- Okay so today we're gonna talk about
the Israel-Palestine case that we made
at the School of Management.
And this is in many ways complementary
to the South African
study that we talked about
earlier in the semester.
- Distinguished participants,
I would like to welcome very cordially
President Shimon Peres,
President Mahmoud Abbas
and Secretary John Kerry.
(audience applauds)
We want to share first with you,
with all of you in this hall and beyond
a call for action to break the impasse.
This call for action
from all 300 key business
and societal leaders, from
both Israel and Palestine
representing large parts of the economy
is a powerful, and represents a powerful
mainstream constituency
to accelerate and support
the political process.
- When I look back, I
see that most of my life,
45 years was spent witnessing the conflict
between us and our neighbors.
It is too much, too long, and too painful.
There is almost not a single
Israeli or Palestinian family
that didn't pay a heavy and bitter price.
Too many mothers in both
sides, shed too many tears.
Enough!
During the entire last year,
a group of civic society
Palestinian and Israelis
worked closely together
trying to find a way in how they can help
accelerate the talks towards creating
two states for two people
living side-by-side
in dignity, peace, security,
justice, and prosperity.
In the beginning, we were
few, but very quickly
many other joined.
The group we have brought
together today in front of you
consists of some of the
leading business people,
top executives, academicians, security
and negotiation experts, and others.
Partners who have come
from multitude of opinions
are from the left and the
right, secular and religious,
with different views and
persuasions, however,
we are all united by our strong desire
to see an end to the
conflict and move towards
a two-state solution.
This will be a long road.
We have to build trust among ourselves.
We have to recognize that each
side has its own narratives
as to the reasons and the
backgrounds of the conflict.
We knew that we are unable
to breach these narratives.
So we decided to concentrate on focusing
on moving to a better future.
We believe that this can be done.
We are not here to submit a peace plan,
this is the role of the leaders,
and only they can do
the painful compromises
which will be needed in
order to move the process.
But we are here to encourage them.
We think that the civic
society has a role to play.
Our voice should be heard, loud and clear.
- Members of the business
community of Palestine,
we are issuing an urgent call
to action, to all leaders
to break the impasse
and put as their top priority the serious
and expedited pursuit of peace process.
This process must end
with the establishment
in the short term, of an
independent Palestinian state
standing tall alongside
the state of Israel.
As business leaders,
responsible for over a
substantial amount of the GDP
of both Palestine and Israel,
we have decided to take collective stand
and upset the status quo.
Enough is enough.
Break the impasse.
We shall support you and
contribute in any way we can.
We will not entertain joint
economic or commercial schemes
that would legitimize the status
quo, or illegal occupation.
The time for choosing
which side of history
we wish to be on is now.
- I want to thank those who took part,
and are taking part, and
will continue to take part,
in the Breaking the Impasse.
My good friends Munib
Masri, whom I have known
and worked with, and been
to some of those private
and quiet meetings with
him in various places,
and Yossi Vardi, thank you
both of you for stepping up
and being courageous.
And even as they found
plenty to disagree on,
I understand they did in the
course of their discussions,
even as they fully understand
the difficult history
that is embedded in this conflict,
they refuse to underestimate
the potential for the future.
And that's because Breaking the Impasse's
guiding principle is
to respect the freedom
and the dignity of all peoples.
- So that was the
official public launching
of Breaking the Impasse,
this group of some 300,
eventually grew to closer to
500 Israeli and Palestinian
businesses that were
committed to trying to move
the peace process forward.
And in some respects it was,
and certainly in the minds
of some its founders
it was loosely modeled
on the Consultative Business Movement
that had been so
consequential in facilitating
the South African
transition starting in 1988,
that we talked about earlier.
The first person you heard
there was Klaus Schwab,
the founder and President
of the World Economic Forum.
The second was Yossi Vardi,
Israeli's wealthiest tech billionaire.
The third was Munib al-Masri,
the wealthiest Palestinian,
business leader, also a billionaire.
And then finally of course John Kerry.
Breaking the Impasse was wheeled out
with great fanfare and it was
also a spectacular failure,
for reasons that will concern us.
So lemme just spell
out what today's agenda
is going to be.
First I wanna introduce
Nick Strong over here.
Nick is a graduate of Yale College,
major in Ethics Policy Economics,
graduate of Yale College class of 2018.
And he and I teamed up on this case.
He took a course from me as a freshman
and we got to know each
other, one another early.
And he, the truth be told,
is the real creative energy
behind the case that we wrote
with the SOM case writers
that we've made available for you today.
And it explores a number of projects
that have been pursued by business
in the wake of the failure of BTI.
And we're gonna focus on three of them.
I would urge you to look at the ones
we're not gonna focus on
just for want of time.
One is the Palestinian internship program,
created by Yadin Kaufmann,
through his company Sadara.
And the other is a man Shlomi Fogel,
who was the energy behind
the Jordan Gateway Project,
an SEZ of the sort
Gustino was talking about
but that goes across the Jordan River,
and is one of the few Israeli businessmen
doing business, collaborative
business with Palestinians
in Gaza today.
All five of the projects,
those two and the three
we are gonna talk about, have the feature
that they get attacked,
both by the BDS movement,
BDS standing for Boycott,
Divestment, and Sanctions.
This is largely, initially
Palestinian-founded movement,
officially launched in 2007
at a conference in Ramallah,
but subsequently,
I'm sorry, has antecedents going
really back to about 2001,
they all get attacked by BDS,
and they also get attacked
by the Israeli right,
on the same grounds.
They get attacked for
normalizing the status quo.
And neither the BDS people,
nor the Israeli right
wanna do that.
We'll talk about that, and
indeed we'll also talk about
what normalizing might actually mean.
But we'll do after we have
worked our way through
the cases that Nick is gonna end up
describing to you shortly, Nick welcome.
(audience applauds)
So the agenda, the rest of the agenda.
We're gonna be talking
about BTI and its failure.
Then the subsequent business efforts
and that's when Nick will take over.
And then what are the lessons learned.
And what should we think,
both about the possibilities
and limits for business involved
in high-conflict political
possible transitions and
other more general lessons
that might be drawn.
So what happened to BTI?
