Tipping Point? Palestinians and the Search for a New Strategy

[Rex Brynen]

The economic costs of occupation? LUL WUT! What great economic tiger is being withheld? IMF and World Bank analysis is based upon the assumption that something will be created, but they have no idea what.

Actually, no it's not. It's variously calculated on the basis on growth rates during period of lessened restrictions, the measurable incremental costs of of doing business under occupation, various econometric models, the performance of comparable economies, and past historical data. More the the point, in every donor meeting I'm aware of, Israel has accepted, with relatively minor quibbles, that mobility restrictions do indeed have these effects. They argue that the measures are necessary on security grounds--not that they are cost free.

The withdrawl ended in Gaza, boy, things got better there, didn't they?

Yes, but this was not only anticipated, but expected by the Israeli government at the time. No serious analyst of the conflict thought that a partial withdrawal from Palestinian territory that left most of it occupied would result in Hamas ceasing rocket fire--not the US, not the EU, not the PA, and certainly not Israel (having worked on the planning for Gaza disengagement for the donor community, I'm quite confident of that).

The 3B to Israel is specific to camp david. We bought the Sinai from Israel and gave it to Egypt.

The Israelis withdrew from Sinai because it was in their strategic interest to do so: it neutralized Egypt, and in so doing lifted any serious conventional military threat to Israel (quite an act of strategic far-sightedness, in my view). The CD dividend sweetened the pot, but I think if you ever get a chance to talk to any of the surviving Israeli decision-makers of the day you'll find it was very much a secondary consideration.

Why we pay Egypt is the mystery.

In the context of the Cold War, confirming Sadat's dramatic realignment out of the Soviet camp was a major strategic coup. The continuation of that subsidy post-Cold War is (like the $3b to Israel) partly a product of foreign policy inertia. Israel also tends to lobby for the Egyptian $2B to continue, as a way of helping to ensure it receives its $3B. Congress doesn't really question either.

Even Jordan and Egypt, despite the nominal peace accords, still whip up their jew-hating frenzy on a regular basis. All this made possible by the lack of a comprehensive peace. Give that up?

I doubt that anyone who spends much time in Jordan can accuse the state of whipping itself of whipping up Jew-hating frenzy. Quite apart from that, both regimes' relations with Israel are, in the absence of a resolution of the conflict, a significant threat to regime security. If you were to tell a Jordanian GID official that the conflict somehow makes his job of keeping the regime in power easier he would frankly wonder if you somehow missed the assassination of King Abdullah I, the coup attempts of the 1950s, British intervention in 1958, the 1970-71 civil war, or recent al-Qa'ida terrorism.

Hamas and the PLO benefit both by profit grabbing (Arafat did quite well financially) and by never being responsible.

Hamas, of course, has no access to Western foreign aid--its finances come from Iran and some private Arab donors. As the IMF forensic audit showed, Arafat didn't profit personally from diversion of funds, but largely used those funds (most of which were provided by Israel, over the objection of donors, through diversion of the petroleum excise taxes to a Bank Leumi account and from there to offshore holding companies) to pay for his patronage system and the off-the-books expenses of the Palestinian security services. That particular channel was eventually closed by former PM (and current President) Abbas and former Finance Minister (and current PM) Fayyad. Fayyad in particular, as an economist and former IMF official, is quite a critic of long-term Palestinian dependence on foreign aid.