Contesting the neoliberal narrative of Palestinian national liberation

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Sonja Karkar, of Australians for Palestine, writes:

About a year ago, economists Raja Khalidi and Sobhi Samour published a highly critical article on the PA’s neoliberal policies in the Journal of Palestine Studies entitled “Neoliberalism as Liberation: The Statehood Program and the Remaking of the Palestinian National Movement” in which they argued that the statehood program “cannot succeed either as a midwife of independence or as a strategy for Palestinian development” since that program is “predicated upon delivering growth and prosperity without any strategy or challenge to the parameters of occupation.”  In an interview with Electronic Intifada in April 2011, Raja Khalidi explained that even if the PA has met the criteria for statehood eligibility set out in the reports by the World Bank, the IMF and UNSCO, “the real problem is that such criteria and arbitrary thresholds are irrelevant to the reality and to the big elephant in the room of Palestinian governance, namely the Israeli occupation.”  He went on to say:  “What’s going to make this virtual state turn into a real state? Nobody seems to be addressing that. All the talk is about polishing this virtual state, reforming and fixing it, adding services here, privatizing there, saving money here and cutting budgets there. It’s like the manner in which donors and international institutions approach the performance of a normal middle-income country. The PA seems to assume that by the will of the people, the citizens who proved themselves being capable of respecting traffic signals, paying electricity bills and not carrying guns in public, statehood will ‘impose itself’. Somehow statehood ‘just arrives’ in September because technically everything is ready.”   Since these words were written, the Arab Spring has catapulted the Arab world into the headlines, but regrettably says Khalidi, “the Palestinian national liberation movement appears weaker than at any time in the five decades since it was launched. It is hamstrung by Israeli occupation, donor funding cut threats, Arab governments’ and peoples’ distraction with the ongoing uprisings in the region, not to mention growing Palestinian disgruntlement with tight living conditions and weak leadership.”  Nevertheless, Khalidi contends it is possible that a Palestinian spring “is in the making”, but it won’t be thanks to the PLO/PA. He says “by virtue of its neoliberal program and its inability to lead a struggle that delivers independence, the PLO and its allied national bourgeoisie have effectively broken the ‘national-social contract’ and, in a sense, betrayed their historic role.”  Damning words indeed, but Khalidi says these turbulent times could yet give rise to “another set of struggles for social justice and economic equity”.  We can only hope so. The Palestinians have endured enough.

After the Arab Spring in Palestine – Contesting the neoliberal narrative of Palestinian national liberation

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by Raja Khalidi

Jadaliyya
24 March 2012

Over the past year, as Arab peoples in surrounding countries erupted in
protest against dictators, security regimes, and failed social and economic
policies, the Palestinian people living in their occupied homeland have
remained quiescent. Neither have mass protests targeted the Palestinian
“regime’s” policies or negotiating performance, nor has resistance to
Israeli occupation escalated or taken more effective forms.

In contrast to the turbulence and revolutionary potential of the Arab
Spring, has neoliberal ideology, through its economic policy content,
created a Palestinian constituency for normalcy and risk aversion that could
hold back progress in the struggle for national liberation? In exploring the
impact of recent neoliberal economic policies of the Palestinian Authority
(PA) on living conditions and popular political consciousness, the burning
question is whether these have succeeded in creating a people willing to
resist encroachments upon their material gains and the liberal way of life.

Intuitively at least, the eventuality of a neoliberal complacency seems
unlikely, if not absurd, for a people struggling for liberation from a
regime of prolonged Israeli settler colonialism. Any informed observer
cannot but be cognizant of the ravages on social fabric wrought by
neoliberal policies in many countries, including within the
neo/post-colonial range of experiences. To the extent that a the fallout
from the world economic crisis may evolve into a backlash that targets
neoliberal policies and their impact globally and in the region, even if not
necessarily their legitimacy, the need to elaborate a relevant critique in
the Palestinian context becomes compelling.