There was as you saw great
fanfare there on the Dead Sea,
when it was launched
in the summer of 2013.
It had actually been conceived
the year before in Davos.
And then launched the following year.
It was quickly walloped
the following summer,
because that was the summer
that Israel went into Gaza
in 2014, in one of the
most highly conflictual
military confrontations between Israel
and the Palestinians in recent times.
And that was then rapidly followed
by the March 2015 election
in which Netanyahu
did much better than anticipated,
actually against a combined coalition
of the left of center parties,
which didn't manage to stop him.
And he formed a very
right-wing government,
which was a harbinger of things to come.
And so most of the people
who had been involved
in the BTI movement got pretty demoralized
and it didn't cease to exist,
indeed it exists to this day.
I went to one of their meetings
earlier this year in Jordan.
But for all intents and
purposes it became moribund.
Then we're gonna talk about
the subsequent evolution
of business efforts in
the wake of BTI's failure.
Which is what Nick and I worked on
and what he is gonna discuss.
But first let me just
draw out some contrasts
between BTI and our earlier discussion
of the Consultative Business
Movement in South Africa.
And I should say right off the bat
that BTI's emergence surprised me.
And the reason it surprised
was the following,
in the wake of learning how big a role
South African business
had played in the 1980s,
in facilitating conversations
between the government
and the ANC, I had gotten interested
in what business might be doing in other
high-conflicts settings,
in Northern Ireland,
in the Middle East, and elsewhere.
And so I actually went in 2006 and 2007,
I went to Israel and the West Bank,
and I interviewed a lot of
Israeli business leaders.
And talked to them about
possible involvement
in the political process.
And I interviewed some of the leaders
of Israel's biggest companies
and there wasn't a whiff of interest.
They said what you would
expect them to say,
they said, our business
is business not politics.
The politicians wouldn't
listen to us anyway.
And indeed when we lobby the government
it's usually about doing
cross-border deals in Jordan
and Egypt, you know, we have nothing to do
with the peace process.
And I would say things like,
well imagine if there was peace?
You would have cheap Palestinian labor.
You would have, you know
Gaza is on the Mediterranean.
Think about the possibilities
if there were a real settlement.
And to a person, no interest.
We have cheap Russian
labor, was one answer I got
from a couple of people.
So I concluded that for whatever reason
there was no Israeli business interest
involving themselves in
the political process.
So I was very surprised
when in 2012 and 2013
I started learning about BTI.
So business had not been interested.
As you could see from that video,
BTI, one difference between it
and the Consultative Business Movement,
it was very much dreamed
up outside of the conflict
by people in Davos and it was
very much a top down movement.
Whereas the Consultative
Business Movement,
as I said to you when I gave
you my lecture about it,
really bubbled up and indeed was only,
the CBM was only created when ANC leaders
got fed up with having
informal conversations
in people's living rooms
and said we want an
organization to talk to.
So there was a much, even
though they were leaders
of large businesses, it
was much more bottom up
and generated from inside the conflict
than the BTI movement ever was.
Another important
difference is, as you heard
from Yossi Vardi, and Munib
al-Masri, to a lesser extent,
they both said we have all
political persuasions here
from the left to the
right, and we are not,
we're not taking a position,
we're gonna be politically neutral,
it's up to the politicians
to hammer it out.
Well so one thing to say
is the position of BTI
was never neutral,
because the were committed
to a two-state solution.
There are people on the
left and on the right,
who have one-state solutions in mind,
very different one-state
solutions in mind,
but nonetheless, one-state
solutions in mind.
So while talking about
a two-state solution
as the politically-neutral answer,
in fact they were not politically neutral
and were committed to
a two-state solution.
And one thing to say is, if you spend,
and Nick will have more to say about this,
but if you spend any
time in the West Bank,
it doesn't take you long to realize
that the probability that Israel
is going to leave the West Bank
is somewhere in the
range of the probability
that the federal government is gonna agree
to give North Dakota back
to the Sioux Indians.
It is so far beyond the realm
of what is feasible or likely
in the next several
decades, that for everybody
to keep saying, repeating this mantra,
that we're all committed
to this two-state solution,
tells you that a lot of people
are pretty disconnected from reality.
Another difference with the
Consultative Business Movement
was the resolute refusal
of anyone involved in BTI
to talk to Hamas.
This would have been the equivalent
of the Consultative
Business Movement saying
we're not talking to the ANC,
we're only gonna talk to Inkatha.
And indeed in December of
2013, I went to a meeting
of the CBM, of the BTI in Washington, D.C.
and I interviewed both
Vardi and Munib al-Masri.
And we then had this big forum,
there were 200 people there,
and they made speeches,
similar to the speeches
you saw there.
And then there were questions.
And I asked a question, I said, you know,
it was sort of about the
elephant in the room,
I said, nobody is talking,
nobody has mentioned Hamas.
What do you think about Hamas?
And they politely, but
definitely, unambiguously,
completely ignored my question.
They didn't answer it at all.
They didn't even go through
the motions of answering it.
It was as though I hadn't spoken.
And so again, one of the
key potential veto players,
on any possible settlement,
was not at the table, even implicitly.
Then they also lacked a K-Group.
They indeed trumpeted the
fact that they were 300,
and eventually closer to
500 businesses involved,
but even in the smaller meetings of BTI,
where there were 15 to 20
businesses represented,
people you interviewed
there would tell you
that there was never any
agreement on what it was
that they should actually be trying to do.
And there was not any
equivalent of Mike Spicer's
declaration to me that in
South Africa in the 1980s,
you could get nine people around a table
and it was the whole economy.
So there was no K-Group,
and therefore no capacity
to turn this movement into
something that could pursue
a goal in a disciplined way.
Again the refusal to get involved
in the negotiation
themselves, a big difference
from the Consultative Business Movement,
where the leaders of the
movement rolled up their sleeves,
started themselves talking to members
of the liberation movement,
committed themselves
to majority-rule democracy,
long before any politician
was doing that, and so showed themselves,
as the way I put it in the
lecture, showed themselves
as willing to internalize
some of the costs
of achieving a transition.
And none of these business
leaders was really doing that.
They were simply running
ads and making speeches,
telling the politicians
to make settlements.
