Soccer Dad

Palestinian Arabs in the West Bank Do Their Best Work When Abbas Sits and Does Nothing

"I will wait for Hamas to accept international commitments. I will wait for Israel to freeze settlements..."
Mahmoud Abbas

The International Monetary Fund has recently concluded that the West Bank's economy has improved dramatically in the last year. Michael Oren, Israel's newly-minted ambassador to the United States, recently pointed out in a Wall Street Journal editorial that six thousand new jobs have been created since 2008, trade with Israel has increased 82%, tourism to Bethlehem has increased 94%, and agricultural exports are up 200% -- all the result of a fusion between smart Palestinian planning, the Netanyahu government's relaxed trade policies, and its continued dismantling of military checkpoints.

In that article in the Wall Street Journal, Michael Oren gives other details, including that more than 2,000 new companies have been registered in the West Bank with the Palestinian Authority since 2008. And the reason for the success?

Much of this revival is due to Palestinian initiative and to the responsible fiscal policies of West Bank leaders--such as Prime Minister Salaam Fayyad--many of whom are American-educated. But few of these improvements could have happened without a vastly improved security environment.

While Oren gives credit for the improvement in security to General Dayton's Palestinian security forces, the fact remains that Israeli steps first created the potential for security out of the chaos that is was(!?) the West Bank.

Oren also describes the difference between the political and economic pursuit of peace:

The West Bank's economic improvements contrast with the lack of diplomatic progress on the creation of a Palestinian state. Negotiators focus on the "top down" issues, grappling with legal and territorial problems. But the West Bank's population is building sovereignty from the bottom-up, forging the law-enforcement, civil, and financial institutions that form the underpinnings of any modern polity. The seeds of what Israeli Prime Minister Benjamin Netanyahu has called "economic peace" are, in fact, already blossoming in the commercial skyline of Ramallah.

And don't forget that this is not the first time that the Palestinians have had the means and the opportunity to flourish during the past 60 years.

For instance, Efraim Karsh has written about the success of Palestinian Arabs before the Intifada:

The larger part, still untold in all its detail, is of the astounding social and economic progress made by the Palestinian Arabs under Israeli "oppression." At the inception of the occupation, conditions in the territories were quite dire. Life expectancy was low; malnutrition, infectious diseases, and child mortality were rife; and the level of education was very poor. Prior to the 1967 war, fewer than 60 percent of all male adults had been employed, with unemployment among refugees running as high as 83 percent. Within a brief period after the war, Israeli occupation had led to dramatic improvements in general well-being, placing the population of the territories ahead of most of their Arab neighbors.

...During the 1970's, the West Bank and Gaza constituted the fourth fastest-growing economy in the world-ahead of such "wonders" as Singapore, Hong Kong, and Korea, and substantially ahead of Israel itself. [emphasis added]

the Palestinian territories had one of the ten fastest growing economies during the 1970's, just behind Saudi Arabia (which benefitted from the oil shock of 1973), and ahead of Singapore, Hong Kong and South Korea. (World Bank, ratio of real per capita GNP in 1980 to real per capita GNP in 1970)

the industrial parks which the leadership of the [Israeli] Foreign, Industry and Finance Ministries is planning at this very moment, under total secrecy. The goal: to establish between 8 to 11 such parks on the cease-fire line between Israel and the autonomous areas, which the Palestinian Authority will control within the next few months.

Foreign Minister Shimon Peres is the one who envisioned all this, and those close to him say with pride: We are getting closer to Singapore, Taiwan and Hong-Kong, in huge steps.

And then, after the vision arrives to develop the cities Gaza, Dir Al- Balah, Ofakim and Sderot it will be copied in the cease-fire line between Afula and Jenin, to Mt. Hebron and Tul-Karm, and will reach the entrance of Kochav Yair.

Each industrial park will be established for about 10,000 employees, and will sit on 2,000 dunam of land, with considerable financial assistance from foreign investors and also governmental subsidies. The Palestinians will run them, and be its workers, for the most part.

The difference between what was possible then and what Gaza suffers from now under the Hamas terrorists is stark--and the difference today between Gaza and the West Bank will not be lost on the Palestinian Arabs suffering under Hamas rule. After all, there are just so many times that Hamas can blame Israel for its failures--especially when Israel is creating the possibility for the West Bank's successes.

Oren writes:

The vitality of the West Bank also accentuates the backwardness and despair prevailing in Gaza. In place of economic initiatives that might relieve the nearly 40% unemployment in the Gaza Strip, the radical Hamas government has imposed draconian controls subject to Shariah law. Instead of investing in new shopping centers and restaurants, Hamas has spent millions of dollars restocking its supply of rockets and mortar shells. Rather than forge a framework for peace, Hamas has wrought war and brought economic hardship to civilians on both sides of the borders.

Meanwhile, in the West Bank there is perhaps a growing realization that Netanyahu's 'economic peace' may be succeeding where others--including Obama--have failed:

Fayyad told Haaretz this month that he realized that "security was the glue between a thriving economy and proper government and achieving liberty for the Palestinian people." (On the question of whether or not Israel is a "Jewish state" -- an admission Netanyahu has been adamant about getting from the Palestinians and which he has hitherto been denied officially -- Fayyad sounded more Zionist-friendly than the New York Review of Books typically is: "The character of Israel, as the total character that Israel would like to have, is Israel's own choice.")

Back in May, Abbas said in his interview with Jackson Diehl of the Washington Post:

"I will wait for Hamas to accept international commitments. I will wait for Israel to freeze settlements," he said. "Until then, in the West Bank we have a good reality . . . the people are living a normal life." In the Obama administration, so far, it's easy being Palestinian.

Abbas will continue waiting, assuming that everything he wants will fall into his hands. However, if it is not Israeli concessions but rather Israeli contributions to the reemerging Palestinian that make the news, Abbas will find that the Palestinian Arabs of the West Bank are growing tired of waiting for him.

On a cautionary note, George Gilder writes in The Israel Test that historically foreign aid intended for economic recovery is conducive to corruption and failure, rather than economic growth. When I emailed him about the apparent challenge that the West Bank poses to that rule, he responded:

Hey, when you have a 40 to 60 percent drop in output in the midst of violence, it is relatively easy to get a rebound when calm returns and you have Netanyahu both standing firm against more concessions to terrorists and declaring his determination to open new opportunities for enterprise in the territories.

If Netanyahu's broad based economic recovery for the Palestinian Arabs is successful--and Gilder is a big admirer of Netanyahu's economic know-how--then maybe this time around the apparent Palestinian economic renaissance will be permanent, and auger better times to come in the region.