This leads to a re-examination of conventional Palestinian patriotic wisdom.
This “consensus,” discursively derived from Marxist revolutionary theory,
holds that the Palestinian struggle has yet to reach the “stage” of national
liberation, the PA “self-government” notwithstanding. The “national
project/program,” led so far by a broad coalition of a national bourgeoisie
and salaried middle class, camp-dwelling refugees, rural peasants and urban
workers, has been traditionally invoked to postpone or subordinate pressing
social agendas within Palestinian society by prioritizing independence and
statehood. I enquire as to whether the horizontal range of pending
Palestinian social equity deficits (youth, women, workers, farmers,
depressed regions, etc.) might yet form a new basis to revive a twin
struggle for national liberation and social emancipation in this new (Arab)
decade.

A Shifting Palestinian Constituency for Neoliberalism

Seemingly disoriented by the changing regional landscape and the unexpected
legitimization of political Islam, PLO political and diplomatic moves have
become increasingly tentative and, indeed, contradictory. Over the past
year, the PLO moved seamlessly from the announced “completion” of a two year
“state building” project in the West Bank to an inconclusive national
reconciliation process with Hamas in Gaza, to an international diplomatic
“state-recognition” campaign in the UN (1)  that was self-aborted just as it
was being launched. Most recently, the PLO engaged in an abject return to
failed “exploratory” negotiations with Israel.  Today, with its ammunition
apparently spent, the PLO appears hard put to achieve the national
reconciliation and unity that is widely considered a prerequisite for any
progress in any direction.

The Palestinian national liberation movement appears weaker than at any time
in the five decades since it was launched. It is hamstrung by Israeli
occupation, donor funding cut threats, Arab governments’ and peoples’
distraction with the ongoing uprisings in the region, not to mention growing
Palestinian disgruntlement with tight living conditions and weak
leadership. New forces loom on the horizon, especially an emboldened Hamas
whose Brethren are assuming power around the region, but which is also
experiencing its own crisis owing to the rapidly transforming regional
landscape and recognition that its governance achievements are mediocre, at
best.

Of more recent genealogy, a diffuse, more youthful coalition of social
forces has entered the scene. They are inspired by and learning from the
unfolding revolutionary turmoil among their own young Arab “brethren,”
unencumbered by the legacy of PLO factionalism and generally resistant to
appeals to national unity under the “Leader” and the ruling party. They
could not care less about the supposed gains of twenty years of polite Oslo
politics and are singularly unimpressed by their elders’ claim to have kept
the flame of national liberation alive.

Yet this apparently “unorganized” movement seems to be testing the waters,
uncertain whether strategies should target the PLO or Israeli occupation, or
both, with demonstrations (2) one day outside the Muqata’a (PA headquarters
in Ramallah) and on another day “Freedom Riders” (3) challenging the
Israeli occupation regime. This movement has yet to reconcile itself with
the irony that the mass of Palestinian (poor, refugee) youth are already
“factionalized,” street wise and have been long mobilized by the PLO
leadership and act separately from the newer youth groups.

Yet these are not the only protagonists in the emerging Palestinian
socio-political stand-off. We should not forget the broad swathe of public
opinion and material interests linked to maintaining the status quo, either
fearful of what change may bring or simply unbelieving in the possibility of
positive change. The latter include the Hebron importer who does not want to
lose VIP access to Israeli ports, the PA employee in Ramallah who does not
want to lose the monthly paycheck needed to cover the housing mortgage, the
village worker dependent on the construction job in the nearest Israeli
settlement to be able to refill the newly installed pre-paid electricity
meter, not to mention the PLO veteran from Amman 1970 and Beirut 1982 who
has seen it all go wrong too many times before.

Fattened by a PA governance mode, especially since 2005, that consists of a
rich menu of neoliberal social values and economic policies, security-first
and the rule of law and normalcy, this Palestinian “silent majority” is not
going to be easily persuaded or prodded into any misguided Palestinian
Spring. Even if they are not consciously engaged in neoliberal advocacy,
they constitute, perhaps unwittingly, a solid constituency for not altering
the status quo. One indebted “citizen” summed it up well when speaking to a
Los Angeles Times (4)  reporter: “Now that I have all this responsibility on
me, my main concern is stability,” he said. “I don’t want to see anything
happen that might stop my paychecks.” Such self-interested complacency
highlights the distinctive nature and impact of neo-liberalism (5), which
can at once project an open, forward-looking governance agenda while
entrenching conservatism as regards the diminished role of the state
vis-a-vis the primacy of the market and property rights.

