Defeating Palestinian Dependency

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Sonja Karkar, editor of Australians for Palestine, writes:

The following article is very important because it looks at the immense practical problems besetting the Palestinians as a consequence of Israel’s unrelenting occupation and apartheid policies and that unless the root causes of these problems are urgently dealt with, the Palestinians will remain an enslaved population.

It discusses, in particular, how aid has been a pernicious problem, linked as it is with politics and capital, and suggests that “Palestinians must aim to move away from the current context toward a paradigm that understands development as means to realising rights, freedoms, and self-determination.  It is also essential to move beyond the technocratic and apolitical understanding of the development process toward recognising the asymmetry of power and colonial dominance.”

The ‘economic peace’ that promised so much, it says, merely “promoted economic normalisation through joint industrial zones, Israeli-Palestinian business forums, Palestinian investments in Israel and even in settlements, neglect of the agricultural and industrial base, joint management of water resources for the benefit of Israeli settlements and industry, neglect of Palestinian economic activities in Jerusalem, privatisation, and encouragement of public and individual debt.”   The article points out that the Palestinian leadership is partly responsible for this state of affairs because it agreed to the Paris Protocol with the Israelis in 1994 when all the while and since, Israel has continued to colonise Palestine.  However, that does not mean Palestinian civil society has to accept the entrenched oppression under which they now live.
This article provides some suggestions for creating a resistance economy.

All references in the article are available in the links provided below.

Defeating dependency, creating
a resistance economy


by Alaa Tartir, Sam Bahour & Samer Abdelnour

Al Shabaka
14 February 2012

In an important recent piece – Economic Hallucination – Ramallah-based
Al-Shabaka policy advisor Sam Bahour exposed the charade played by both
Western donors and the Palestinian Authority (PA) to cover up the occupied
territory’s inexorable economic meltdown after decades of Israeli military
occupation. Arguing that the combined donor-PA approach poses major
obstacles to freedom and rights, Bahour concluded: “It’s time for a new
economic model, one built on economic justice, social welfare, solidarity,
and sustainability.” What would such an economic model look like and how can
Palestinians living under occupation move from today’s grim reality to an
economy that sustains the quest for self-determination? Al-Shabaka policy
advisors Alaa Tartir  and Samer Abdelnour  join Bahour to debate these
questions and explore alternatives.

Needed: Tools to Communicate the Socioeconomic Reality

The Gaza Strip has often been described as a large prison and, indeed,
Israel’s siege makes it impossible to portray it as anything else. The West
Bank, including East Jerusalem, is also a prison: its entire Palestinian
population, from the PA president (whose VIP status was recently downgraded
by Israel to a two-month travel permission) to day laborers, are forced to
rely on Israel for freedom of movement and access. Israel directly or
indirectly controls all Palestinian economic resources. Furthermore, 60% of
the West Bank, classified as Area C under the Oslo Accords, is completely
off limits to Palestinian development. Yet these West Bank realities are
masked by talk of economic “growth” of as much as 9% a year, impressive
institution building, and a booming stock market. This harmful narrative is
both a result of “people-blind” macro-economic measures and political
propaganda that effectively normalizes the occupation-PA-donor status quo.

As Jeremy Wildeman put it in an article  on the delusions of a Palestinian
economic miracle, “The crippling truth is one of poverty, personal
insecurity and protracted economic decline… [only serving] to distract the
world from implementing difficult solutions to the real problems.” How
difficult are those problems? Rashid Khalidi went to the heart of the issue
when he asked how “the settlement-industrial complex” would be uprooted – a
complex that stretches beyond the 600,000 settlers living in the occupied
West Bank and East Jerusalem to encompass the “hundreds of thousands in
government and in the private sector whose livelihoods and bureaucratic
interests are linked to the maintenance of control over the Palestinians”.

It should be noted that even those reports that speak glowingly of Prime
Minister Salam Fayyad’s institution-building efforts cannot completely
escape the truth. Multiple reports by the World Bank, International Monetary
Fund, and the European Union, admit that the private sector cannot operate
due to the restrictions of the occupation and the shrinking of the
Palestinian productive base. One 2010 World Bank report went so far as to
say that Israel’s “apparatus of control” had “become more sophisticated and
effective in its ability to interfere in and affect every aspect of
Palestinian life, including job opportunities, work, and earnings… [turning]
the West Bank into a fragmented set of social and economic islands or
enclaves cut off from one another.”

