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February 14, 2019 8:09 am

Is There Hope for the Palestinians — and the Peace Process?

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avatar by Ian Cooper


Palestinian Authority President Mahmoud Abbas walks inside a hospital in Ramallah, May 21, 2018. Photo: Palestinian President Office (PPO) / Handout via Reuters.

When Palestinian Prime Minister Rami Al-Hamdallah submitted his resignation to President Mahmoud Abbas last month, it was yet another reminder that Palestinians remain mired in a crisis of leadership and a cold civil war between their dominant factions.

For some, the ongoing spat between the Hamas terrorist organization and Abbas — a so-called moderate and sometime Holocaust denier — is a tragedy. An optimist, however, might see the current situation as an opportunity for more capable leadership to emerge.

Unfortunately, there are powerful incentives to ensure that Palestinian society remains dysfunctional.

At the root of the problem is the unquestioning pursuit of Palestinian statehood and the acceptance of armed struggle as a means of achieving that goal.

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There is nothing wrong with the idea of Palestinians wanting their own country. But unfortunately, the push for Palestinian statehood that followed the signing of the 1993 Oslo Accords led to an explosion of the Palestinian bureaucracy that made the formation of a real economy all but impossible.

Once Palestinian leaders and international donors decided that Palestine would be an independent nation, they began building institutions for a country whose founding was far from certain and would indeed be impeded by an entitled bureaucracy that feasted on whatever scraps the real economy might be able to produce.

Consider the following statistics:

According to a 2016 World Bank report, the Palestinian Authority spent approximately 17 percent of gross domestic product (GDP) on public sector wages. This figure does not include amounts paid by the Hamas government in the Gaza Strip, which likely adds an additional 3-4 percent to the total.

Spending more than 20 percent of GDP on government salaries is incredibly unproductive, and that figure appears to be rising. More troubling is the fact that the government’s workforce is not all that large, meaning that this largesse is enjoyed by a small minority of people who enjoy high salaries relative to those of ordinary citizens. Other factors, including a stagnant economy, a generous pension system, and a demographic pyramid that skews toward a high number of unemployed young people, create intense competition for government jobs.

An examination of the 2016 Annual Report of the Palestine Monetary Authority adds further color to this grim picture, as it highlights the fact that the security and public order sector consumes approximately 44 percent of government wages. The Ministry of Education and Higher Education, meanwhile, accounts for only 29.2 percent, and the Ministry of Health for 9.6 percent.

As Elliott Abrams observed in a survey of corruption within the Palestinian government, the ranks at the top of the Palestinian security services are particularly bloated, with a ratio of two soldiers assigned to every senior officer. This compares to a ratio of nine to one in Israel and five to one in the United States. One can debate whether the Palestinian government is corrupt or merely inefficient, but regardless, it places an enormous burden on the Palestinian economy.

The notion that Palestine must achieve nationhood through armed struggle is closely related to this problem. To begin with, there is a perverse symbiosis between the Palestinian security elite and militant groups. Mitt Romney once took flak for claiming that the Palestinians had no interest in peace with Israel, but he had a point.

The people consuming nearly half of all public sector wages (and approximately nine percent of GDP overall) in the Palestinian territories would lose their raison d’être in the absence of a security crisis. As a result, while the Palestinian security forces keep terrorism on a low boil, it is far from obvious they have any incentive to see terrorism disappear completely from the Palestinian toolkit.

This delicate dance plays out most obviously in the various benefits paid to the families of so-called martyrs and to militants languishing in Israeli prisons. There is a lively debate over how much the Palestinian authorities actually pay to terrorists, but it is indisputable that a meaningful amount of the government’s scarce funds go toward paying individuals who engage in armed attacks against Israeli government targets and civilians. That is a rather odd state of affairs given that many of these same militants are closely watched and routinely arrested by their government’s large and highly paid security apparatus, which cooperates closely with Israel’s own security forces.

If paying freelance militants to attack Israelis while generously compensating police to arrest them sounds like terrible economic policy, the vilification of Israel is arguably worse. A rather interesting tool from Rand International allows one to calculate the costs of the Israeli-Palestinian conflict for each side, under different scenarios. The assumptions behind the math are a bit opaque, but what is clear is that although Israel loses more from a violent Palestinian uprising in absolute terms, because of their smaller population and much smaller economy, the Palestinians pay a much higher cost in relative terms. As a result, the strategy of either outright denying Israel’s right to exist (the Hamas playbook) or attempting to slowly extinguish the Jewish state by political maneuvering on the international stage (the Palestinian Authority playbook) is self-defeating folly.

From the perspective of 1948, Palestinians had reason to view Israeli statehood as a nakba (catastrophe). After all, it was far from obvious that Israel’s leaders had any special sauce to create peace and prosperity that Palestinian leaders or neighboring kleptocrats lacked. But from the perspective of 2019 it should be obvious that Israeli prosperity presents a unique opportunity and a model by which Palestinians might achieve the same goals. For example, the Palestinians paid an enormous price when Israel decided to prioritize its security concerns during the first intifada and replaced Palestinian workers with migrant workers from countries such as Thailand, Bulgaria, Moldova, and Romania.

Any Palestinian government that takes seriously the needs of its people should actively pursue opportunities to find jobs for the massive number of unemployed young people in the West Bank and Gaza Strip — and Israel is an obvious place to do that. Indeed, a small number of Palestinian workers are already employed in Israel’s technology sector, and given that the Palestinian Authority graduates approximately 3,000 computer science and engineering students each year, one would hope to see that trend increase.

Rather than dusting off tired warrior slogans about the Zionist enemy, a competent Palestinian government would do well to recognize Israel’s right to exist, convincingly disavow terrorism, and look for opportunities to build a mutually beneficial relationship with the Jewish state.

The challenges of achieving peace and prosperity for Palestinians are enormous, but if the time has come for Abbas to call it a day at year 15 of his four-year term and for Palestinians to realize that Hamas is also a dead end, perhaps there is cause for hope after all.

Ian Cooper is a Toronto-based entertainment and technology lawyer.

The opinions presented by Algemeiner bloggers are solely theirs and do not represent those of The Algemeiner, its publishers or editors. If you would like to share your views with a blog post on The Algemeiner, please be in touch through our Contact page.

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