Almost no effort to
build grassroots support,
was a corollary of that.
And one symptom of it is, if
you look at the BTI website
it's in two languages, what
are they, they're in Hebrew
and in English.
There's no Arabic on the website.
Again, just not so subtle
signal that there was
not much tactical, never
mind strategic thinking
about building grassroots
support for the new order.
And indeed, as
Yossi Vardi said in the
clip that I showed you,
they had actually they
thought made a smart decision.
They said we have these
conflicting narratives
about the past, and we don't
agree on what they are,
and we've decided to stop talking about
our conflicting narratives
and simply move forward.
But of course, if you wanna
move forward without confronting
the conflicting narratives at all,
that puts a different
question on the table,
namely how to build
support for the new order
that you're trying to construct,
among populations that
are deeply wedded to
these conflicting narratives.
So the short answer to this
is that the failure of BTI
was heavily overdetermined.
I think it was not well
conceived and not well executed.
But in the wake of the failure, first I,
and then Nick and I, got
interested in what some
of the principles behind
this were doing, instead.
And that's what he's spent
much of his undergraduate career doing,
and then as I said, he was the main energy
behind the case that we
wrote, so over to Nick.
(audience applauds)
- Hi everyone.
Thanks so much for having
me on this rainy Thursday,
and also for making your way over to SSF,
which I remember fondly as an undergrad.
So I think the place to begin
is a little post-mortem on BTI.
So we began by hearing the
actual start of the movement,
of the organization at the WEF in 2013.
And now, we can look at
some footage that we shot,
during the summer of 2018,
of those same principles
of Vardi, of al-Masri,
discussing what happened
and what went wrong in BTI.
I want you all to focus on this too,
what different narratives
come out of this?
The Israeli narrative, Vardi talks about,
the Palestinian narrative
that al-Masri talks about,
and the differences in
how that informs perhaps
some of the troubles that
have plagued the organization
from the beginning.
- I think first of all, that
the voice that we should
have a two-state solution,
and the voice that the business
community will support,
or at least parts, or big
parts of the business community
will support the government in doing it.
It's a very important input
in the future equation.
We should continue to meet.
- I believe in having the
political solution first.
I would never cooperate in any way
after my experience with the Israelis.
After experience with
the 500 business people,
the Israelis who said yes they
wanted two-state solution,
they wanted to do this,
and when it came, when they
WEF, the World Economic Forum,
tried to do something they vanished.
- We felt that the
Israeli business community
was not what we were
thinking that they would be,
in terms of being aggressive
and push the political
leadership to come in line
with what they were privately saying.
- These days it's not very
popular to be a peacemaker.
Not in the Israeli side,
not in the Palestinian side.
It's not very popular nowadays.
There's no negotiation today
and it's not very popular
because the society
doesn't support people that
believe in negotiation and peace.
The same happens in the Palestinian side.
Maybe even more.
- And to be frank, the
failure came mostly after
the war on Gaza in 2014.
During the war, when you
have suffering of people
for 50, 55 days, and
you don't hear a voice
coming from Israel, trying to,
or asking to stop that war,
or to stop that part of
grievance that we have,
we thought that it seems
all that we have done
does not have a good
sound on the other side.
They could not manage to say
something publicly against.
And we felt alone.
- In the minds of all
Palestinians it's dead.
In the minds of the Israelis
they want to keep it this way
for their own benefit, to create,
to say that we are working.
We're doing something
with the Palestinians.
But to me it's completely dead.
- If you go down the street
here, you ask any Palestinian
what do you think, one-state, two-state,
they'll tell you look, we take one state,
we have one condition only,
equal rights.
- So very different in 2018
from the initial excitement
about the organization in 2013.
I think there's a lotta
things that jump out.
But to me, the most
important part is you have
the Palestinian leadership saying
that this organization no longer exists
and then you're also interviewing a CEO
of the same organization,
which is moving forward
and still holding events.
I think that dovetails into
just a very brief history
of the conflict.
And what I want everyone to think about
in terms of narratives, as
we think about this conflict
and the business that's
operating within it,
so much ink has been spilled
on the history of the conflict.
There's plenty of wonderful courses
that you can take here at Yale on it.
So our mission today isn't
to actually understand
the conflict, to determine
what events took place
to shape it, but more to
be comfortable in the fact,
that there are multiple
narratives within it.
If you read the case, I begin
the history of the conflict
with the first massive wave
of European Jewish immigration
to what is now Israel in the late 1900's,
rather 19th century.
If you talk to some, they would define
the start of this conflict of this story,
particularly religious, or far-right Jews,
as going back to the times
of the Old Testament.
For Palestinians it could
be during the 17th century,
where there were efforts to gain autonomy
from the Ottoman Empire.
So our goal here is not
to establish the history,
but to recognize that there
are multiple narratives,
and that multiple narratives can be true.
I've two images up here
to show this conflict,
or this contrast.
On one hand, you see the separation wall.
It is two different people.
A separation wall, a security border,
and an apartheid wall.
Also on the left, you see
not only is there a conflict
of separation that you see in the barrier,
but there's also one of
co-existence and of proximity.
This is in the east of Jerusalem.
You see an ultra-Orthodox family,
passing Palestinian Arabs.
So I want everyone to get
comfortable with the fact
that when we think about
the principles in the case
we'll be discussing and how they operate
that there isn't a single narrative
that defines the conflict itself.
I think everyone subscribes
to different narratives.
And one of the challenges that they face,
and anyone I think in a
conflict zone like this faces
is actually understanding that
there's multiple narratives.
That what you're operating
and the assumptions that you're taking
are not necessarily universal.
So jumping back, Professor
Shapiro discussed
the two-state solutions
and the facts on the ground
that now make it quite
difficult to imagine
that it will take hold any
time in the near future,
but if you've been following
contemporary Israeli politics at all,
you know that this has
perhaps become more and more
moribund in the last few months.
So the left in Israel, the Labor Party,
which had been the traditional left,
has effectively dried up as a major force.
It's now Likud on the right,
and then a more centrist
party Blue and White,
under Benny Gantz.
