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Palestine Economy: Update
I spent the day in Ramallah yesterday, attending a meeting of information technology and telecom entrepreneurs, and catching up with some of the folks I reported on in last month's Harper's: Palestinian business leaders who are, slowly but surely, laying the ground for Palestinian civil society; people fighting the limitations of occupation at every turn just to keep their businesses afloat, while the Netanyahu government boasts about "economic peace."
I reported, for example, on the stalled efforts to launch Wataniya, the Palestine Investment Fund-backed cell phone provider, which had been promised 4.8 megahertz of spectrum by the Israeli government. (Wataniya was conceived by the PIF to compete with Jawal, in effect, the monopoly provider that had been started by the dominant PALTEL, and which now has a million and a half subscribers.) It is important to understand that Wataniya would be stiffening the spine of the Palestinian economy as a whole by inducing competition, and bringing down prices, for services every emerging business desperately needs.
Wataniya--so its Chairman, the PIF's head, Mohamed Mustafa, told me--was organized to offer Palestine's first 3G network. When I wrote my piece, Israel had released only 3.8 megahertz but kept the rest without explanation, suggesting Jawal share what it had. Mustafa was threatening to bury the entire deal, rather than launch Wataniya with one arm tied behind its back. Anyway, Wataniya finally launched a couple of days ago, a "soft-launch" Mustafa told me, not without good cheer, practicing his elevator speech. The company would not be able to offer all the services it had prepared for; it would focus instead "on customer service" while offering 2.5G services like text and messaging.
It is hard to imagine a management more persistent or forward-looking. The conference was buzzing with hopes engendered by the PIF's various investments, not only in telecom, but in commercial office parks and micro-lending. Yet PIF investments are hamstrung by, among other things, its being shut out of Jerusalem. One feature of competition in Palestine's telecom industry is customer poaching by Israeli providers. (Palestinian companies have exclusive rights in Area A, the centers of Palestinian towns and cities where the Israel Defense forces tend to stay out; but in Areas B and C, where the army and settlers operate freely, and in East Jerusalem--altogether, in two-thirds of the Palestinian territories--Israeli cell phone companies operate illegally but with impunity.) In East Jerusalem, Palestinian providers have no access whatsoever.
WHICH BRINGS ME to increasingly ominous economic trends in East Jerusalem, the once and historic hub of all West Bank cities, including Ramallah. The former economics minister of the Palestinian Authority, Bassim Khoury, recently sent me his summary of depressing data ferreted out of Israel's Central Bureau of Statistics. The conclusions suggest why Ramallah's business class may well lose the race to preempt a Bosnia-type violence that may engulf them and Jerusalem both:
Per capita income of Arabs in Jerusalem is less than half of Jews, who are on average the poorest in Israel. Unemployment among Arabs is 25%, 10% higher than in the West Bank as a whole. Infant mortality is almost double that of Jews, though the birthrate is about the same. About 85% of the municipal education budget goes to Jews, 15% to Arabs, though Arabs are about 30% of the grade school population. 50% of Arabs live under the poverty line, while 25% of Jews do so. This means both Arabs and Jews have about 125,000 people officially defined as "impoverished," but the Jews get 88% of the welfare budget. The city of Jerusalem spends about five times more on Jews than on Arabs per capita for municipal services of all kinds (sewage, garbage collection, etc.). Jews get 98% of the "cultural" budget.
Remember, East Jerusalem is now separated from the other West Bank cities by a wall. The idea was to fence out deadly violence. But the trajectory of social relations in the city suggest violence is only being fenced in. (This was predictable.) Last week's disturbances at Al-Aqsa suggest how it will start, which is pretty much the way violence has started in Jerusalem since 1920. Considering the Jewish people's past, it would be rude to call East Jerusalem a kind of ghetto. So let's just call it a walled-in, patrolled, increasingly impoverished enclave for people with diminishing political rights and unlimited encouragement to leave.
Yasir Barakat, among the most established merchants in the Old City, tells me he knows "nobody whose educated children are not planning to leave Jerusalem if they can." Yasir is one of my oldest friends in Jerusalem. He is not sleeping well. His daughter is now in Dubai, a son is studying in England, and another son, with a degree in network security from England, is working (for now) in Ramallah. "Let's be honest. There is no give-and-take anymore. The Jews think this all belongs to them and that's that."
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Brave post, Bernard.
It tracks the experience of my wife's family who are scattered between East Jerusalem, Bethlehem and Ramallah.
It's ethnic cleansing by inconvenience.
November 3, 2009 9:57 AM | Reply | Permalink
wake up! israel is a racist apartheid state. the settler-IDF-likud-kadima-labor-aipac-USmedia-USgovernment complex has won. the long-term goal is to take all the land, to have all of jerusalem be the capital of israel, and, for the religious zealots, to build the third temple. the long-term goal is to to make life unbearable for the palestinians until they leave, are starved, killed, or are transferred.
the peace process is a pacifier-illusion for those who want to be fooled and can't face the reality of what is happening.
November 3, 2009 10:41 AM | Reply | Permalink
BluePearl (he yawns and rubs his eyes), but why are pulling your punches. Tell me what you really think.
