18-Aug-12: Why the Palestinian Arab economy remains so weak - and what this means

Construction site in Israeli city of Maale Adumim

Let's start with a quotation:

The Palestinians could have built one of the best economies in the region after the beginning of the peace process in 1993. But instead of using the billions of dollars that were given to them by Americans and Europeans to create new jobs, the PLO leadership stole most of the funds and later blamed Israel for damaging the Palestinian economy. Suicide bombings and financial and administrative corruption are the main reason why the Palestinian economy remains as weak as ever. The Palestinians are experts in shooting themselves in the foot and then blaming Israel.

We know little about Hisham Jarallah other than that he is described as a journalist based in the West Bank and that he wrote the words above. Few Palestinian Arab voices have been heard that speak plain sense about the central role that people's personal welfare plays in the way they relate to Arab/Israel conflict. His appears to be one. The Gatestone Institute published his article on their website yesterday. The title - not so politically-correct but absolutely justified - is: "How Palestinians Keep Shooting Themselves in the Foot".

Instead of using the billions of dollars that were given to them by Americans and Europeans to create new jobs, the PLO leadership stole most of the funds and later blamed Israel for damaging the Palestinian economy... [Meanwhile] as the Arab countries continue to impose strict employment restrictions on Palestinians, Israel is opening its doors to Palestinian workers from the West Bank. Palestinians say, in fact, that Israel is becoming one of the largest employers of Palestinians in the Middle East.

He refers to data released this past week by the Palestinian Central Bureau of Statistics in Ramallah. They show some 80,000 Palestinian Arabs are now working in Israel, including the demonized "settlements". There has been modest growth in the past year, and then last week Israel's government issued work permits to 10,000 more Palestinian Arabs from the West Bank.

The move has been received with a sigh of relief among Palestinians, especially as it comes on the eve of the Muslim holiday of Eid al-Fitr, marking the end of Ramadan. The figures also showed that Palestinians employed by Israelis earn more than those who work for their Palestinian brethren in the West Bank and Gaza Strip. A Palestinian construction laborer often earns more than a senior ministry official in the Palestinian Authority government in the West Bank or the Hamas administration in the Gaza Strip.What is interesting about the bureau's report is that the number of Palestinians working in Jewish settlements has increased despite calls from the Palestinian Authority to boycott the settlements. 

Billions of dollars have been handed over to the Palestinian Authority in the past decade, but the results are thin and few. Arab governments routinely pledge undying support to the their Palestinian Arab brothers and when the spotlight has moved on, quickly forget their promises and commitments. Jarallah notes that Lebanon, Egypt, Kuwait and Jordan impose apartheid-like restrictions on their Arab brethren from Palestine, 

This strategy needs to be viewed in connection with the decades-long history of Palestinian Arab kleptocracy. That's the process of theft and pillage practiced by the Arafat circle and then later (until today) the Abbas circle: they help themselves to the bulk of the goodies arriving as international aid, ensuring their personal enrichment while consigning their fellow Palestinian Arabs to the dust-heap. Understanding how the massive inflow of aid money and foreign contracts has made the decision makers in Palestinian society rich and their towns and communities poor is a necessary step to comprehending how and why this ongoing war goes on. Why would these 'leaders' ever want to see the bonanza end?

Munib R. al-Masri, a business tycoon, is generally regarded as the wealthiest Palestinian Arab alive today. In 2005, The Atlantic magazine ran a major piece entitled "In a Ruined Country: How Yasir Arafat destroyed Palestine" [here]. It focused on some comments made by al-Masri. Hear now what he said:

The money [Arafat] spent to buy the loyalty of his court, al-Masri gently suggests, could easily have paid for a functioning Palestinian state instead. “With three hundred, four hundred million dollars we could have built Palestine in ten years. Waste, waste, waste. I flew over the West Bank in a helicopter with Arafat at the beginning of Oslo, and I told him how easy we could make five, six, seven towns here; we could absorb a lot of people here; and have the right of return for the refugees. If you have good intentions and you say you want to reach a solution, we could do it. I said, if you have money and water, it could be comparable to Israel, this piece of land.”

The reality was always quite different from the vision. 

"For those at the top of the heap the rewards were much larger and more systematic. The amounts of money stolen from the Palestinian Authority and the Palestinian people through the corrupt practices of Arafat’s inner circle are so staggeringly large that they may exceed one half of the total of $7 billion in foreign aid contributed to the Palestinian Authority. The biggest thief was Arafat himself." [The entire September 2005 article is very long but worthy of your attention.]

[H/tip The Palestinian Failure, by A. Jay Adler.]

Why is it that the proclivity of the Palestinian Arabs over decades to consistently and repeatedly shoot themselves in the foot gets so little analytical attention?