities with the basic assumptions of 'Fayyadism' and 'economic peace'. While two key dimensions express this symbiosis—security co-ordination and economic normalisation—the article focuses mainly on the economic part, particularly the case of joint industrial zones, which exemplify the most extreme example of this symbiosis.