Although neo-liberal economic policies accelerated under Fayyad brought
wealth and spending power to small segments of the West Bank, this was
doomed to be a temporary phenomenon. That has now been replaced with
spiraling costs and deficits that the Government is seeking to address
through the same kind of austerity measures – public sector downsizing,
higher taxes, and reduced incentives for investments – the same kinds of
policies imposed upon many developing countries.

Economist Raja Khalidi questioned the applicability of structural adjustment
policies to the Palestinian context in a recent article, noting that
longstanding financial problems in the OPT have nothing to do with
structural problems that can be “adjusted.” Rather, they are the direct
result of the occupation. In addition to the volatility of the tax base and
the vulnerability of the level of economic activity to the Israeli closure
policy and recurrent military confrontations, Israel has full control over
the tax and customs clearance revenue that it collects on behalf of the PA.
As a report  by the UN Conference on Trade and Development (UNCTAD
revealed, imports produced in a third country and re-exported to the
territories as if they were produced in Israel (indirect imports) cause losses
of $480 million USD per year – almost 25% of public revenues, 10% in lost
gross domestic product (GDP) and 30,000 jobs per year. The PA’s moves are
leading to widespread protests against what has been termed “Fayyadism”
and the neo-liberal policies it represents.

Among the challenges for Palestinian economists and analysts are: Which
tools and measures might be used or developed to more effectively
communicate the reality of the Israeli occupation, from the mundane to the
catastrophic in both human and economic terms. For example, is it viable to
deduct from rather than add to GDP the costs of construction or consumption
related to checkpoints and other forms of mobility restrictions (i.e. jobs
to construct roads, extra fuel and transportation services) as well as other
costs of the occupation? Similarly, when a student from Gaza cannot study in
Birzeit or a person is imprisoned for months or years without charge, what
is the negative cost to the Palestinian economy? Such realities do impact
Palestinian socioeconomic well-being yet are much more difficult to measure
than the cost of expropriated land and resources – which also require
measurement in terms of lost socioeconomic, human, and political value.
ARIJ, the Applied Research Institute-Jerusalem, estimated that the total
measurable cost of the Israeli occupation on the Palestinian economy in 2010
was $6.897 billion, a staggering 84.9% of the total Palestinian GDP in 2010.

There is a need for new measures to factor in not only the cost of the
occupation but also the costs of corruption. National and international
institutions like the Bisan Centre for Research and Development, ARIJ, the
Center for Development Studies  at Birzeit University, UNCTAD and the Rosa
Luxemburg Foundation do important work and can help to further develop
accurate tools for quantifying, and analyzing such costs. It is also
important to openly disseminate and discuss these costs widely and build
consensus around their findings and potential actions

Top Priority: Dealing with Aid Dependency

The debates about Palestinian dependence on international aid go back to at
least the Nakba (the Palestinian catastrophe of dispossession in 1948).
Sophia Stamatopoulou-Robbins’ analysis of past aid initiatives suggests that
these bore the “tangible signs of expulsion” and spoke of a common exile.
The present is more pernicious because the sources of aid are easily erased
together with their implications: “The visible is no longer a reliable
source of what is there. Direct imports are not direct. Palestinian police
uniforms mean Israeli coordination. And a new ‘Palestinian’ road probably
means more settlers.”

Much has been written about the problems of the aid industry in the occupied
territories. There is a need to move beyond arguments that aid sustains the
occupation and to devise political costs that create a real change.
Palestinians must encourage the aid industry to stop wasting resources under
the false pretences of assistance and to help create a genuine economic
steadfastness to end the occupation. Donors are aware of the issues but have
little incentive to align general development policies with the reality of
the Palestinian experience. This is partly due to the unwillingness of donor
agencies to defy donor country political agendas, and partly to the global
reality that aid policy is highly decoupled from genuine socioeconomic
improvement. Added to this is the PA’s acquiescence to the status quo.
However, it cannot be ignored that donor countries benefit greatly from the
current configuration of the aid industry. This is particularly true of
USAID and the Japanese International Cooperation Agency (JICA), whose
contractors and consultants consume so much of their own aid. In addition,
the recent book  by Sahar Taghdisi-Rad reports that a great deal of aid to
Palestinians contributes to the Israeli economy. In the end, little aid
reaches Palestinians; that which does signifies an immense political cost
when it ignores inalienable rights to freedom, self-determination, and

Donors have never taken Palestinian claims seriously, partly because donor
investment in the so-called “peace process” has never been seriously
challenged. A civil society campaign is urgently needed to expose these
operations and make it difficult for donors to do business as usual. Getting
a few “bad” donors out of Palestine as a result of social pressure would go
beyond simply “reforming” aid and might restore Palestinian steadfastness
and resistance in the struggle for human rights.