Simply put, awaiting national liberation and without a mobilization towards
that end, many Palestinians seem willing to coexist with, if not defend, the
lifestyle under occupation to which they have become accustomed. They may
not sense the implications that the embedment of neoliberal values in
Palestinian minds and hearts implies for the struggle for national and
social emancipation. But in the wake of a second, militarized and failed
intifada, most of those living under occupation and PA administration meekly
have accepted, if not embraced, the limited focus of the PA on
“self-improvement” that has overwhelmingly defined the Palestinian reform
and governance narrative for the past five to ten years.

Simultaneously, many Palestinians also remain wedded to the premise that
only after national liberation can struggles for democratic representation
and social justice proceed apace. This presumes—or does not challenge
head-on—the need for obedience to a national liberation leadership and the
supremacy of its definition of “national interests.” There has been a clear
public acquiescence with the PA leadership’s demand for improved
“self-governance” in the post-2005 period. But this was largely conditional
(in public reasoning) on a resolution sooner rather than later of the
national question, amounting to a sort of Palestinian national/social
contract
. This “demobilization” of a militant popular resistance movement
into a body of compliant and entitled “citizenry” is a familiar reminder of
how, in other places and epochs, pre- and post-nationalist leaderships
successfully delayed accountability for social or political governance
results.

The confluence of the moment between the unfulfilled national
self-determination aspirations of the Palestinian people, the increasing
audacity of the occupying power, the emerging social and economic
transformation agenda in the region, and, the growing popular contestation
of the PA regime all provide rich material for reflection on the possible
ingredients and shape of a Palestinian Spring, if indeed one is in the
making.

PA Neoliberalism Surges Past the Finish Line

In our work published in the Journal of Palestine Studies (5) a year ago,
Sobhi Samour and I attempted a first assessment of the progress made and
risks engendered by PA neoliberal economic policymaking under prolonged
occupation, which have intensified under the current regime. Since 2005, the
PA embarked on a series of post-intifada, post-Arafat institutional and
policy “reforms” targeting security and rule-of-law measures, enhanced
public finance transparency and efficiency, and the provision of improved
public services and utilities. In doing so, the PA followed Washington
Consensus conventions that severely limit active state intervention in the
economy beyond the protection of property rights so as to release the full
potentials of the market. In the Palestinian case, this is particularly
curious, as if too much government regulation or fiscal preponderance was
the real ailment of the Palestinian economy under occupation.

The zeal, indeed exhibitionism, with which the PA pursued these reforms,
coupled with the international attention they attracted, implied that the PA
needed to successfully navigate the two-year homestretch to freedom through
its “state-readiness” program. In line with some of the more dated World
Bank notions about good governance, it became commonsense that only by being
certified as institutionally ready for statehood by the World Bank, IMF, UN
and the AHLC of donors could parallel political negotiations possibly lead
to an actual Palestinian state.

Within the constrained economic policy-making space available to the PA, the
only macroeconomic policy option it really ever has had was to stimulate
aggregate demand through public expenditure fuelled by increasingly high
levels of international aid. Ironically, while the PA program aspires to be
a model of “sound” neoliberal policies, within the confines of the Paris
Economic Protocol between Israel and Palestine it is by definition unable to
pursue the full range of such policies, except by tracking Israeli economic
policy. Nevertheless, PA trade policy, such as it is, aims to build an
economy even more liberalized than Israel’s, with lower tariff and other
barriers to trade and financial flows.

The dedication of the PA to liberalization is undeniable, and earned fulsome
praise in 2011 from the international financial institutions. But even along
this trajectory, success in the full pursuit of such policies is by no means
assured. Even if the PA had assessed the possible economic impact of its
policies when designing and launching them, it is dubious that they could
have realistically predicted how such measures might play out in a
distorted, fragmented and occupation-throttled economy. In such a laboratory
environment with unstable substances, untried formulae and uncontrollable
internal and external pressures, any number of things could go wrong from
the perspective of IMF-inspired prescriptions for fiscally vulnerable
developing countries.

