The Magazine

The Way Forward for the Palestinians

It's economic development, not peace-processing.

Jul 1, 2002, Vol. 7, No. 41 • By DANIEL DORON
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Employment in and trade with Israel were major reasons for the dramatic improvement in the Palestinian standard of living. But they also had unintended consequences, some painful. They brought Arab traditionalists into intimate contact with a modern society and acquainted them with the workings of a boisterous democracy. This forced adjustments in Palestinian family and clan structure and authoritarian political frameworks. So did the violent struggle against Israel, which offered lower-class youths adventure and an avenue for rapid upward mobility through accomplishments in terrorist exploits.

The prosperity enjoyed by tradesmen stirred resentment among the Arab bureaucratic and intellectual elites. They had earned up to four times as much as workers under Jordanian rule, but now saw unskilled laborers in Israel earning far more than they could. Contact between the Arabs' almost medieval ethos of loyalty to location and clan and the Israelis' super-modern, sometimes brazenly liberal ethos exacerbated the religious and national conflict. Confronting modernity caused deep anxiety--notably among students whose parents could now send them to Israeli universities, where they were indoctrinated by radical leftist Israeli academics promoting Palestinian statehood with greater fervor than most Arabs. Soon, the newly established colleges and universities in the disputed territories were hotbeds of radicalism, first Marxist, then Islamic fundamentalist.

Concurrently, among the older, more settled Palestinians, a more moderate middle class was gradually developing. It held out the hope that some accommodation could evolve in time, as Arabs and Jews found it mutually advantageous to work and trade with each other.

ALL THIS, Oslo ruined by focusing primarily on politics. Conceived in the utopian hope that peace could be bought from a reformed Arafat and his Tunisian cohorts in exchange for territory, Oslo postulated that Arafat would turn his proven brutality against his more radical allies, Hamas and Islamic Jihad. Under the guidance of a messianic Shimon Peres captivated by a vision of a New Middle East where factories and hotels rather than armies would keep borders peaceful, the Israeli peace camp made a bargain with the devil, totally ignoring the realities of Israeli and Arab society. It was bound to backfire. Arafat fashioned his "Authority" after the only model he knew, repressive Arab regimes. He dedicated his regime not to civil order and economic development but to the waging of war. He oppressed not Hamas and Islamic Jihad, but the majority of Palestinians who for years had been quietly working out an uneasy but pragmatic modus vivendi with Israel, a real if informal peace.

Arafat's 12 security services and 50,000 soldiers engaged in summary executions, kidnapping, rape, and extortion, spreading corruption and poverty wherever they went. Some of the funds donated by the United States and Europe for economic reconstruction, especially among the refugees, were simply stolen; most were used to build a war machine, paying for weapons and soldiers, as well as for the Palestinian Authority's 140,000 bureaucrats. It did not matter to Arafat and his comrades if the war they waged--the second intifada, which began in September 2000--resulted in the almost total destruction of the Palestinian economy. The Palestinian standard of living fell by more than half, and unemployment soared to 60 percent, up from almost full employment before Oslo. The more miserable the Palestinians became, the easier it was for Arafat's relentless propaganda broadcasts to rechannel public rage against the Israelis.

Even as it grew evident that Arafat had no interest in peace, the international Peace Now camp, whose adherents dominate the State Department and many European chancelleries, plunged ahead, promising ever more international meetings at which ever more concessions would be made to terrorism, encouraging Arafat's regime to attempt further blackmail of Israel by the use of violence. Now it is reported that the United States is about to reward Arafat with a Palestinian state.

True, there is talk about the need to reform the Palestinian Authority. But reform cannot be only political. If the Palestinians are to have the slightest chance of repairing their system, arrangements must first be worked out to secure law and order. Then a civilian Palestinian leadership, presiding over a demilitarized administration, should be encouraged to employ pro-market economists and political scientists to inventory the institutions still operative in Palestinian society so as to reshape some, shut down others, and establish new ones. Only then will a civilian government be able to tackle the practical problems aggravating the conflict, especially the Palestinians' dismal poverty.