Another good starting point along this road would be lobbying to revoke the
exemptions the late Palestinian leader Yasser Arafat gave to USAID.
According to a 2010 report  by AMAN, a Palestinian coalition for
transparency and accountability, 146 foreign organizations are registered,
just 40% of the total number operating in the OPT. This is partly because
Arafat exempted from registration all USAID institutions, branches, bodies
and companies, according to the report. Furthermore, the Ministry of
National Economy grants many USAID branches registration permits as
non-profit companies without requiring the submission of any official
documents. They do not have to report or submit budgets, and are not subject
to the oversight of the Palestinian Companies Controller. USAID is not the
only one to operate without registration or oversight. Others include Konrad
Adenauer Stiftung, Friedrich Ebert Stiftung Ford Foundation, Handicap
International, and Diakonia. Indeed, the author of another study on
international aid agencies told Al-Shabaka that one NGO refused to disclose
information on the basis that “we are registered by the Israeli government
and so you don’t have the right to ask us to reveal any of our information,
particularly when it comes to finances”.

The PA should not only demand accountability from foreign NGOs but also tax
their operations. A tax on the consultancies of foreign experts will make
them more expensive for donors in relation to local expertise. This is fully
in harmony with the Paris Declaration for aid effectiveness, as it would
promote the utilization of national capacity. Such incentives might help
redirect aid to Palestinian employment.

This problem extends to Palestinian NGOs, which now number some 1,500 active
organizations . Many refuse to publicly disclose their general assemblies,
boards, staff, funders, audited financial reports, bylaws, and even their landlords.
Some of the biggest and most important Palestinian NGOs refuse to give any
information, claiming that the data is too sensitive. The Palestinian case is not
dissimilar, though perhaps not as extreme, to Haiti’s “Republic of NGOs”. Before
they were forced to pay for their own freedom from colonization, Haitians were
once a people able to feed and clothe themselves.

The Palestinian leadership is partly responsible for the present conditions
of economic dependency and continues to suffer from the thinking and
consequences of an “economic peace” engendered by the Paris Protocol signed
with the Israelis in 1994. Such “peace” has promoted economic normalization
through joint industrial zones, Israeli-Palestinian business forums,
Palestinian investments in Israel and even in settlements, neglect of the
agricultural and industrial base, joint management of water resources for
the benefit of Israeli settlements and industry, neglect of Palestinian
economic activities in Jerusalem, privatization, and encouragement of public
and individual debt. All of the above has occurred alongside increasing
entrenchment of Israeli’s colonization of Palestine.

It is vital to address the link between politics, capital and aid.
Palestinians must aim to move away from the current context toward a
paradigm that understands development as means to realizing rights,
freedoms, and self-determination (see, for example, this recent article  by
economist Ali Kadri). It is also essential to move beyond the technocratic
and apolitical understanding of the development process toward recognizing
the asymmetry of power and colonial dominance. Many Palestinian writers are
touching on different aspects of this dilemma. This body of work needs to be
taken a stage further so that it can compete with the existing paradigm and
discourse and provide a credible alternative. The status quo only serves to
normalize and maintain the Israeli occupation by ignoring the political
roots of Palestinian poverty.

Learning from Practical Experience at Home and Abroad

A new Palestinian agenda for a resistance economy can be informed by
indigenous, regional, and international experiences. The economic vision
must be to reinforce self-sustainability and socioeconomic (as well as
cultural) resistance over and above artificial economic growth. Economic
growth – as measured, discussed, and applied has become a leash and muzzle.
This is not to suggest that private sector development be hindered;
entrepreneurship is important at all levels and scales. But there must be a
vision for an economy that sits at the heart of the Palestinian struggle.