And as you saw in the spring,
when there was this first
period of campaigning
and now they're going
through renewed cycles
of trying to form a
government, Likud especially
under Netanyahu was
pushing facts on the ground
increasingly away from
a two-state solution,
openly discussing annexing the West Bank.
And further, there wasn't a left left,
or even a center party that was providing
a viable alternative.
So one of the things that
I think we need to discuss
and think about BTI, is where do you move
if you're operating in this conflict,
if what's been the dogma for it,
since really the beginning
of two-state solution,
and that's both in Israel,
among Fatah and the Palestinians
and in the U.S. too.
Congress right now is
discussing passing a resolution
affirming its support for
the two-state solution.
If you're moving away from that,
if the status quo is changing,
then how do you actually operate?
Where are you moving towards?
The economic realities of today
are really one of separation.
Israel, if you've kept
up with their economy,
is truly a technology powerhouse.
Start-up nation is used
colloquially often to describe it.
But it's one of the leading
technologically-advanced
countries in the world.
In terms of startups per capita,
it is the world's leader.
The Palestinian territories,
so speaking about the West Bank and Gaza,
are diverging, but also far behind.
Though after the Oslo Accords,
there's a bit of an uptick
in the economic fortunes
of the West Bank.
Increasingly, this has become
more and more difficult,
as intifadas have created conditions,
and you're seeing above a
shot on a street in Hebron,
a wall separating a Jewish portion
from a Palestinian portion.
Destruction of capital, the
difficulty of moving goods,
and this is particularly true in Gaza.
The economic situation in the West Bank,
though nowhere approximating
that of Israel,
is still far more advanced than Gaza,
which has been under
blockade for some years now.
But I think the second point to make,
is there's always going to be
a sense of intractability
in the conflict too,
even as you have this
divergence economically.
Israel's a very different place,
if you think about its
economy from Palestine,
because of the geography of the conflict,
because of contours of
demographics, of shared history,
there's always going to be
this element of shared fate.
And I put this photo up,
which at first glance
looks like a standard Israeli beach,
overlooking the Mediterranean,
to make that very fact.
So if you went through the case,
you'll know that what
we're looking at here
is a beach just south of the
Israeli city of Ashkelon,
looking south to Gaza City.
It's quite interesting to go to this beach
because while it's well
within range of rocket fire,
during periods of conflict,
it's quite popular
among local Israelis to go to the beach.
But perhaps more importantly to us,
when we think about the
interconnectedness of geography,
is just north of this beach
is the Ashkelon desalination plant.
So Israel in a part of the region
that is quite water scarce,
has turned towards desalination
as a way to get much
of its water capacity.
And it was found out that
there's a period in recent years,
where the Ashkelon desalination plant
had to be closed because of raw sewage
being let out in Gaza due
to issues processing it
with lack of electricity,
capital infrastructure et cetera,
had been dumping raw sewage
into the Mediterranean,
flowing up to Israel and shutting down
the desalination plant.
And all this is to say,
that even as you have this divergence,
even as you try to establish
a status quo of separation,
even as you try to kick
the can down the road
and pass the buck on what a solution is,
there's always going to
be this intractability.
And I think that's something
we're going to continue seeing
as we discuss the different case examples.
Now let's talk very
briefly about geography.
Who here has been to
Israel or the West Bank?
Any impressions on its size
when traveling through it?
You can just shout it out.
- [Man] Small.
- Small, it's about
the size of New Jersey.
At its narrowest point
it's about 15k across.
And you can see, that part of that means,
that even if you don't have
the two-state solution,
if you have a separation
of the Palestinians,
of the Israelis, that
there is shared fortune
just by nature of the geography.
And the geography is quite contested.
You can have a situation
like we see in Gaza,
where you have a blockade.
Where you have Israel
totally removing itself
from connections to Gaza and
yet because of the environment,
because of the closeness of the geography
there's still has to
necessarily be connections.
And again, geography is so important
to understanding this conflict.
You think about the West Bank there.
Right now we're using
a United Nations map,
but the borders that are
drawn here are very much ones
that are understand contest.
Similarly, if we think about
what to even call the West Bank.
There's huge contest
about what that would be.
There would be those that
would call it the West Bank,
those that would call it
the state of Palestine
and those who would call
it Judea and Samaria.
So again, when we think
about contested geography,
when we think about different narratives,
there's the fact that all of these folks,
all these principals,
are operating with very
different assumptions
in a very confined space.
Now, I think the central question
we're all going to
consider together today,
is what can business do, so what can BTI
and similar folks do, when
the political process fails?
And to begin, let's go quickly
through the major peace talks
for the Israel and Palestine conflict
in the last 25 or so years.
So beginning in 1991, the lead up to Oslo,
you had the Madrid
conference, you had Oslo 1,
Oslo 2, the Hebron Protocol,
the Wye River Memorandum,
the Sharm el-Sheik Memorandum,
the Camp David Summit,
the Taba Summit, the Annapolis Conference,
you then had Senator George
Mitchell leading talks,
the John Kerry-led talks,
which dovetails into BTI,
and what you saw at the
start of class today,
and then 2019,
or coming sometime soon,
the Kushner Peace talks.
And think I've had this
slide for a couple years now
and I was telling Professor Shapiro,
every time I do this talk
I have to update that date.
But hopefully sometime in the near future
we'll hear about the Kushner Peace Plan.
But I think the takeaway here
is what's the actual progress
towards any solution,
and it's nearly none.
So if you're a business looking at this,
despite all the efforts, all the talks
and expend by the Arab League,
the belligerents themselves,
the U.S., Russia has been
involved in the quartet,
where do you actually go from here,
when the political process
fails and is stagnant?
So I think there's three
options for the private sector.
And for the next portion of the lecture,
I want everyone to imagine
themselves as a business person
in Israel, in Palestine, facing this
stagnant political
process, and thinking about
what options you have available
if you wanna move things along?
And the three I'm gonna layout is, one,
and this I think fits
into BTI's approach is,
you can revive, or influence
the former political process.
So you can, like BTI,
say we are gonna take
our collective influence
in the business community,
we have 30% of the GDP, and
we're gonna pressure politicians
on both sides to re-engage
in the political process.
We're not going to actually shape it,
we're not gonna say what a
solution's gonna look like,
but we're gonna be a pressure group
that makes our politicians
move forward with it.
