Economist

Palestine: It will cost you


Here was the cover from The Economist, in April 2012.

The UK magazine, in editorializing against Scottish independence, argued:

“The future, however, looks much dicier [for an independent Scotland]. This is a stormy economic world, and an independent Scotland would be a small, vulnerable barque. It would depend on oil for some 18% of its GDP, making it subject to shifts in global commodity prices. Though high oil and gas prices have pushed up tax revenues, if they drop production as well as receipts would plummet. The richest reserves have already been exploited, leaving inaccessible oil that becomes uneconomic when prices fall. North Sea production has been falling by about 6% a year for the past decade. Eventually the oil will run out entirely.”

“A small country is more vulnerable to other shocks. In 2008 the British government had to bail out Royal Bank of Scotland (RBS) and HBOS, Scotland’s two biggest banks.”

“…if they vote for independence they should do so in the knowledge that their country could end up as one of Europe’s vulnerable, marginal economies.”

Now, close your eyes, and imagine if the Economist had employed similar logic with another group’s national aspirations.

While Scotland had a Gross Domestic Product in 2011 of $186 billion, the West Bank’s was $12.79 billion.

More facts to consider which may make you wonder why the push for Palestinian statehood has taken on something of a religion among the activist class:

  • The PA receives an enormous amount of aid each year from Western states, largess unlikely to end, or even decrease, in the event of statehood.The UK provided £78.8 million. Other countries which provided the PA with enormous amounts of aid are as follows (all calculated in U.S. dollars: U.S.: $667 million, EU: $600  million, UNRWA: $476 million, Arab countries combined: $110 million, Norway: $108 million Spain: $101 million, Germany: $89 million.
  • While the Palestinian economy remains in a state of “severe fiscal crisis”, wages for Palestinian Authority staff eat up a remarkable 20 per cent of their total GDP, according to a World Bank report recently released.
  • Despite this continuing budget crisis of their own making, Palestinian Media Watch recently reported on the salaries paid by the PA to terrorists and their families – which, in total, is the equivalent of over $51 million per year.

In short, there is every reason to believe that the new state of Palestine would be an economic basket case, at the very least, and dependent for years to come on foreign largess.

However, the Economist was only expressing skepticism towards Scottish independence due to such economic factors, not, as in the case of Palestine, fears of a newly sovereign state which could launch deadly terrorist attacks, continue fomenting a culture of antisemitic incitement – a nation which indoctrinates their citizens with the belief that they can never, ever, live at peace with a Jewish state.

“Palestinianism” has never been, for all but a small number of its proponents, a sober reflection of the social, economic, political, and military costs and benefits of creating the 23rd Arab state (next to the world’s only majority Jewish state). 

No, such advocates typically can’t be bothered with such quotidian concerns, messy realities and real world consequences.

The chic Palestinian political badge they wear so proudly will not be parted with so easily.

46 replies »

  1. False analogy. Scots are full citizens of the UK, so discussing whether independence would be profitable or not is central. Palestinians are not citizens of Israel. Giving them independence is a civil rights issue, not an economic one. If you don’t want an independent Palestinian state, you will have to annex the WB/Judea-Samaria, or keep a situation in which a population hasn’t their civil and political rights recognized.

    You have to compare it with situations like South Sudan or Timor Leste, where independence was sought not for economic reasons, but for political ones.

    Most independences are costly. The US independence almost bankrupt the colonies. Ireland was a basket case for ages. Israel struggle for a while. If Palestine is declared independent it might become a basket case, but it’ll be their basket case.

    Incidentally, Barak has said that Israel should consider unilateral disengagement from the WB/Judea -Samaria. He’s not the only one saying it, and somehow I do think there might be some moves towards that direction.

  2. And, Juan, the overwhelming majority of Palestinians technically govern themselves (Yet, Abbas is serving the 8th of a 4 year term, and Hamas isn’t going to hold elections any time soon, as we all know). But, respectfully, I think you’re missing my broader question. I think it’s amazing that the ‘question’ of Scottish independence is even being debated, and that the terms of that debate are whether or not a free Scotland will be an economic drain (a proverbial ‘basket case’). If those were the terms of the debate for ‘Palestine’ I don’t think anyone would seriously be arguing that a new Pal state would be prosperous.

    But, to be fair, are you arguing that it would be economically successful? Seriously? Would would its economy be based on?

    And, further, are you arguing that it would be liberal in even the broadest sense of the term towards women, gays and religious/ethnic minorities?

