Much is written about Israel/Palestine, but fresh insights are rare. Whether the subject is the endless and barren “peace process” or the fact that Israel responds brutally to Palestinian street protests, there are few surprises. It is somewhat unusual when the 14-year-old shot by an Israeli sniper at a West Bank demonstration turns out to be an American citizen, but the fact is America officially doesn’t care very much when Israel kills its citizens, requests for a “speedy and transparent” investigation of the incident notwithstanding. When Israel pummels Gaza on flimsy pretexts, this too we’ve seen before–mowing the lawn, as the Israelis say.
So there was something genuinely unique about this short piece by economist Robert Wade in the London Review of Books. Written with an economist’s eye but in non-specialist language, it gives an informed sense of how the occupation burdens the daily lives of Palestinians on the West Bank, beyond the sporadic flashpoints and confrontations. And it is shocking.
Israel seems to be the only country in the world which makes a systematic effort to keep impoverished part of the population it governs. The average Israeli income is $4ok a year, 11 times the average for a West Bank Palestinian. The Israeli foreign minister Avigdor Lieberman recently said that no independent Palestinian state would be possible until average Palestinian income rises to $10K a year, a figure which presumably would give Palestinians vested material interest in making sure the provisions of a settlement would be maintained. But the catch is that Israel’s occupation policies are designed to thwart Palestinian economic development and ensure that level can never be reached.
Wade gives numerous examples. He begins in Hebron, the important West Bank town where a handful of Israeli settlers control the apartments overlooking the once thriving central market, regularly emptying their garbage on the Palestinians below. Palestinian access to the market is controlled through certain checkpoints (so the settlers never have to cross paths with Palestinians). He describes one scene where market-bound canned goods are transported by cart to one side of an Israeli barrier, raised by a pulley over the barrier, then loaded onto a a cart on the other side. The transaction costs are obviously passed on to Palestinian consumer. Later he describes a farmer, who has to cross the security barrier–through a gate Israel opens only three times a day,–to reach his crops and fields. To pass, he needs an Israeli permit, which has to be renewed every two months. Last year when he applied, during the harvest period for his crop of green tomatoes, Israel delayed granting of the permit for 40 days. The tomatoes rotted.
In Area C of the West Bank, controlled by Israel, goat herders are not allowed to build toilets without an Israeli permit. Nor repair a water cistern. Nor use solar energy panels. The permit system goes all the way up the economy. After the Oslo agreement of 1992, the Palestinians supposedly gained the right to construct their own telecommunications system. But the small print said that Israel would allocate the frequencies. Unsurprisingly, Israel has not done this generously. Palestinians have difficulty accessing the internet or email on their phones because Israel has not allocated the frequencies need for 3G, for “security reasons”. Of course Israel’s West Bank settlers have access to 3G networks. Telecommunications equipment the Palestinian Authority purchased from Ericsson languished for two years in Israeli customs, while Israelis performed “security checks” on it. West Bank trade with Jordan has actually diminished, because Israel controls the only bridges which cross the Jordan River. The occupied West Bank may be the only place in the world with a smaller amount of foreign trade as a proportion of GDP than 20 years ago.
Wade’s conclusion about the overall economic impact of the Israeli occupation is devastating. While the separation wall, and the land seizures which went along with its building are relatively well known in the West, Wade adds:
[T]he restrictions also cover the movement of people, the import and export of goods and services, investments, and access to basic infrastructure (electricity, water, sanitation). They are so pervasive and systematic that it almost seems as if the Israeli state has mapped the entire Palestinian economy in terms of input-output relations, right down to the capillary level of the individual, the household, the small firm, the large firm, the school, the university, so as to find all possible choke points, which Israeli officials can tighten or loosen at will.
Robert Wade is a prominent, widely traveled, developmental economist of vast experience, a winner of the prestigious Leontieff prize, a top award in the field. He concludes that the restrictions Israel has imposed on Palestinian economic life are unlike anything he has ever seen anywhere else in the world.
The ideology of the free market is as popular as ever in the Republican Party, and few would be so foolish as to deny its usefulness and explanatory power. So here is a wishful fantasy: that some of the “young guns” of the House Republican caucus, acolytes of Milton Friedman to a man (or woman), might read and contemplate Wade’s analysis—a prime example of the anti-market impediments in action, in a far-from-insignificant part of the world, where the United States spends a great deal of blood and treasure. Of course this is highly unlikely; it would it raise for them questions which are too politically uncomfortable. They, like most of their Democratic colleagues, prefer to cover their eyes and ears while pledging more American taxpayer dollars to Israel, the so-called “start up nation.”
Scott McConnell is a founding editor of The American Conservative.