A Failed Diplomatic Doctrine

by Ibrahim Warde, Adjunct Professor of International Business

The last U.S. Secretary of State to have expended any political capital on the two-state solution, providing for a Palestinian state alongside Israel, was John Kerry between 2013 and 2017. His successor Rex Tillerson, a former CEO of ExxonMobil, quickly realized that he would have no say on matters related to the Arab-Israeli conflict or to oil-producing Gulf states. 

A close-knit circle of business associates led by Jared Kushner, President Trump’s son-in-law, who had long-standing family ties to Benjamin Netanyahu, oversaw these matters. The group included David Friedman, Trump’s bankruptcy attorney, Jason Greenblatt, a former Trump Organization executive, Avi Berkowitz, an executive in the Kushner Companies, and Sheldon Adelson, the activist casino magnate who strongly believed that the two-state solution, which had provided a glimmer of hope for the Palestinians, would be “a steppingstone for the destruction of Israel and the Jewish people.”

Not surprisingly, the Trump Administration seemed determined to drive the final nail in the coffin of the two-state solution. Policies included moving the American embassy from Tel Aviv to Jerusalem, scrapping the Iran nuclear deal, slashing financial aid to Palestinians, and forcing the Palestine Liberation Organization from its Washington offices.  The signature achievement was the “Abraham Accords” which started when the United Arab Emirates and Bahrain agreed to normalize relations with Israel. Sudan and Morocco followed suit. On the eve of October 7, Saudi Arabia, the most significant player in the Arab world, was considering a similar agreement. Previously the main stumbling block to any significant agreement was a prior solution to the Palestinian question. The new perspective—call it the Kushner doctrine—was that by ignoring it, the plight of some nine million Palestinians would soon be forgotten. 

Weeks before the Trump administration ended, Jared Kushner and U.S. Treasury Secretary Steven Mnuchin met with future investors on official trips to the Middle East. Kushner, who had developed very close ties with Mohammed bin Salman, Saudi Arabia’s Crown Prince and de facto ruler, created a private equity fund called Affinity Partners. He received 2 billion dollars from Saudi Arabia’s sovereign wealth fund known as the Public Investment Fund (PIF).  Mnuchin created a private equity fund called Liberty Strategic Capital and received commitments for $500 million from investors in the United Arab Emirates, Kuwait, and Qatar. 

Kushner had promised in an interview with CBS News that his deal-making efforts would “make the Middle East safer.” However, the primary beneficiaries appear to be neither the Palestinian nor the Israeli people.

This piece was submitted for publication on October 25th, 2023.