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“Barak’s Bluff
of Economic Separation between Palestinians and Israelis,”
Background: 1 December 1999—Before flying to Oslo in early November for a summit with President Bill Clinton and Palestinian Authority (PA) President Yasser Arafat, Israeli Prime Minister Ehud Barak made several pointed pronouncements indicating his preference for economic separation between Israel and the Occupied Territories. The idea is by no means new. It was a pillar of Barak’s election campaign. Just as former Israeli Prime Minister Yitzhak Rabin spoke in 1992 of “taking Gaza out of Tel Aviv,” so Barak coined the slogan: “We here, them there.” The PA is in no position to come out publicly against such a statement, since it is supposed to desire independence from Israel. Economic Interdependence: In fact, we should not take Barak’s pronouncements too seriously. The reality created by the September 1993 Declaration of Principles (also known as the Oslo Accords) makes economic separation infeasible. First, there are plain “facts on the ground.” Until 1997, when “hi-tech” began to power Israel’s exports, the Palestinian market was Israel’s biggest after the U.S. In 1995, for example, Israel exported goods and services worth $5.7 billion to the U.S.; $2.2 billion to the Palestinian territories; $1.1 billion to Great Britain; $1 billion to Germany; and $1.3 billion to Japan. The Palestinians still compete for the number two spot with hi-tech importers such as Belgium, Great Britain, and Germany. But their market does not import Israeli hi-tech goods. Instead, it takes in food, shoes, and textiles—products that keep plenty of poor Israelis in jobs. The loss of the Palestinian market would bring an increase in the already high unemployment among Israel’s weakest workers. But the main reason for the interdependence of the two economies is political. Since the mid-1980s, Israel’s economists have known that globalization was the order of the day, and in order to be part of it—since foreign investors abhor instability—Israel would have to normalize its relations both with the Palestinians and the wider Arab world. This assumption was confirmed in 1995, about a year after the signing of the Oslo Accords, when foreign investment climbed by 46 percent over the previous year and then kept climbing, leveling off only in 1998 amid a stalled “peace process,” global economic crisis, and a local downturn. From 1993 until 1997, Israel’s exports increased at an annual average of 9.2 percent. Even in 1998, while everything else slipped, hi-tech exports—one third of the total—grew by more than 15 percent. Israel’s Security Demands: In the permanent status talks, Israel will insist on keeping absolute control over the passages in and out of the Palestinian areas. This includes border crossings on land and sea and in the air. “Control over the external envelope is vital to the Oslo strategy,” writes Meron Benvenisti (Ha’aretz, 14 October 1999). If the Palestinians have the final say even at a single crossing—and thus are able to maintain direct relations with the outside world—anyone or anything could then come into Israel over the numerous “internal” borders between us and them. The very idea of trying to seal those internal borders conjures visions of Israeli soldiers everywhere, forbidding people from traveling from village to village. If Israel wants a stable backyard, it cannot both control the external envelope, regulating Palestinian passage to and from the external world, and close its own economy to them.
Defending Jordan: Jordan has always been an artificial state, carved out of the desert to suit the needs of the British Empire after World War I. Its economy does not have the potential of that in the West Bank. Under Israeli occupation, cumulative trade (1968-1990) from Jordan to the West Bank was dwarfed by trade from the West Bank to Jordan ($150 million versus $1.46 billion, respectively). If the West Bank and Gaza achieved genuine economic independence, this would threaten Jordan, first and foremost. Israel has no interest in letting the Palestinian economy develop at the expense of its long-faithful neighbor. Palestinian Dependency: Even disregarding the economic shambles in which Israel has left the Palestinians, the Oslo “peace process” has not given the Palestinians any chance whatsoever of building an independent economy. Five years after the Oslo Accords were signed, their main export is still labor. The salaries of Palestinians working in Israel make up about 40 percent of the total income in the Territories—this, despite the policy of closure. The fact that this policy continues is the saddest sign of how little Oslo provides for Palestinian workers. If a Palestinian economy is to develop, certain basics are required: territorial continuity, sufficient living space (without Israeli settlements and bypass roads), control over land and water, and control over trade, including the ability to protect local producers against foreign dumping. The Oslo agreements disallow all these things. The Role of the PA: There is one further hindrance to an independent economy, however, and that is the PA itself. During the last five years, the PA has developed a ruling elite that may fairly be described as parasitic. Its members get rich by mediating between the PA and Israel, as well as between the PA and the “donor nations.” Convinced (and rightly so) that it is impossible to build a national economy under Oslo, this elite follows the maxim, “Eat, drink, and be merry, for tomorrow we die.” That is the reason for the rampant corruption, the development of personal monopolies, and the broader economic passivity. The major task that the Oslo Accords imposed on Arafat and his associates was to build not a thriving independent economy but rather a Palestinian police state, thus enabling Israel to reach out freely to the Arab world and gain economic dominance in the region. In this way, the compulsory interdependence that characterized the period of direct occupation has been replaced with another kind: interdependence by agreement. This time, though, the dependence is between regimes, not peoples. Just as Arafat needs Barak, Barak needs Arafat. The two of them stand together opposite a poor and hungry people. Tactical Move: Why does Barak make threats of economic separation if he knows that such a step might topple his partner and undermine the Oslo peace process? The reason is political. In February, he and Arafat are supposed to sign a framework for a permanent settlement. He wants things settled at a single stroke between himself and Arafat, under the aegis of Clinton and on the model of the Camp David Accords. In such a trio, the scales will weigh against the Palestinian side. To bring Arafat along, however, he needs a tangible threat, and that of economic separation does the job nicely. As for Arafat, the sole advantage he can glean from Barak’s threats is that he’ll be able to justify his concessions by saying, “I had no choice.” Toward the end of the 1980s, during the intifada, Israel had an historic opportunity to achieve a respectable separation. It rejected this alternative, preferring to set up in its backyard a Palestinian entity that is weak, corrupt, and dependent. Wanting control over the external borders, Israel chose to swallow the Palestinian people. Israel now has to make sure that the Palestinians do not become so desperate as to cause indigestion. Unwilling to allow them freedom, Israel finds itself economically responsible for them. Such ongoing interdependence will inevitably take political expression. Whatever that may turn out to be (apartheid, for example?), we can be sure that it will not help the cause of a viable Palestinian state.
Roni Ben Efrat
is the editor of the Jerusalem-based magazine Challenge. For a
free trial copy, please send an e-mail to oda@netvision.net.il. This brief
is based on an article in the latest issue of Challenge and may
be used without permission but with proper attribution to the author and
to the Palestine Center. This brief does not necessarily
reflect the views of the Palestine Center or The
Jerusalem Fund. |
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