Needless to say, the most uncontrollable substance in this peculiar
situation, Israeli occupation, is the elephant in the room of the
achievements of Palestinian neoliberalism. In its latest move, Israel waded
into the PA “state-readiness” scoring game with its report to the March 2012
AHLC meeting by denying its rating, citing  (6) stalled growth in 2011,
fiscal weaknesses and aid dependence. Not surprisingly, Israel insists on
yet “further reform in order for the PA to meet the standards of a
well-functioning state”.

Looking at recent economic developments, it appears that indeed something is
going awry. Policy-makers appear to have reached the end of their tether,
except in proposing yet further austerity. Their core constituencies are
increasingly questioning the peaceful coexistence between the promise of
national liberation and the neoliberal life, while in reality neither is
assured. As for the important global function of neoliberal policies, namely
to “level the playing field” of the economy to enable the free movement of
financial capital, the PA project is hardly significant in regional or other
terms. Hence the sustainability of financially profitable capital
accumulation in the Palestinian conditions is dubious, even if for the
moment the Palestinian Securities Exchange is reportedly a bright performer
(7)
 compared to other regional Exchanges badly shaken by the Arab Spring.

The PA completed its two-year, institution-readiness program in September
2011 with no state in sight. Facing an apparent breakdown in negotiations,
the PLO was challenged by growing public dissent and, in terms of its own
strategy, a lack of clarity as to where to go next. This “finish line” was
crossed without the Palestinian people actually being any freer than they
were two, five, or twenty years ago, even if for some in the West Bank the
“quality of life” under occupation has never been better.

The PA has been quick to blame Israeli intransigence and the failed
political process, not to mention Palestinian internal divisions, for not
delivering the results that would have allowed it to morph into a new state.
PLO officials might admit in private that they had no serious expectations
to the contrary and were hoping to buy time with the state-readiness program
so as to prolong the “peace process.” But few are willing to recognize the
extent to which five years of “reform” have locked the PA into a
sub-contracting role for a continuing, increasingly sophisticated and
cost-effective occupation regime.

Apparently the PA will not accept that its economic policies should be
derailed just because there is a political stalemate (or collapse). Nor,
judging from Jordanian, Arab and donor responses, does it appear that the
PLO will be allowed to consider downgrading the PA, even if it wanted to. In
the past months as the PLO diplomatic campaign came to a halt amidst looming
donor financial sanctions, and as Israeli colonization intensified, the PA
oddly enough opted for further deepening of its neoliberal measures in the
most narrow domestic policy area that it could tinker with, namely fiscal
austerity measures.

The Discrete Charm of Fiscal Austerity and Structural Reform under
Occupation

Two recent austerity measures are especially indicative, because of both
their policy content/impact and the popular response they provoked, namely
the revised Income Tax Law, and the plan to reduce the public sector payroll
by early retirement of the oldest segment of the PA civil service. The Law
was criticized for poor design, inadequate public consultation, and possible
adverse social impacts on marginal groups, but mainly for the perceived tax
burden it would have created for small and large businesses alike. This Law
is notable for being the most significant, if not first-ever, economic
measure since 2005 to be rejected by public outcry. In January, the PA was
obliged to announce its suspension and reformulation after a “public
dialogue.” While a parallel domestic austerity plan to abolish thousands of
public sector posts through early retirement was considered, anticipatory
public opposition led the PA to announce (8) that it was never seriously
studied. Meanwhile, a series of sarcastic, graphic postings (9) and
humorous songs (10) on Palestinian youth internet/facebook (11) networks
depict a series of accusations against the PA encompassing grievances about
Ministerial privileges, urban and rural poverty, runaway prices, and
political dysfunction.

The strong public reaction to these proposals cannot be simply ascribed to
populist discontent or frustration with lack of progress in the political
process, although these are not negligible factors. Some public criticism
may have confused the increased burden from taxation with the separate
problem of a Palestinian inflation rate that is systematically higher than
in Israel. But across the middle-to-low income spectrum, there are signs of
a looming socio-microeconomic crisis in the Palestinian economy that mirrors
its chronic macroeconomic crisis. Inflationary pressures, conspicuous
consumption, imports fuelled by stable income expectations, and rising
household indebtedness (12)
are combining to squeeze many households. For
now, that is the most clearly “evidence-based” factor fuelling discontent
that goes beyond PA politics.