    And, would it be peaceful towards its Israeli neighbors?

    Again, I’m not necessarily opposed to Palestinian independence in principle, but the issue is so much more complicated than almost everyone who advocates for it acknowledges…and would appreciate a discussion which is based on these facts.

    • Adam can you name a truly ‘independent’ country anywhere in the world?

      Economically even the mighty USA is affected by economic events elsewhere. The U.K., although not part of the Eurozone is troubled and affected by events within countries that are part of the Eurozone. Does anyone seriously believe that the U.K. Government gave a bilateral loan to the Irish Government for any reasons other than the complete collapse of the Irish economy would seriously damage the U.K. economy.
      So if major, and mature, economies are no longer ‘independent’ how can anyone seriously believe that an ‘independent’ economy could be built in a country that has yet to be formed.

      Politically take the case of Scotland first. As I understand it the position of the SNP (Scottish National Party) is that at ‘independence’ Scotland will be ‘independent’ of the U.K. Government, retain sterling as its currency and remain a full member of the EU. I can think of at least two other member states of the EU that would not be happy with the prospect of regions/countries within them seperating and being allowed to become full members of the EU.
      Would all Arab countries be happy, or even allow, an ‘independent’ Palestine to be formed? Would Jordan or Lebanon forsee problems with its own population of ‘Palestinians’ wanting either to seperate to join the new ‘independent Palestine’ or even form their own countries?

      In todays world we are all interdependent not independent, both economically and politically. I wonder if the champions of an ‘independent’ Palestine have really thought through not only how to get there but what would happen if they ever did.

    • They govern themselves to an extent. Great advances has been made towards that direction, but they’re not an independent country nor citizens of Israel. The ultimate decisions such as border control, tax collection, etc. are controlled by Israel. Israel calls the WB/Judea-Samaria occupied territories for a reason. The two cases (Scotland and Palestine) are of a very different nature, and that’s why nobody discusses Palestine in the same terms.

      To your questions:

      “are you arguing that it would be economically successful?”

      I said it might become a basket case, so I contemplated the high probability that it’d become a shithole. But you never know. Fayyad has been quite successful in rescuing the Palestinian economy from the ashes. Things might go very wrong, but they might go well too (see Timor Leste. An economic failure at the beginning, which is experiencing a boom).

      “are you arguing that it would be liberal in even the broadest sense”

      I doubt it would. But I’ll never say never. I operate under no illusions, I know the team I’m ploughing my fields with. The state of Palestine would very probably be quite illiberal. But an occupation is never a liberal situation either.

      “would it be peaceful towards its Israeli neighbors?”

      Actually, I don’t know. I agree with Eamon Mcdonagh on this one (he used to contribute for Z-Blog, not an enemy of Israel).

      http://eamonnmcdonagh.wordpress.com/2011/11/06/in-response-to-an-interlocutor-on-facebook/

      I think Israel should either annex the whole territory to the Jordan River (and declare all its inhabitants citizens – something I know you don’t like), or withdraw and recognize the Palestinian state. After that, they should treat Palestinian violence as a casus belli. If the Pals have their state and they attack Israel, they will be treated like any other hostile state, their violence will be responded with full military might…. and as we say over there were I come from, “ahí veremos si son tan machos”

  3. The problem always is that as soon as the word Palestine is uttered sense flies out of the window and sentiment takes its place.

  4. Ok I’m persuaded. One democratic state between the river and the sea it is then, where everyone has full civil/ political rights and freedom of movement and settlement. I bet Moshe and Rachel in Tel Aviv just can’t wait for Mohamed and Fatima from Nablus to move in next door.

    • I’m always amazed at the number of people who believe (wrongly) that this conflict is primarily about ‘civil rights’ for Palestinians.

  5. The Labor government in Australia is going to provide $90 million for Palestinian schools, health and education so they can teach them more to hate us, Christians and Jews, is this a joke or they think we are stupid?? what about Australian health, education,schools, where our children don’t have air conditioning when the temperature can reach 40+ deg and more what about education, health our indigents people and seniors? we had enough of this gov lies!! GET THEM OUT OF HERE!!

  6. All the Arab states combined give a paltry 110 million.the rest of the Western world gives the rest.What is with this sick obsession that the West has with these palestinians………

  7. one has to wonder if the economic underperformace of the west bank might have something to do with the fact that much of it is under military occupation…

    • No, actually, quite the opposite is true. WB pals have been much, much better off in every conceivable economic and political category between ’67 and today than during Jordanian control prior to 67. If you don’t believe me I’d be happy to provide you with links. (And, btw, about 2 percent of pals are in area c, that is under Israeli military occupation.)

