Money in the West Bank: Kushner’s peace plan

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Hello and welcome to the Intelligence on Economist Radio. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events SHAP. Candidates in Argentina's presidential race have filed their intentions to run and there's a familiar name among them, former President Cristina Fernandez de Kirchner. So why is she running for vice president? And what are the odds Argentines want more of her well known brand of populism? And have you got plans to visit America this summer? Be careful what you tweet. Border officials are getting pretty invasive in going through visitors social media accounts. First up though.

We have before us.

A rare opportunity to bring security and stability and peace to this region and to its people.

Even for the man who makes much of his negotiating ability, settling the conflict between Israel and Palestine could be too hard a deal to strike. The person to whom President Donald Trump has delegated this most intractable of political challenges is his son in law and senior adviser Jared Kushner. The President sees it as something that has to be solved, that he very.

Much wants to be solved.

And it's Something that he's personally put a lot of time into trying to see happen.

Today, Mr. Kushner will make his first push to resolve the conflict at a conference in Bahrain. He'll unveil his plan for investments of $50 billion in the middle east, half of it in the west bank and Gaza. The meeting is being overshadowed by simmering tensions between Iran and America. Just yesterday, Mr. Trump announced new sanctions, including on the office of Iran's supreme leader. But as the administration attempts diplomacy in Israel and Palestine, there are more fundamental problems for Mr. Kushner. Neither of those governments will be attending today.

Representatives from America and at least six Arab states are gathering in Bahrain for what the Americans are calling the Peace to Prosperity workshop.

Greg Karlstrom is our Middle east correspondent.

It's a two day event that is the first piece of Donald Trump's long promised ultimate deal for solving the Israeli Palestinian conflict. And this is meant to be the economic piece of it. It's looking for ways to develop Palestine's economy, to improve its infrastructure, and to sort of the Palestinians a peace dividend in the event of a broader deal with the Israelis. Now, ironically not in attendance. The Palestinians themselves, both the Palestinian government and top businessmen from the Palestinian territories are boycotting the event. Nor are any Israeli officials invited to attend. There will be some Israelis there, businessmen there as private citizens, but no one from the government in attendance.

And so what do we know about the details of this peace plan?

We know very little about the political side of Jared Kushner's peace plan. What we do know is a 96 page document that the White House released over the weekend in advance of this workshop, which reads like a report from a consulting firm. It's a laundry list of $50 billion worth of projects for the Palestinian economy. Quite comprehensive. It covers everything from agriculture and tourism, to improving the telecommunications infrastructure, to governance issues like taxation. A lot of it is not new. It's been culled together from decades of work on development in the Palestinian territories. Again, what we don't know is the politics that underpins any of this and how the Israeli Palestinian conflict is actually meant to be resolved.

So why is this plan so squarely focused on the economics, then? In a conflict that has deep political roots, why is there an economic weigh in here?

Well, there are two schools of thought on that. The argument from the White House and from American diplomats is that by starting with the economics, the US Is often offering an incentive to the Palestinians. They're presenting what they call a vision for the future and telling the Palestinians, if you Go along with the political side of our deal. Here is this transformational economic plan that we can offer that will vault your economy into the 21st century. The more cynical take on this would be the economic part is quite easy. Again, there's decades of stuff to draw from here. People have been working on this for a long time. And pouring money into the Palestinian economy is not hard. What's much harder is, is resolving questions of borders and refugees and the status of Jerusalem. And the administration has been postponing that side of the plan for many, many months, perhaps because they haven't quite worked out what they want to do with it yet.

And I guess the Palestinians then are taking that more cynical view, and that's why they're not at this conference.

They are. For the Palestinian view of this, you have to go back about a year, 18 months. Go back to the 1st of December of 2017, when Donald Trump recognized Jerusalem as Israel's capital, reversing decades of precedent in American politics.

While previous presidents have made this a major campaign promise, they failed to deliver. Today, I am delivering.

He then proceeded to cut all forms of American aid to the Palestinians. And then after President Trump recognized Jerusalem as Israel's capital, Mahmoud Abbas, the Palestinian president, rejected his so called ultimate deal. And that has been the Palestinian line ever since.

We said no to Trump.

We will not accept your project.

The deal of the century is the slap of the century.

The Palestinians feel like the US has spent 18 months now beating up on them, is offering this one carrot in the midst of a number of other sticks, and they feel like they have no reason to take this and to sacrifice their aspirations for sovereignty and a capital in Jerusalem and so on and so forth in exchange for $50 billion worth of investment.

Well, what about the Israelis? They aren't going to be at this conference either, as you said, ironically. Why is that?

They're not. And there are two reasons for that. One is because the Palestinians rejected this conference and have rejected Trump's plan. A number of Arab states went to the Trump administration and said, because the Palestinians are not there, because they're boycotting, we're not entirely comfortable attending a conference with high level Israeli officials, but no Palestinian representation. And so the Trump administration in the end, decided not to invite any Israeli officials. But even before that, of course, Israel has now plunged into a bit of political turmoil. There's a fresh election scheduled in September because Prime Minister Netanyahu was unable to form a government after the previous election. And so no one from his interim cabinet, from his mostly right wing interim cabinet was wants to go sit in Bahrain and discuss economic initiatives that would be beneficial to the Palestinians.