For example, the most common indictor of “financialization” of an economy
(or the preponderance of the financial economy over the real economy) is the
ratio to GDP of credit extended to the private sector. In the case of the PA
(13)
, this ratio has grown to an all-time high of twenty-nine percent in
2011. While such a ratio is actually several points above the average for
comparable economies, it is well below the critical level (of over 110
percent) that is the threshold over which financialization is considered to
become destabilizing. However, with Palestinian private credit growing
annually by thirteen percent, the critical comparative figure to highlight
is that of real per capita GDP, which has been growing at two percent
annually since 2006, or less than one-sixth the growth of private
indebtedness. No wonder the average household is feeling the pinch.

Now that the proverbial chickens of the past five years’ private consumption
boom are coming home to roost, the official PA narrative is explaining that
it is payback time for past excesses, while the sound of international
cheerleading has somewhat subsided (14)
. The PA is faithful to neoliberal
expectations, evidenced by the Prime Minister’s statement that the
government cannot be held responsible if people irresponsibly incurred debt
for consumption loans that they cannot repay. But if the PA’s repudiation of
its most provocative austerity measures does not in itself mean a roll-back
of Palestinian neoliberalism, it at least suggests that its policy thrust
has reached the limits of the envelope within which it has been contained
since Oslo. 

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[Palestinian banking sector credit aggregates, 2006-2011. 2006-2010 data
from Palestinian Monetary Authority. 2011 data based on author estimates.]

Popular contestation, a fledgling business class chafing at the new tax
burdens <shasha.ps/vdetails.asp?nid=12271&vt=6…> , and critical review
by some experts together underscore the risks of pursuing further
belt-tightening in order to attain an impossible fiscal balance and
aid-independence under an occupation which is constantly undermining the
fabric of society and the economy. From a developmental angle, this is
especially futile as the occupation regime by definition negates sustained
growth or development and sits astride the most important channels of
potential public revenue (from external trade) (15).  From the perspective
of national liberation, such a PA policy effectively plays party to Israeli
“economic peace” (16)
and ensures maximum extraction of Palestinian
“national” resources to share the costs and administrative burdens of
administering an open-ended occupation and orienting Palestinian economic
policy (and most debate) around that function. This is the effective, if not
intended,
outcome of Palestinian neoliberalism.

Looking at the broader implications of the now abandoned PA structural
reform measures, pushing through the income tax law would have meant a major
shift in PA business-friendly policies towards a private economy hardly able
to cope as it is. And had the PA gone ahead with public job cuts it would
have has to abandon the one macroeconomic policy goal that it could target,
and did with some success since the second intifada, namely sustaining
aggregate demand through payroll stimulus. So the successful contestation of
these measures represents a small victory for common-sense economic policy
and recognition of the real limits of any “policy-making” under occupation. 
Despite the PA’s uncertain policy making performance, it can only be hoped
that this episode may have had some sobering effect on the plans of
Palestinian “reformers” and their international sponsors who have helped
perpetuate the suspension of disbelief that the PA economic program amounts
to.

States of Liberalization and Stages of Liberation

It is increasingly apparent that continuing “embedment” of neoliberalism in
Palestinian society and economic thought has effectively created a real
constituency willing to live with Israeli “economic peace.” One Arab Spring
after we first explored these questions, I would contend that recent
economic developments have accentuated inherent contradictions upholding the
PA program and Palestinian national alliance sustaining it. The first cracks
in the PA’s external image may be showing in an economic policy package that
has run out of steam, if not begun to reverse.

Certainly, the PLO faces critics on all sides over political
paralysis/disunity and its inability to deliver a national solution through
negotiations. But there is little concrete evidence that the broader liberal
philosophy and lifestyle which frame its economic policies is being
questioned. Nor are the financial and commercial interests and joint
security regime with Israel that underpin it threatened by popular
discontent. Indeed as my co-author has stressed to me, protests
notwithstanding, it might still be the case that many believe in market
primacy, define success as working in a bank in Ramallah, think that the
poor contribute inadequately to their electricity costs, that drinking an
expensive coffee in a Ramallah café is a sign of status, or that kids from
refugee camps should be barred from selling their fake CDs in restaurants
and night-spots.