      • being better off in 2012 than in 1967 is hardly a spectacular achievement. and while the majority of palestinians don’t live under direct occupation as you point out, it’s kinda absurd to imagine that checkpoints, settler violence, etc aren’t taking a serious hit on the palestinian economy.

    • Sam for a, self-proclaimed, Marxist your analysis is shallow and wrong.

      From the ‘About’ section of your own website;
      “I am unashamedly Marxist, ambiguously utopian, prone to dilettantism, emotionally shallow, unbearably pretentious, obtrusively opinionated, reflexively cynical, snobbish, hedonistic, self-destructive, neurotic, narcissistic, and probably not nearly as smart as I think I am.”

      You should remove the word ‘probably’ from the last sentence and replace it with the word ‘definitely’.

        • Sam sorry but I genuinely do not understand your question.
          “mind explaining exactly what about is wrong though?”

          I will try to explain when I know what you are asking for an explanation about.

          • you said my analysis is shallow and wrong, and implied that i am misusing or neglecting the tools of marxian criticism. please elucidate.

            • Sam what analysis?
              When I questioned it earlier your response was “more an observation than an analysis”. Clearly, even you can see that it could not be properly described as an ‘analysis’ Marxist or otherwise.
              Although I do agree that your self-analysis, with the amendment I suggested, as quoted above from your own website is accurate.

              • By the way Sam. I have no objection to discussion or debate with most people, but, I have no time whatsoever for time-wasters and clowns.
                At the top of my list of time wasters are those such as this one from the blog ‘Anne’s Opinions’

                “Sam Kriss says:
                31 May 2012 at 13:59 pm

                as it happens i was born in israel. and on the newest post on my blog, i recount some experiences from being in the country. i’m not going to respond to the rest of your post because i’m drunk and tired,”

                • i fail to see how what i posted elsewhere has any relevance whatsoever to the topic at hand. although you seem to be far more interested in discussing my person than the effects of the military occupation on the palestinian economy maybe we’re working with different sets of criteria here…

              • you said: “Sam for a, self-proclaimed, Marxist your analysis is shallow and wrong”

                1) what analysis are you referring to? my comment on this post? my own posts?

                2) what, specifically, about it is shallow and wrong?

                these are not difficult questions. if you have a critique to make then make it. don’t flail about making circumlocutious ad hominems.

                • Sam to answer your questions.
                  1) I am referring to your use of the term ‘military occupation’

                  2) it is shallow and wrong, because as you should know the use of emotional terms such as ‘military occupation’ are a crude attempt to form images in the mind and cannot by any stretch of the imagination be construed as a concrete analysis of a concrete situation, which if you are a Marxist you should know is the classic definition of a Marxist analysis. That is why your ‘analysis’, although I note that you later changed it to observation is shallow.

                  Wrong because I do not accept that there is, to use your emotional term, a military occupation. Yes there are troops and members of the security services on the ground, but this in itself does not constitute a military occupation. If the fact that there are troops and members of the security services present meant that an area was under ‘military occupation’ then very soon, during the Olympics, you could describe London as being under ‘military occupation’ which of course would be very silly and wrong.

                  • hahahaha dude seriously? military occupation is not an emotional term, it is a concrete and objective phrase with a well-established international legal definition. you may not believe that that the west bank is under israeli military occupation, and you’re entitled to that (frankly weird) opinion, but that fact has been recognised by the governments of israel and the united states, along with the united nations. whatever your opinion on those bodies, it’s something of a stretch to pretend that they are all in fact wrong and that the idf is not engaged in a military occupation.

                    is there any legal distinction between an occupation and the act of a state merely placing troops and members of the security services on the ground in an area not under that state’s sovereignty? what term other than military occupation do you believe has a place in concrete analysis? has the fact that london is recognised by all relevant bodies to be under british sovereignty somehow escaped you? do you not have the first clue what you’re on about? i have the sneaking suspicion that you decided to attack me on the basis of my marxism first, and are now scrambling to find some appropriate justification for it. hence your comment, which borders on the surreal.

                    ps: what is language in general if not an ‘attempt to form images in the mind’?