The second, and we'll see
some examples of this,
though I think it becomes quite fraught,
is you can act completely independently
of the political process.
So you can say that the status
quo is not moving anywhere
from the political process.
Talks aren't doing anything,
there's no discussion.
So what I'm gonna do, is I'm gonna
change facts on the ground myself.
I'm gonna remove myself
from the political process,
and I'm gonna act independently of it,
and I'm gonna change the actual facts
by using my influence
as the private sector.
And then the third, and I
think the one that you'll see
most of the cases we discussed aligned to
because of the nature of the conflict,
is you act both within and
without the political process.
Fundamentally what I mean by that is
you cant's wring the
politics outta politics,
particularly in a high-conflict zone
like Israel and Palestine,
even when you are trying
to act independently of
the political process.
And we'll see this more
as we go through the case.
You are necessarily being
political in doing so.
Even the act of operating
outside the political process
is political, and quickly
becomes political.
So there's three main principles
I wanna talk about today.
And you likely saw them in the case.
They are SodaStream,
Rawabi City, and then also
EcoPeace Middle East, all
of which are very different,
but also I want everyone to consider,
and we'll discuss at the end,
what are the common threads,
we have one of them,
which is the challenge
both from the left and the
right to their progress.
But consider, what are
the similar challenges,
the similar narratives,
perspectives, shared by all these?
So we'll begin with
SodaStream and a quick video.
- [Reporter] Here's one
commercial millions saw
during the Super Bowl.
- Mix in the perfect flavor.
Look, soda that's better
for you and all of us.
- [Reporter] Johansson endorses SodaStream
and for years served as
a spokesperson for Oxfam,
a group fighting global poverty.
But Oxfam recently told Johansson,
her work with SodaStream was incompatible,
because it operates a
factory in what they call,
the occupied West Bank.
- This is the plant at the
heart of the controversy.
It's about a 20-minute
drive outside of Jerusalem
and it's become the target
of the BDS movement.
BDS means boycott,
divestment, and sanctions.
The factory employs 13 hundred workers,
500 of them are Palestinian.
Some in the BDS movement
and groups like Oxfam
would like to shut the factory down.
SodaStream's CEO says they
should come to his factory.
- I say they should come here
and look my workers in the eye
and then tell me that they
wanna close the factory.
'Cause you know, it's easy
to wanna close the factory
when you're sitting behind
a Oxfam desk in New York,
or wherever they sit, and
claim that we are the ones
who are hurting human rights.
- [Reporter] Oxfam claims,
businesses such as SodaStream,
further the on-going poverty
of the Palestinian communities
that we work to support.
Yet SodaStream workers, who
make three to four times
what other Palestinians
make in the West Bank,
tell a different story.
- We love SodaStream.
We need SodaStream.
Where do we go after this job?
- Anyone have a SodaStream at home?
So SodaStream is a unique
company, in that today
if you go to the Negev in southern Israel
and walk into their factory,
you will see a scene similar to this,
which was taken the summer of 2018.
Which is Israelis and
Palestinians working together
on a factory line.
And what I'll add in there,
it's not just Israeli workers
supervising Palestinian labor.
There are Palestinian foremen and managers
on the SodaStream factory
floor, which is quite unique
within the conflict and within the region.
Now how did we get to
this place of SodaStream,
which Daniel Birnbaum who you
saw at the end of the clip,
and factors heavily into the case,
refers to as an island of
peace within the conflict.
An example of cooperation
between Israelis and Palestinians
coming together in business
to change the facts on the ground
and change narratives around cooperation.
It began with I think, much lower sights.
So SodaStream, and you
saw a clip from 2013,
of when that factory was
originally in the West Bank,
began hiring Palestinians
because of a lack of labor.
It wasn't a principled move.
Daniel Birnbaum, when he became CEO,
needed additional labor to
deal with growing demand,
and hired Palestinians.
Very quickly though, I think he realized
that there was something there.
That Israelis and Palestinians
could work together.
There were of course challenges.
Some Israeli employees initially
quit the West Bank factory
when Palestinians were introduced.
And you had challenges, coming
both from the left and right,
to this experiment.
So SodaStream moved from something
that was originally using
Palestinians as additional labor,
into them becoming an
important part of the company,
serving as foremen, as floor managers,
getting full health benefits,
commensurate of that provided
by the Israeli state system.
But as soon as that began, and soon after,
as you saw in that clip,
there were challenges
from both the left and the right.
On the left as you saw was BDS,
which looked at something like SodaStream
as normalizing the status quo.
As employing Palestinians,
but not actually making
any fundamental changes
to the political situation
on the ground.
And what it was doing, by
operating in the West Bank,
was just normalizing an occupation.
And this was something that
was heavy enough in pressure,
that depending on who you
believe in the decision making,
but something that I lean
towards, was a significant factor
in SodaStream leaving
the West Bank altogether.
The second was on the Israeli right,
which saw Israelis and
Palestinians working together,
as fundamentally challenging
the narrative of the conflict.
So very interestingly it
was even once SodaStream
left the West Bank, for
a new factory in Israel,
they brought their
Palestinian workers with them.
They worked with the Israeli government
to get work permits to bring
the Palestinian workers
along with with them to the Negev.
So I think there's two reasons for this.
One is they were fundamental
to the production process.
They were skilled labor.
They were in management positions.
And two because Daniel
Birnbaum had begun to see
this cooperation as something
that could actually be
influencing consumers.
If you have a SodaStream now,
and you look on the back
of the box it comes in,
you'll see that it says,
produced by Arabs, and Jews,
and Israelis, working
together in peace and harmony.
So again, it was a way to
actually change the narrative
around the conflict.
But, when I first started
getting involved in SodaStream,
and this is in 2016, they had
just had their last employees
in the Israeli factory,
the last Palestinian employees,
lose their work permits.
And there's this question,
and Birnbaum became
a very outspoken critic
of Prime Minister Benjamin
Netanyahu over this,
about these permits being canceled.
If you ask Birnbaum, the
reason they were canceled,
was because for the right,
for those who were not looking
to change the political status quo,
not looking for cooperation,
it represented a threat
to that narrative.