November 3, 2009 10:46 AM | Reply | Permalink
what i think is that you're one of the good guys and that israel needs more people like you.
November 3, 2009 11:11 AM | Reply | Permalink
actually, israel needs 5 more million people like you!
November 3, 2009 11:17 AM | Reply | Permalink
Since the Israeli occupation of 1967, the Arabic area of Jerusalem has experienced recession, due to Israeli trade embargoes and laws banning Arabs from working in West Jerusalem. A scenario reminiscent of certain areas of Berlin in 1933.
Ehud Barak's intention is to drive all Arabs out of Jerusalem. When that objective is complete, he and Netanyahu will endeavour to expand Israeli settlements in the West Bank to an extent whereby there can be no viable Arab economy. Then the Likud agenda of ethnic-cleansing will be complete - unless and until the world takes action now to stop this madness.
November 3, 2009 10:49 AM | Reply | Permalink
"A scenario reminiscent of certain areas of Berlin in 1933."
People, what's going on here? Is Israeli = Nazi the only formula TPM Cafe readers can come up with today? This kind of thing makes it harder for people like myself to report, because you make it easy for you-know-who to say that critical reports about the occupation play into the hands of people stridently opposed to Israel's very existence, which, by the way, even my friends in Ramallah are not.
November 3, 2009 11:01 AM | Reply | Permalink
You are correct that the equation of Israeli = Nazi is wrong-headed, ahistorical, and a distraction.
However, the ethnic cleansing by inconvenience is a real phenomenon. Most modern states are just two smart to pull a full Milosevic and stuff the trains. (Notice I avoided a WWII analogy because those are never accurate when it comes to the ME.)
Bernard, it may not be your goal, but it certainly is the GOI's goal is to slowly exhaust the Palestinians so that the talented ones ultimately choose emigration.
Do you deny that's what is going on, Bernard?
November 3, 2009 11:15 AM | Reply | Permalink
Of course it's what's going on. But I doubt you'll get an answer because admitting that the GOI is practicing a form of ethnic cleansing would require people of conscience (like Bernard and MJ) to take more vigorous action against Israelis ethnocentric policies--and maybe to finally admit that such ethnocentrism inevitably leads to discrimination and must be abandoned. I'm afraid, however, that abandoning Jewish ethnocentrism is beyond both Bernard and MJ and therefore we will continue to have on TPMCafe these "good-feeling" posts that ignore the all-too-obvious reality that Israel's grand strategy is to marginalize the Palestinian population to such a degree that the Palestinians will eventually have to leave. It's a passive-aggressive approach to ethnic cleansing and is certainly not as overtly brutal as the Nazi approach, but it's cruel and brutal nonetheless and just as immoral. Not a holocaust, maybe, but certainly another trail of tears.
November 6, 2009 7:51 AM | Reply | Permalink
Bernard: I am not of the view, and do not propound that the Likud agenda is in any way comparable to that of the Nazi party. Let that be quite clear.
Let it also be quite clear that Israel is treating Arabs in Jerusalem similarly to how the Jews were treated in Berlin in 1933. They were not killed or murdered, but they were harassed, humiliated and increasingly oppressed and eventually disenfranchised and dispossessed. The comparison is obvious and, with respect, you should not shy away from the facts.
It is odious to say that Israeli=Nazi, as it is odious to say that Zionism=Judaism. Both are false.
But please do not be afraid of acknowledging what is being carried out in Jerusalem and the West Bank, in our name!
November 3, 2009 11:52 AM | Reply | Permalink
Very nice post. I am impressed by the persistence and entrepreneurship of the Palestinian leaders you described.
I find it amusing and sad that our own business leaders are not similarly respected by the denizens here at TPM.
November 3, 2009 2:39 PM | Reply | Permalink
The question is whether these Palestinian entrepreneurs who are building a so-called "civil society" are creating an economic community that will become the backbone of a real and viable Palestinian state, or whether what they are creating will just become the economic hub of a nominally "autonomous" Arab Quarter and business zone in an Israeli state that eventually extends out to the Jordan.
My impression of Netanyahu's strategy is that he seeks the latter, and that he aims to buy off Palestine's best and brightest by attracting outside investment funds, and encouraging them to accept an individually profitable life prospect at the price of permanent subordination for their people. He especially hopes to dazzle and fully co-opt liberal American and European Jews, who can be persuaded that these sorts of conscience-salving investments in the West Bank Arab Quarter are helping to "liberate" Palestinian Arabs, rather than buy them off and subordinate them. He also wishes to divide Gaza and the West Bank even further, economically isolating and crushing the one while Israelifying the other, so that eventually they are as different and separate as East and West Germany.
There are prosperous Arab entrepreneurs in Israel too.
November 3, 2009 8:07 PM | Reply | Permalink
Dan, this is a shrewd question, and (as I say in my article) probably maps to Bibi's vision, but your working assumption underestimates the savvy and national purpose of Palestine's business leaders. If they could be "bought off" they'd be living elsewhere, where (among other things) their children would not want to emigrate.
November 4, 2009 6:42 AM | Reply | Permalink