                    • “i have the sneaking suspicion that you decided to attack me on the basis of my marxism first”
                      Then your suspicion, much the same as your analysis/observation, is wrong. I have known and respected a number of Marxists over the years sometimes I’ve agreed with them and other times I’ve disagreed with them. I have yet to see any evidence that you are a Marxist other than your declaring yourself to be one.

                      “ps: what is language in general if not an ‘attempt to form images in the mind’?”
                      Language is a method for communicating and exchanging information, your use of emotional terms is a cheap and discredited method in an attempt to form a mental image in the mind of others to support your views also known as propaganda.

                      “hahahaha dude seriously” that is a very juvenile phrase and way of expressing yourself, if you ever want to be taken seriously try expressing your thoughts in an adult fashion.

                      “do you not have the first clue what you’re on about?” Yes I have the first clue what I’m on about. If that is the question, it is hard to tell from the way you structure your sentences.

                    • you seem to have little in your mental arsenal aside from tedious semantic wrangling and unproductive condescension. you have yet to make anything close to a substantive critique of anything i’ve posted. in your strange world ‘military occupation’ is an emotive term, marxism requires some esoteric initiation rite, and the act of communication itself is somehow ‘discredited’. i guess that last one accounts for the asemic vacuity of your comments. with hasbara disseminators like yourself it’s no wonder zionism is steadily losing ground in the war of ideas.

  8. Questions:

    – Why are two dozen “Israeli locations” marked on the map, but only eight Palestinian towns?
    – What does “Areas offered Israel” mean?
    – Shouldn’t it be up to the Palestinians to decide whether they want to make the move to independence?
    – You do know that the phrase “creating the 23rd Arab state” is commonly used by online trolls opposed to an independent Palestinian state for reasons that have nowt to do with economics?

    • As far as the map, it was just the one I quickly found which fit in the magazine photo using the primitive/free software I have.

      Your 2nd question: 1st, they were offered statehood 3 times since 48 and turned in down 3 times. But, while this is a longer answer, Israel has a lot to lose by the creation of a Palestinian state w/o proper security guarantees and we most certainly, in my view, have a lot to say about the decision.

      Lastly, simply pointing out a sense of proportion. It’s not simply a talking point to note that the ration of Arab to Jewish land in the Middle East 640 to 1….yet Israel is called expansionist. Remarkable inversion of reality.

      • As for #2 – My query was simply about whether it should have read “areas offered TO” or “BY” Israel.

        Israel has a lot to lose by the creation of a Palestinian state w/o proper security guarantees

        That is an absolutely valid point IMO – but as for the potential stability of an independent Palestinian economy, isn’t that for them to decide?

        Lastly, simply pointing out a sense of proportion.

        That, however, is not a valid argument when it comes to Palestinian independence.

      • As for the “Israeli locations” on the map: a number of them are over half way across the West Bank. You can’t be telling me they were established for “security” reasons.

  9. Well, I have argued for years that declaring the WB an independent state would be a financial disaster and the only solution is to pay off King Abdullah so he can go and live somewhere else and join the WB to Jordan, not that Jordan is such an economic miracle either.

    But looking at the numbers, I suspect some of the richest families in the world are to be found living in the WB, skimming their 10% – 20% off the “aid”.

    • I have argued for years that … the only solution is to pay off King Abdullah so he can go and live somewhere else and join the WB to Jordan

      Yes … you’ve never shown much interest in the wishes of Palestinians, have you?

      I suspect some of the richest families in the world are to be found living in the WB, skimming their 10% – 20% off the “aid”.

      What a laughable comment. You really do despise Palestinians, don’t you?

      • You have a problem with the truth?

        Try reading some recent articles by Palestinians bemoaning the grafty among the Fatah and Hamas leaders – in their own words.

        Don’t take it from me.

        And what, exactly is wrong with giving the Palestinins the WB and Jordan not only the WB? Specially since 70% of Jordanians consider themselves Palestinians, and before Jordan takes away their Jordanian citizenship and leaves them stateless?

        • And what, exactly is wrong with …

          That the majority of Palestinians are against such a plan? As I said above – you’ve never shown much interest in the wishes of Palestinians.

          I remember you plugging this tiresome line over at CiF.

      • maybe not the richest families in the world, but it is true that there are a number of palestinians doing fairly well out of the occupation. palestinian businessmen have even invested in west bank settlements, to the tune of around $2.5bn. support for the palestinian cause doesn’t really necessitate supporting the parasites among the palestinian population.

  10. Most palestinians would rather live in an Israeli hell than in an Arab paradise.
    In fact that includes most Arabs…..