However, I find it difficult to see how, or why, the broad socio-political
alliance that sustained the PLO’s strategy for the past five years would or
should remain bound by the comfortable narrative of “reform and
institution-building” that replaced the appeal to patriotism practiced by
the PLO under Arafat. For several decades, that alliance more or less
successfully married the interests of private Palestinian capital, labor and
public policy within the broad pluralist political system of the PLO and its
national/social contract. But today that consensus cannot be taken for
granted as the Palestinian social fabric is stretched to its breaking point.
The confluence of class and political interests the PLO symbolized cannot
but be undermined by growing PA economic policy incoherence under pressure
from popular and corporate dissatisfaction.

Furthermore, Palestinian history tells us that no growth or prosperity
bubble has ever been sustainable. Since the 1930s, popular resistance to
colonialism, surges of national self-determination, or the impact of
economic shocks have repeatedly forced a retreat from “normalcy.”
Notwithstanding neoliberal successes in neo-colonial situations elsewhere,
its victory is not necessarily imminent in Palestine. This is not only
because of the pending challenge of decolonization but also, I believe,
because its core constituency never really coalesced in its favor, and could
not attain “class consciousness,” so to speak.

The PA strategy of state-building by policy and in lieu of
resistance/liberation encouraged a focus on “domestic” concerns of
“citizens,” rather than the “national” concerns of “militants.” This
constitutes an important deviation from the manner in which PLO hegemony was
sustained since its inception. That entailed nurturing a broad consensus
that the imperatives of an overarching national liberation project justified
tolerating compromises on, or at best lip-service to, deeper social
transformation and economic development agendas. Ever since the 1970s when
Palestinian Marxist factions flew red flags from minarets in Jordan, the PLO
mainstream maintained that until completion of the “stage of national
liberation,” social conflict must be postponed for the sake of national
unity. And in the earliest stages of the struggle against colonialism before
1948, traditional nationalist elites were at odds with the Palestinian
socialist and labor movements which gave national and social agendas equal
footing.

“Domestication” of Palestinian national politics was underway well before
the Arab Spring, indeed beginning with Oslo, wherein socio-economic
priorities acquired increasing significance alongside the struggle for
national liberation in public opinion. Yet it is too early to discern if
popular discontent implies a repudiation or abandonment of neoliberalism or
simply an attempt to create a kinder, gentler, reformed version. In
Palestine, the potent mixture of socio-economic conflict and a repressed
aspiration for political empowerment and national self-determination could
lead developments either way.

The possibility should not be dismissed that a broad public would opt to
cling to the PA way of life and its entitlements instead of risking a
perilous resumption of (even non-violent) resistance or even national
reconciliation. At this historic juncture, a fractured and exhausted
national movement stands at the precipice of possible reconstitution in the
wake of an announced death of a morbid “peace process” or, alternatively,
disintegration and collapse under the weight of settler colonialism. In the
wary and time-tested perceptions of most Palestinians, preserving the status
quo is inevitably the preferable option.

But can Palestine remain immune to the contagion of change sweeping the
region, and will a younger, impatient and exigent generation simply defer to
the “national leadership” in defining its agenda of social change and
anti-colonialism? It would seem intuitive that the weight of the Arab Spring
would only hasten and shape events, if not through the channels of its
revolutionary undercurrents, then through the influence of the
“counterrevolutionary” forces in the region and internationally.

So, with the achievements (in hearts and minds at least) registered by
Palestinian neoliberalism, the diversion of public attention from occupation
to inflation, taxation and indebtedness, and the fracturing of the
national/social contract, a new configuration of forces ensues. Could this
open a path to a new phase of social and economic contestation of the PA
regime that is as valid, compelling and urgent as, if not indistinguishable
from, resistance to occupation?

As early as V.I. Lenin’s endorsement of the national struggles for
self-determination by colonized peoples, through Mao’s strategies of
alliances with nationalist forces, to the Vietnamese and African experiences
of broad anti-colonial fronts, national liberation struggles always have
entailed coalitions between different class forces and their political
formations. Depending on the strength of the national bourgeoisie (and the
degree of its common interests with colonialism), it usually has assumed a
more or less prominent role in active leadership of the liberation movement
and secured for itself a significant (if not dominant) role in
post-independence periods.