So the Palestinian
workers were reinstated,
in waves after a heavy pressure
campaign by SodaStream,
but it showed that it was a
capricious solution at best,
both on the left, BDS, who
still criticizes SodaStream.
And there are several Nordic countries,
before this factory was
moved, that wouldn't accept
SodaStream products made in the West Bank.
They had to outsource it to China.
But also on the right, if you look at
Prime Minister Netanyahu
and the idea that,
well why would we bring Palestinian labor
into Israel when we have
the unemployed in Israel
continues to be a challenge to it.
But I think what you see from
the example of SodaStream
is the ability to influence the status quo
on a grassroots level.
You're able to build business
and people-to-people connections
that actually change the outlook.
And it's quite interesting,
and there's some quotes in the case,
about if you speak to folks, both Israeli
and Palestinian who work at SodaStream,
to hear how their outlook on the conflict,
and on the other side the other,
changes by actually working together.
Having Palestinians manage Israelis,
Israelis manage
Palestinians, and as you see,
sit together on the factory
line for hours every day.
So this, I think if you look
at it, Birnbaum would say,
he's trying to operate outside
of the political process.
This is about business.
This is about what he thinks is right.
But if we think about the realities,
it is inherently political,
because you are challenging
the facts on the ground.
And I think both the reaction
of the left, with BDS,
and the right, with work
permits being canceled
and this being challenges
bringing Palestinians
into Israel, show exactly that.
SodaStream today, continues
to operate in this way,
but has to inherently be
political to renew work permits.
It needs to lobby the Israeli government
and it further needs to
lobby those aligned with BDS
to show that what they
are doing is not actually
normalizing an occupation.
And it shows, even examples like this,
which you would think is straightforward,
you have Israelis and
Palestinians working together,
it can become very fraught,
and very political, very quickly.
And adding to the complication recently,
I believe the summer of 2018,
SodaStream was sold to Pepsi.
So they are now a subsidiary of Pepsi
and it leads the question, at what point
do the needs of a business
trump whatever social good
it's trying to promote,
or social mission it has.
So, so far, SodaStream's
kept up with the model
of having Israelis and
Palestinians together.
But the question remains of,
will Pepsi have the stomach
to continue that in the long run?
The next I wanna jump into is Rawabi City.
And Rawabi City, and we'll
hear from Bashar al-Masri,
who's actually the nephew
of Munib al-Masri, shortly.
But Rawabi City is the first
planned city in Palestine,
and in the West Bank specifically.
The most significant construction project
in terms of scale, that's
really ever been undertaken
in the West Bank.
- I feel more of a politician sometimes
than a business person.
Politics is all over us,
you cannot take the politics
out of the Palestinian lives,
not just business people.
With Rawabi it was
difficult for the Israeli,
that Israeli propaganda,
the negative propaganda,
to paint Rawabi they way they paint
the whole Palestinian situation.
One of the most important issues of Rawabi
is the Palestinians' feeling of pride,
that yes we can take
matters with our own hand,
despite the fact that
we're under occupation,
we don't have to give in to
the occupation and leave.
We can defy the occupation
and build on our land.
Of course it's also a great message
to the international community
that we are sophisticated people.
We're not just as we are
perceived the terrorists
and the victims.
We are the victims that's for sure,
but we're not simply
terrorists, we're just people
who are fighting for our rights.
And now we are working
hard to build our nation.
140,000 Palestinian workers
every day cross into Israel,
to work in Israel.
Are they normalizers?
Of course they are.
Do they have a choice?
They have a choice of being
unemployed definitely.
And what I'm doing with normalizing
is I'm creating credible
jobs for these people,
so they're not humiliated.
They're getting salaries, higher salaries.
They're getting their rights.
And IT professional does not need to work
as a gardener, or as a laborer in Israel,
when they can work here as a programmer,
which is what they studied to be.
The ultimate evil is
the settlers of course.
And then the occupation,
which is the cover
for the settlers.
We don't have issues with
the ordinary Israeli people.
The settlement movement is
an ideological movement.
In the core of it, we
should not exist here
and they should be on this land.
Ironically, we found it was
Israelis and pro-Israelis
that lobbied our case.
The water crisis was resolved
by pro-Israeli groups
and Israeli groups, and
some even Israeli officials,
including the late President of Israel,
who was calling his Prime
Minister and his Defense Minister
and say, why aren't you
giving water to this city?
So perhaps you could see
this as an alternative way
of struggle and to reaching your rights.
- So if SodaStream was
meant to be incremental
in changing the facts on the ground,
by bringing Israelis and
Palestinians together,
and promoting understanding.
Rawabi was meant to shift
the status quo altogether.
As you can see, this
is a picture of Rawabi,
taken during construction.
It's a massive endeavor.
It's meant to be a planned
community for 40,000 residents.
Schools, hospitals, and also
employment opportunities all within.
And if we think about the three options
that we discussed at the beginning
available to the private sector,
Bashar al-Masri basically
looked at them and said,
well what I'm going to do
is totally remove myself
from a flawed political process.
I'm going to build on
land that is in area A.
So if we think about Israeli
territory in the West Bank,
there's area C, which is
administered by Israel.
There's area B, which has
security oversight by Israel.
And then area A, which is
completely under Palestinian authority.
And he said, to remove myself
from the political process,
I'm gonna build only in area A.
And what I'm going to
do is create a community
that changes the status
quo on a couple levels.
One is I'm going to change the
economics of the West Bank.
Right now we have 3,000
university graduates per year
in the technology fields and we're unable
to sufficiently get jobs for all of them.
So I'm gonna promote a tech hub.
What I'm also going to do
is change the narrative
around Palestinians.
No longer are we going to have to go
and cross into Israel for employment.
We're going to have
employment opportunities
here in the West Bank.
Now, getting back into the
political side of the conflict,
very quickly, something that
was meant to be fully removed
from the political process,
Masri went as far as to build
only on area A to ensure
this, became highly political.
There was of course the detractors,
and he spoke a little bit about
this, on the Israeli right.
Settlers who saw this as a challenge
to Israeli sovereignty over the West Bank.
And they provided more of a nuisance
than an actual challenge,
when it came to it,
but were certainly an opposing force.