The first priority must be self-reliance in terms of basic foods.
Small-scale agriculture can – and has – been carried out by Palestinians to
feed themselves, e.g. permaculture, rooftop drip gardens, and local
biodiversity in terms of crops. Taken to scale, this would gradually reduce
and eventually end dependence on food aid. It could also serve to reconnect
millions of encamped Palestinians to land-based livelihoods. Much can be
learned from Lebanese author Rami Zurayk’s work on how Arab agriculture has
been undermined by aid and ways to restore indigenous practices (see his
recent book Food, Farming, and Freedom   and his blog  .) Cuba’s experience
of achieving food security under politically adverse conditions is also
worth studying. Another experience worthy of study is that of the Sahrawis,
who managed to organize and administer in exile a highly educated population
aligned with their national interests under the most adverse circumstances
(see Randa Farah’s recent study).

It is also vital to prevent the PA from undermining Palestinian agricultural
potential. Marj Ibn Amer valley in Jenin district has historically been a
major food basket for Palestinians, but the PA has commenced actions to
establish an industrial zone, whose ability to operate will be fully
dependent on Israel, on that land. These attempts are being documented, legally
challenged and exposed by BISAN among others. PA officials have been known
to laugh when someone talks about the agriculture sector. In fact, the real joke
are the official declarations about empowering the people in their land when
the land is neither preserved nor used for Palestinian interests.

Traditional cultural industries are another area worthy of support.
Exporting Palestinians’ rich cultural heritage (unlike vulnerable cash-crops
such as carnations and strawberries) can help educate people globally about
the Palestinian cause and provide opportunities to preserve cultural

A Palestinian development agenda should engage Diaspora Palestinians in the
struggle for sustainable self-reliance. Palestinians have the experience of
the 5% that used to be deducted from the salaries of those working in the
Gulf for the Palestine Liberation Organization. The challenge now would be
to build the trust of the Palestinians in the Diaspora, to ensure that
Palestinian funds for a Palestinian development agenda would not be misused
or fill the pockets of corrupted leaders, but would instead be actually
managed as bonds by a national development bank or through a national
development agency along the lines of the Agha Khan Foundation.

There is also a need to think about how Palestinians can institutionalize
and eventually create a bureaucracy around a democratic people-driven
development agenda. In the development literature there is a trend that
prioritizes the indigenous mechanisms, approaches, and governance for
development. In fact, the leading institutions of the first Intifada
demonstrated effective Palestinian-centered governance provisions.
Unfortunately, these were displaced in the wake of the Oslo Accords.

Importantly, a new Palestinian economic vision must embrace dignity in aid.
There must be a time limit by which aid from donor nations supporting any
aspect of Israeli military activity is respectfully declined. All
international NGOs should agree to work on Palestinian development
priorities and timeframes (not three-year donor agendas) and tackle the root
causes of Palestinian poverty: the Israeli occupation and resulting
restrictions and continuing colonization of Palestine. Transparency in
purpose and operations, as well as demonstrated results must be ensured. If
we Palestinians do not ensure dignity in our development, no one will.

Alaa Tartir is a Palestinian PhD candidate and researcher in international
development studies at the Department of International Development, at the
London School of Economics and Political Science as well as a project
coordinator. He is also a research fellow of the Palestine Economic Policy
Research Institute, and recently published The role of international aid in
development: the case of Palestine 1994-2008 (Lambert 2011).

Sam Bahour does business consulting as Applied Information Management (AIM),
specializing in business development with a niche focus on the information
technology sector and start-ups. He helped establish PALTEL and the PLAZA
Shopping Center. Until recently, he served on the board of trustees of
Birzeit University and was the University’s treasurer. He is also a Director
at the Arab Islamic Bank and the community foundation Dalia Association.
Bahour is co-editor of HOMELAND: Oral History of Palestine and Palestinians
(Olive Branch Press). He writes frequently on Palestinian affairs and his
work is posted at….

Samer Abdelnour is completing a PhD in Management at the London School of
Economics. His doctoral research examines NGOs and humanitarian response,
and the role of community and collective enterprise in postwar
peace-building and development in Sudan. Since 2005 Samer has managed
applied research projects across Sudan (Darfur, Southern Sudan, Blue Nile).

Al-Shabaka, The Palestinian Policy Network, is an independent, non-partisan,
and non-profit organization whose mission is to educate and foster public
debate on Palestinian human rights and self-determination within the
framework of international law.

Original Link:…

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