And so what about the other half of it then? Do you think the pending political plan can sort of salvage the sort of rocky start for the economic plan?

Well, the first question is if we ever see the political part of this plan, the earliest that could realistically come out now because of the new Israeli election would be November. After the next Israeli prime minister forms a government by November, then we start getting into not only the holiday season but also campaign season in America. And it's not clear if President Trump wants to roll out a major Israeli Palestinian initiative while he's out on the campaign trail. So it may be, and you hear from American diplomats even that they think the earliest the political side of this plan could possibly come out would be a second Trump term.

Thanks very much for joining us, Greg.

Thank you.

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The world has been watching Argentina nervously for months. Elections will take place in October against the backdrop of rising populism and a sinking economy. GDP has shrunk for five quarters in a row. Inflation has been rampant. And last year the country received the International Monetary Fund's biggest ever loan. It might need to borrow more to pay that off. Over the weekend, presidential candidates filed their bids for office. The big surprise came last month, though, when the former president Cristina Fernandez de Kirchner announced she'd be running for vice president rather than president. She'll share the ticket with her lesser known former cabinet chief, Alberto Fernandez. The populist former leader is currently on trial for corruption, but she had been leading the poles trying to fend off the return of Kirchnerismo is Mauricio Macri, the market friendly but unpopular incumbent. Now that the Lineup has been confirmed. The question is whether Argentines will forego pragmatism for Ms. Fernandez's defiant and damaging populism.

Cristina Fernandez de Kirchner left in reality, a crisis of credit and confidence.

David Smith is our Argentina correspondent, reporting from Buenos Aires.

Argentina was locked out from capital markets, for example, running up a primary deficit. Inflation was high, and above all, there was this economy with the truth when it came to what was really going on in the economy. I mean, famously, we had inflation running in the high 20s, and the Christina government was telling people there wasn't inflation.

So her potential return is a matter of some concern for creditors, but more widely as well. Why are people around the world thinking about this election?

Well, I think, first of all, because of the long history in Argentina of capital flight. I think in the event of a Cristina victory this year, we're looking at Argentines, first and foremost, getting out of their own economy. Secondly, and this is a critical one really, is the record loan that Argentina today has from the International Monetary Fund. We're talking almost $57 billion. And the fear that if Cristina returns, then there will be capital flight, but there'll also be the question of whether she'll live up to the IMF loan, which would be sending the world a terrible mess. Should be said. I sat down with her economic guru a while ago and he was insistent that default was not on the cards. But the Cristina government would want to renegotiate the deal fundamentally with the imf, and that would be of real concern to the wider world.

So why is Ms. Fernandez so popular within Argentina then?

Oh, I think we've got to look no further, Jason, than I saw a mother the other day in a grocery store here, clearly counting her pennies, her pesos, to try and buy for her family. And when I asked her how she was doing, she looked at me and she was holding the hand of a little girl, her daughter, and explained to me that it was a choice between food or buying her daughter something at the chemists to deal with the flu. I mean, there, I think in micro, is where a lot of Argentines in the current period are living. I mean, 50% plus inflation now, and this in a country where we already have 30% poverty.

So if Ms. Fernandez has this message that appeals so much to the people who have been hard hit by the economy, why has she opted to run for vice president rather than president?

Oh, I think there's an entirely practical element to that, Jason. Christina's negatives are very, very high in some polls this year. She's been well over 60% of the population viewing her negatively. She's brought in a wily, astute, very experienced backroom operative, Alberto Fernandez. Sorry, it's confusing, but Fernandez and Fernandez now we've got running for the presidency. I don't think there's really any doubt that she will be there calling the shots. I think it also helps that she's on trial for fairly serious corruption charges. She, of course, denies those charges. And as vice president, she could be pardoned by Alberto Fernandez.

So has her bid to be vice president then done anything to calm the markets?

Yes, we've seen in the last few weeks the markets have calmed down. The peso, the devaluation has slowed. The inflation rate seems to be coming down somewhat, although it's still very high. I'm not sure. However, Jason, that's got as much to do with Cristina Fernandez de Kirschner as it is also to do with the government of Mauricio Macri, which has clearly been serving notice that they expect to come out of recession later this year and return to some level of growth.

But despite that, Mr. Macri hasn't really delivered on the promises he made last election to turn the economy around. Right. And that must in turn help the Fernandez Fernandez campaign.

Yeah. The Macri government embarked on a fairly radical path of change, in theory. And yes, they haven't been able to deliver on a number of fronts. And yes, inflation has risen over 50%, interest rates up through the roof, and now that massive emergency loan from the International Monetary Fund. And to stay in line with that debt, he's got to introduce austerity. I mean, the hope, for example, is that the budget will be balanced this year. But at the same time, when you bring in austerity, you actually upset voters. So you can see Mauricio Macri in a bit of a bind, I think. However, the path that the Macri government has walked does hold out the hope that further down the road the country would be capable of the kind of change that he promised three and a half years ago. The problem for him is that he hasn't been able to deliver in the short term and therefore the skepticism, the crisis of confidence in him is also very widespread.