The second being BDS, which
looked at this and said,
well what you're doing is again
normalizing the occupation.
Though you're improving
the material conditions
of those who live in
Rawabi, you are normalizing
the same conditions.
You're making life under the
same occupation more bearable.
And then there was the third one,
that in a contested geography like this,
even when you build on
Palestinian territory in area A,
you still are deeply connected
to an Israeli political system.
So you heard Masri talk about water.
One of the major challenges
that faced Rawabi
was actually getting water
access through area C.
And for a long time,
construction of the project,
and having residents moved in, was delayed
because the Israeli government COGAT,
which administers the
territories, did not approve water
to be sent over.
So it actually took pressure,
from both the Palestinian side,
and as you're heard the Israeli left,
including Shimon Peres,
to get the water approved.
But even now, with Rawabi
welcoming its first residents,
with water flowing to the city,
with the tech hub up and running,
it remains a highly-political
process to ensure its success.
So one of the things that you'll notice
on this photo of the city,
is how narrow the road is
leading into Rawabi.
For a city of 40,000 people
it has a two-lane road,
so car on either side, coming in and out.
And this can create
massive traffic buildups,
when you have folks coming into Rawabi
for a concert or an event.
And again it will depend on
the Israeli administration
to approve expanding this road.
And even having residents cross
from a major Palestinian
city like Ramallah,
through area C, back into
area A to go to Rawabi.
So again, even when you change
the conditions on the ground,
when you try to insulate yourself
from the political process
within this conflict,
it's quite hard to do so.
At the same time, what
Masri is hoping to do
is change the status quo.
If you're able to create this
and have it be successful
then you influence the
political process in turn.
You see what Rawabi could be,
multiplied 10 over, 20 over,
which is a Palestinian state.
You start on a small basis, as an example,
and then you move forward
with the opportunity to show
what Rawabi could be,
and ultimately what a
Palestinian state could be.
Now we're slightly tight on time,
so I'm going to go through
the video we had for EcoPeace.
But this gets back to that original photo
that I showed when we started
thinking about the geography
of Israel and of Palestine.
This is a photo in Gaza
City of the Mediterranean.
So again, after conflict,
limited electricity,
the ability of Gaza to process
garbage, sewage, et cetera,
is quite limited.
And what this does, is not
only impacts their coastline,
but goes up the coastline towards Israel.
And moreover, if you're
thinking about ground water,
which is another key water
source within the region,
it can seep across the border from Gaza,
into aquifers in Israel.
And what this points
out, and what EcoPeace,
which formed in the wake
of the Oslo Accords,
to actually bring
Palestinians, Jordanians,
and Israelis together, the first NGO,
and really the only lasting one to bring
those three groups
together, is to recognize
that even if the conflict
creates disengagement,
even if Gaza is separated from Israel,
the demarcations of
the state, don't define
the actual geography
of it, the environment.
And what they've basically
come and looked at
and seen that even you
have a political process
that is flawed, that isn't moving forward,
you can't disentangle
the environmental implications of this.
So one of their main focus projects
has been looking at
the connection of water
between Israel and Palestine.
Finding ways for Israelis and Palestinians
to improve and work together
to improve the environment,
particularly water.
So Gaza is a great example
of this because Israel,
despite being fully disengaged from it,
has had to recognize the
environmental implications
of what's occurring in Gaza,
the destruction of capital infrastructure,
of the lack of electricity, et cetera.
But they've taken it a step further too.
We're having this idea
of you have to leverage the environment,
or pay attention to the environment
because of the connection.
They've taken it a step further and said,
well if we have a fundamental connection
through the environment, is there a way
that we can introduce a business,
regardless of the political process,
to actually take that
reality of environmental
interconnectedness, and use it as a way
to create cooperation.
And there's this idea,
and I encourage you all
to go into the case
and read more about it,
but an idea by Gidon
Bromberg, who is the founder
and Israel head of EcoPeace Middle East,
of a water/energy nexus.
Looking at the differences between
the environmental resources
of Israel, Jordan,
and the Palestinian territories in Gaza,
and finding a way to create an
actual and business incentive
for them all to collaborate.
So Gidon looks at the situation and says,
Jordan is limited in its
water, but it has huge amounts
of low-cost electricity
because of its deserts
and solar energy.
What if there is a way to have Jordan send
its low-cost electricity across Israel
into a place like Gaza, which
has access to ocean water
which can be desalinated.
Use that electricity to produce,
at low-cost desalinated water,
which is then sent back
to Jordan via Israel?
Is there a way to align
business incentives
within an environmental context,
you have a problem with water scarcity,
and electricity being
scarce, is there a way
to combine these incentives,
to find a solution
that brings all the principals together,
from an environmental perspective?
So that's something that,
when we first talked to him
in the summer of 2018,
was in its infant stages,
but he continues to push on,
as a way to take the
realities of the environment
of scarce resources and
create cooperation from that.
So very quickly, this I think
is scratching the surface
of a lotta what's in the case.
And I do hope you'll all take
the time to go through it.
But to summarize and go through
the lessons learned quickly,
I think the things that stick out to me,
and the things to
consider is how hard it is
for business to have a
political impact on the conflict
because one, the arguments
about normalizing the status quo
actually ignore the way
that it changes over time.
Oftentimes, on both criticisms
from the left and the right,
you'll hear about
normalizing a status quo.
But how do we actually
define that if it's changing?
And a few examples is
the economic divergence
between the West Bank and
Gaza, and then also from Israel
and the West Bank and Gaza.
A water crisis and general
humanitarian crisis in Gaza
growing worse and worse, and
its environmental implications.
And then also the changing
regional geopolitics.
The fact that the principals,
who would have supported
the Palestinian cause,
perhaps more stringently,
thinking about the Gulf
countries especially,
are no longer as involved or as focused.
The second is, there's neither
sticks or carrots present.
If you're thinking about Israel,
and you're thinking
about being in Tel Aviv,
it feels quite removed
from the conflict nowaday.
If Israeli's economy is thriving
and most business leaders
are not seeing necessarily
the impetus for a change,
particularly on the Israeli side,
then what is the real incentive there?
