TERRORISM AND THE PALESTINIAN ECONOMY

Terrorism and the Palestinian Economy by Noah Pollak (Contentions)
Those who have taken it upon themselves to be the permanent caretakers of the Palestinian cause have found, in the abysmal condition of the economies of the West Bank and Gaza, their latest mission. The U.N., the World Bank, and a new British government report are all in agreement that a major obstacle to peace is the Palestinian economy, and the major obstacle to its improvement is, of course, Israeli security measures.

The saviors of Palestine never wish to deal with the behavior of the Palestinians themselves; thus, they have come forward with a set of economic development proposals that predictably avoid addressing the central problem with the Palestinian economy: Palestinian terrorism. Last week, the British government released a much-anticipated report that had been commissioned by Gordon Brown in 2005. It proposes five “building blocks,” the third of which states that “the right balance must be struck between short-term security and allowing movement and access,” and goes on to argue that Palestinian economic development will increase Israel’s security. Yet who, exactly, is going to decide for Israel the “right balance” between its own security and Palestinian freedom of movement? If the authors of the British study had their way, this “right balance” would involve many more buses and restaurants blowing up in Tel Aviv. Thankfully, however, the British do not set Israeli security policy, so their nattering on about it is almost totally irrelevant. The rest of the British study, a full version of which is available here, is a similarly unimpressive recitation of platitudes.

The just-released World Bank report stipulates three “preconditions for growth” for the Palestinian economy: “(1) a drastic improvement in the security environment; (2) dismantling restrictions on the movement of Palestinian people and goods; and (3) clear progress on Palestinian reform and institution-building.” The authors seem unaware that preconditions (1) and (2) are at war with each other: any serious fulfillment of point two will have the immediate consequence of undermining any progress on point one.

The World Bank report details how terribly the Palestinians have damaged themselves. Since the start of the terror war in 1999, per capita GDP has shrunk by one-third; “GDP is being increasingly driven by government and private consumption from remittances and donor aid, while investment has fallen to exceedingly low levels”; public sector employment has increased by 60 percent, as “workers have been hired as part of a trend to bolster political support”; already-low private investment decreased by over 15 percent between 2005 and 2006; and on, through a litany of indicators of economic decrepitude.

Amazingly, the World Bank also says: “The main challenge for Palestinian economic recovery remains the comprehensive restrictions on movement and access imposed by GoI [the Government of Israel]…that combine to stunt Palestinian economic growth.” A more accurate way to formulate that statement would be: “The main challenge for Palestinian economic recovery remains the ongoing support for terrorism against Israel, which cause comprehensive restrictions on movement and access to be imposed by GoI.” But never mind.

This is how these kinds of things always seem to go. The same people who lobby on behalf of the Palestinians are unfortunately those who tend not to take the Israeli commitment to its own security very seriously. These are people who, in theory, would be well-suited to deliver the message to the Palestinians that any hopes they have for economic or political development are forever doomed so long as their terror war against Israel continues.

My own humble recommendation to the many advocates for Palestine is to insist that a Palestinian rejection of terrorism be a precondition for aid. I realize this is an unrealistic proposal, but so be it—nothing the British government or World Bank is proposing is any more realistic. It’s worth mentioning that, after the Six Day War, when the dark night of Israeli occupation descended on the Palestinians, but before the start of the first Intifada, the GNP of the West Bank grew, from 1968 to 1980, at an average rate of 12 percent per year, and the per capita GNP increased by 10 percent. I wonder if the people who write about the Palestinian economy today know that?