The Palestinian national liberation movement appears to be no exception to
that broad trend. Without going into the historic evolution of the social
alliances that sustained Palestinian nationalism over the past century,
suffice it to say that since 1948 at least one major shift occurred. After
the Nakba the leadership of the Palestinian national movement, hitherto held
by the urban notable elites and proto-capitalist class with a wide peasant
and working class constituency, passed to a new generation. Since the 1960s,
the PLO breed of refugee/middle-class nationalist militants, intellectuals
and guerrillas allied with a “national bourgeoisie” dispersed between
Palestine and throughout the region and beyond, together built a legitimate
constituency for most of their existence.

In the analysis of the preeminent narrator of neo-colonialism, Frantz Fanon
in his Wretched of the Earth, the “national bourgeoisie” is little more than
a “national middle class” with an “historic mission: that of intermediary.”
In the Palestinian case, these would include strata such as Fanon’s
“university and merchant bourgeoisie,” “army and a police force,” “the young
national bourgeoisie,” “the party,” a “profiteering caste,” a “native
bourgeoisie,” “honest intellectuals,” and a “bourgeoisie of the civil
service.”

In Fanon’s view of this parasitic, non-productive and generally “useless”
bourgeois/petit bourgeois class elaborated in the “Pitfalls” chapter (17),
there is no particularly important role for domestic and expatriate
industrialists and masters of finance. Their weak industrial and
technological base and “comprador” links to global capital determine their
objectively hostile position towards the national liberation project, even
if they may be willing to strike an accommodation with it. In a departure
from Fanon’s typology however, in the Palestinian case, these “diaspora
millionaires” are not hostile to national liberation; indeed they are
important players who always have been closely aligned with PLO economic
interests and political program, underwritten it financially, and invested
in productive sectors and development in Palestine. Combined with the other
strata of the national middle class, I would describe this social formation
as the core potential constituent of a Palestinian “neo-colonial, national
liberalism.”

This strange Palestinian brew implies a hitherto unknown hybrid that
interweaves a Fanonist scenario of post-colonial revolutionary failure
(which usually takes place post-independence) with an unachieved national
liberation project (which usually is not mortgaged to neo-colonialism). For
example, the (usually) post-colonial “de-mobilization” of the previous
militant leading cadres vividly described by Vijay Prashad with respect to
the Algerian experience in The Darker Nations (18) , has been pursued with
vigor by the PA since 2005. A new “entrepreneurial” technocracy has taken
the place of PLO and Arafat-era PA administrators, disinheriting the PLO
military cadres whose “struggle” since the 1960s made the PA self-governance
project possible. But such a deformed neocolonial governance pattern has not
been witnessed while de-colonization is still unachieved or in the absence
of sovereignty. In that regard, Palestine presents a unique situation.

The Palestinian National Bourgeoisie: Progressive? National?

Throughout the Arafat era, the “national front” shared political decision
making powers and co-managed, more or less, “national wealth” to the extent
that such a public good was nurtured, mobilized or otherwise created by the
PLO. From the taxation levied by the PLO on Palestinian workers in the Arab
states since the 1970s, to the mobilization of the expatriate Palestinian
capitalist classes in the 1980s and the generous sharing of rents (19) from
public utilities franchises and selective commodity supply monopolies under
the PA in the occupied territory since 1994, there has usually been a common
ground, material interests and good “national” political sense for such an
alliance.

Such a political-economic consensus has always united the material forces of
Palestinian capital and the national bourgeoisie with the national
liberation movement. The latter has historically mainly represented the
dispossessed and deprived masses of Palestinian refugees in exile, peasants,
urban poor and a growing middle class of educated professionals. To the
extent that a recognized and re-legitimized PLO leadership might still
command political influence among the Palestinian people inside and outside
Palestine, this national front could yet survive. The rise of a Palestinian
Islamist national liberation movement which is bonded together with faith
and tradition may appear to have rendered such an alliance obsolete.
However, the recent governance experience of Hamas in Gaza suggests that the
movement’s alliance with its own capitalist support base inside Palestine
and in the region also has been vital to its economic and financial
survival. Indeed it entails a “national front” of a greener color perhaps,
but nevertheless effectively comporting with the tradition of the secular
national liberation movement.

In his timeless indictment of the (inevitable) treachery of the
post-colonial national bourgeoisie, Fanon defines its essent

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