It has been dangled, you
know since the Oslo Accords,
of accessing Gulf markets,
but if you're having other
factors in the region, such
as alliances against Iran,
bringing countries like
Israel and Saudi Arabia
closer and closer together,
then is there a need
to actually resolve the conflict?
And additionally, as
Professor Shapiro talked about
in the context of BTI,
there isn't a K-Group.
When you have such a diverse economy,
even an organization
like BTI only represents
a fraction of the interests involved.
The last one is the fact
that political neutrality
in a conflict like this is not an option.
And again, getting back
to the point about why,
even when you're within
the political process,
and without the political process,
you can't wring the
politics out of politics.
Even something like Rawabi,
which is meant to be
outside of the status quo,
outside of the political process,
is inherently political.
So I think what to step back and look at,
from both of these three examples,
and the additional examples in the case,
is the best option forward
is to actually look
at scalable demonstration projects,
projects that operate on a smaller scale,
and use them as an example
that can be built on
to have a positive impact.
For business leaders to start small
and use that to influence
the political process
as it moves forward.
And I think these three,
though all very different,
are an example of that.
So what I'll do now is hand it back over
to Professor Shapiro, to talk about
some of the more conceptual components
that we have learned about.
- Thank you very much Nick.
(audience applauds)
Thank you.
So as he said several times,
he's really scratched the surface
of this incredibly rich case,
that he has done most of the heavy lifting
to put together.
He spent, I don't know how he
graduated from Yale College,
'cause he must have
spent half of his time,
when he was supposed
to be in classes here,
wandering around the Middle East.
But nonetheless, I think that
the place to start is where he ended.
When you look at these conflicts there are
these endlessly repeated phrases
and they're repeated so
often that you have to wonder
whether they have any real referent.
One is that the two-state solution is,
everybody repeats it as the only option,
whereas it's clearly the
case that it's not an option.
And it hasn't been an
option for a long time.
And so, that's something to think about.
But the other is this idea of
normalizing the status quo.
And the thing about the phrase
normalizing the status quo,
it sounds like what you're normalizing
is the absence of change.
But in fact, there was a very famous paper
published in 1975 by a Yale
faculty member now retired
called The limits of consensual decision,
in which he talked about the
concept of utility drift.
And he had in mind the fact
that making things hard to change,
also makes it hard to change things
if the facts on the ground change.
So the American founders
made the Constitution
very difficult to change,
but that doesn't mean
that we are locked into the
world as it existed in 1787.
On the contrary, the
facts on the ground change
and then that can bubble up and influence
the way in which people
think about the status quo.
And so, a few things just to highlight
that have come out of
Nick's presentation here,
and earlier discussion the failure of BTI.
One is I think you cannot overstate,
and this is not just Israel or Palestine,
but the issue of water in the
upcoming years and decades,
across the Middle East and North Africa,
that are either gonna
create catastrophic crises,
or force greater integration.
The fact is, what EcoPeace is doing,
and by the way EcoPeace
has been around 30 years.
It has directors from Jordan,
Palestine, and Israel.
It's a genuinely tripartite organization.
But they are raising
capital for the project
that Nick talked about,
that is essentially
going to produce cheap
electricity in Jordan,
to supply water for Gaza
to manage its sewage,
so that Israeli desalination
plants can actually operate.
And it's an example of the crisis forcing
forms of cooperation that
hadn't even been thought about
five years ago.
Another, you get a brief
sense from the Rawabi story,
is that most outsider's
perception of Palestinian workers
are laborers who will be going
and working on building sites in Tel Aviv.
But in fact, there are a
number of universities now
in the West Bank,
graduating 25 hundred
software engineers a year.
These are people who are well educated
and are employable in many walks of life.
Yadin Kaufmann in one of the
other things we mentioned
in the case has created something called
the Palestinian Internship
Program, where people in,
by the way Bashar al-Masri was
one of the people who did it,
you spend a, Palestinian
goes and spends a year
in an Israeli tech company,
and then has to go back.
And several of the startups in Rawabi
are by graduates of, their tech startups,
by graduates of the PIP,
the Palestinian Internship Program.
He has also started a
venture capital fund,
with no Israeli money,
so it can't be seen as neo-colonialism
to fund Palestinian
startups in the West Bank,
particularly in Rawabi.
So again this is, it's
producing a new population,
a new generation of Palestinian youth
with very different education, background,
and credentials, and aspirations.
And these people are
growing, they're multiplying.
By the way, it produces some over things
that BDS doesn't like.
Like growing inequality
within the West Bank,
because you're seeing a much
more differentiated economy.
And by the way, considerable
divergence between
the economies of the West Bank and Gaza.
Furthermore, the far right wing Israelis,
their agenda for a long
time, as in the video,
has basically been to
make life so unpleasant
for the Palestinians,
that eventually they will go to Jordan.
But the truth is that because
of the economic dynamism
in parts of the West Bank,
and the sorts of things
like Rawabi you're seeing,
is that the per capita
income in the West Bank,
not only is diverging
from Gaza, but is actually
soon going to equal and exceed
the per capita in Jordan.
So you may well start to see
the settlers' worst nightmare,
you may well actually start to
see Palestinians from Jordan
coming into the West Bank.
And so this is another example where,
the word status quo suggests no change,
but in fact the change on the ground
is likely to start
forcing political change.
And as you saw at the end
of the post mortem video,
one of the Palestinian businessmen saying,
actually we have no
problem with one state,
but what we want is human rights.
And I think that this is ultimately
where this conflict is now headed.
That people instead of
continuing to repeat the mantra
of a two-state solution, are
gonna start demanding the vote.
And of course that is gonna
put a very different kinds
of pressures on Israeli politics.
But I think it is clearly a case where,
unlike South Africa, where
the business community
could take a role in finding a settlement
that was potentially there,
but needed assistance
along the way, this conflict
isn't at that point,
but it certainly is heading to the point
at which the sorts of
things that these businesses
have been doing will start
to make new possibilities
come onto the horizon, and
perhaps, which really has to
always happen for these kinds
of conflicts to be solved,
is for the unthinkable
to become thinkable.
Okay we will talk about crisis, crash,
and response, next Tuesday.
(relaxing music)