So how's he campaigning then? Having sort of disappointed everyone in his.

First term, he's campaigning out there in terms of the change that he has brought. We're seeing the president looking at new sewers, new roads, looking at new public transport systems, and apart from showcasing such public works, Macquarie has also done something really interesting on the political Front, which is he's gone to his opposition, the Peronist party, the party that's ruled Argentina for so long. And now Macri is selected as his running mate for vice president. Senator Pichetto, the leader of the Peronists in the Senate. This could be a very valuable move come election day, showing as it does Macri reaching out to the opposition and forming a more centrist coalition.

And is there anyone else who could be a contender, or is this really just a two horse race between the Fernandez ticket and Mr. Macri?

There is a third party, a former economics minister, Roberto Lavagna, who has a pretty strong reputation. But I don't think there will be that third factor in this of any substance.

So what would you predict for the election in October, then? Would you expect a Fernandez Fernandez victory?

No, I think this is way too close to call, Jason, and we've still four months to go. I think it's going to come down to the wire as things stand today. And what I'd urge you to understand is that beyond the microeconomic factors, there's a much bigger picture here. This is going to be a race about the future which Macri wants to espouse, a future of change, of asking Argentina to look itself in the mirror and face its issues after so many years of decline or the past. The past being represented by Cristina Fernandez de Kistner and her running mate Alberto, who would very much go back to a bigger government with many more welfare subsidies and welfare programs, looking after people in a traditional Peronist fashion that Argentina has been run for so long. But those decades of decline as they've been, it seems to me, raised the question whether Argentina is ready for change and ready to face the future that Macri espouses. So I think this is still a fascinating race. And I'd offer you the following thought. If you look at the numbers 50% inflation, very high interest rates, and an economy now in deep recession, I think it's quite extraordinary that President Macri is still in the fight with a chance of winning.

David, thank you very much for your time.

Thank you, Jason.

This summer, visitors will head to America to spend time on California's beaches and at Florida's theme parks. But increasingly, they won't just have to watch out for sunburn and overpriced funnel cake. Tourists are now having to watch their tweets.

Leigh Van Bryn was a British tourist who traveled to Los Angeles about seven years ago with a friend.

Adam Roberts is the Economist's Midwest correspondent.

And he made a mistake before he set off he went onto social media, onto Twitter, and he tweeted about his plans to destroy America. And by that he meant he was going to drink a lot of alcohol, he was going to party, he was going to have a great old time. Essentially, he was promising himself and his friends that he was going to have a wild party. But when the deployment Department of Homeland Security saw his posts on Twitter, they were not amused. Immigration officials in America are notoriously without any sense of humor. And they pulled him aside at Los Angeles Airport and they interrogated him and his friend for hours. And the result of that interrogation was that they were suspecting that he was actually planning to destroy America in some other nasty sort of terrorist type way, and they expelled him from the country.

And so the lesson here for users of social media everywhere is that immigration officials in America check all of your posts, even if you're just coming for a swift visit.

Yeah, that's increasingly the case, and probably not only for people going to America, but all around the world, that what you put on social media is now going to be considered for your visa applications. If you come under the ESTA program, the visa waiver program, as most West Europeans can do, you've already been scrutinised because you've been asked, what are your social media handles? In 2017, around 23 million travelers traveled to America using the ESTA program and their social media posts were scrutinised. And now, since June, any category of person visiting the United States has to be completely transparent about their social media handles.

I mean, that sounds like a pretty onerous job for immigration officials to carry out, especially for people that have lots of profiles or a long history on them. How does that actually work in practice?

Well, that's a great question. Nobody knows for sure just quite how the American administrators, the bureaucrats, are going to be able to cope with this deluge of information. If you think that they're looking at 14 different social media platforms, potentially for every applicant, they're potentially looking at 7,000 different languages. It's hard to imagine how they're going to be able to, in any meaningful and responsible way, scrutinize all the applicants in a fair way. So the fear of groups such as the Brennan Centre for Justice that published a report on this just in May, is that this is an excuse to target certain individuals. And so when Donald Trump talks of extreme vetting and targeting Muslims and targeting people that the Americans especially don't like, then officials can use social media accounts to find excuses to keep people out. And so there's really great uncertainty about how information will be stored, how it will be processed and how it will be used.

But in a lot of cases where America goes first, a lot of countries follow. Do you think this will tend towards a global standard?

Well, if you look at one of the consequences of this, it'll be much harder for Americans who are traveling elsewhere to complain. If, for example, they're going to let's pick a country. Let's say Turkey. Say you wanted to go to another democracy, but a slightly authoritarian democracy. What is to stop the Turkish officials from saying, give us all your private information before you can have your visa to come here? So I think absolutely we're going to see other countries adopting the same process.

Adam, thanks very much for your time and be careful out there on social media.

Thank you. I'll be very, very careful indeed.

That's all for this episode of the Intelligence. If you like us, give us a rating on Apple Podcasts and you can subscribe to the economist@examiner.com radioffer 12 issues for $12 or 12 pounds. See you back here tomorrow.