Bruce Hoffman

Back to the Well

As the latest American-brokered Palestinian-Israeli peace talks begin in Washington, D.C. the one bright spot in what has been a historically dismal picture of false starts, dashed hopes and inchoate initiatives is the West Bank’s thriving economy.

A fascinating article on the opinion page of Thursday's Wall Street Journal by Hussein Ibish and Michael details how

The West Bank economy grew by 8.5% last year (according to the International Monetary Fund), despite the global recession and regional factors inhospitable to foreign investment. Palestinian GDP for the third quarter of 2009 was $1.24 billion, up from $1.18 billion the year before. Real estate in the West Bank booming, property prices in Ramallah have risen 30% in the last two years, according to local developers.

A thriving and robust Palestinian economy has always been front and center in the hopes on all sides that peace might yet be achieved between Palestinians and Israelis. “We want the skyline of the West Bank to be dominated by apartment towers, not missiles," Israeli Prime Minister Benjamin Netanyahu declared at the start of the talks. “We want the roads of the West Bank to flow with commerce, not terrorists.”

For more than a century in fact, one of the main arguments marshaled by pre-state Israel’s reconstituted Jewish community and later by Israelis was the collective economic benefits that Zionism would bring to all peoples in the region—Jews, Palestinians and Arabs in surrounding countries alike.

Technical expertise and knowledge would come both with Jewish immigrants and an increasingly globalized world that ipso facto would lead to increased investment, more jobs and thence, communal prosperity. In this manner, everyone would benefit from higher standards of living and a thoroughly modern and continually modernizing society. Even the poorest of the poor, it was hoped, would be lifted from abject poverty to enjoy the fruits of an expanding middle class and the peaceful co-existence that would make it all possible.

In the perennially sui generis case of Palestine, however, this sadly has never occurred. Throughout the long and frustrating history of attempts to bridge the chasm between Jews and Arabs, nationalism and radicalism mixed with religious zealotry have always trumped economics and commonsense.

Throughout the early 1930s, for example, while the rest of the world was mired in a succession of grave economic, political and diplomatic crises, what was then British-ruled Palestine was thriving. Much like the West Bank today, business was booming, government revenue was up, bank deposits were high, industrial development was strong and building and other capital projects were transforming a region that only a decade or so before had been an economic deficit, stagnant backwater of the decaying Turkish Ottoman Empire.

Palestine’s Jews and Arabs and their British rulers might therefore be forgiven their belief at the time that the new decade heralded a new era of peace and prosperity for Palestine in contrast to the inter-communal bloodshed and disorder that had characterized the previous one—and, tragically, would overshadow every decade since.

Yet, despite the confidence and optimism that permeated Palestine then, intractable Arab fears of a permanent Jewish presence in that corner of the Middle East over-rode whatever benefits and munificence the vastly improved economic climate brought. Indeed, in April 1936, what Palestinians still call with tremendous pride, “The Great Arab Revolt,” erupted.

A massive wave of violence and bloodshed directed against both the Jews and Palestine’s British suzerains swept through the country for three long and horrific years. The rebellion was brutally suppressed by British military forces that had to be diverted from Europe to Palestine on the eve of World War II. When it finally ended, Palestine’s Arabs had been battered and defeated—politically bankrupted and economically destroyed.

“I knew it was useless to argue that Jewish immigration has hitherto been the cause of material benefit to the Arab people,” Sir Arthur Wauchope, then the most senior British official responsible for Palestine’s governance, had explained at the revolt’s outset to his boss, the Colonial Secretary, William Ormsby-Gore. “For the Ulemas [Muslim scholars with authority in religious and legal matters] and the Arabs are not thinking of material profit or loss, nor of the past: they are all dominated by the fear of what may happen in the future if [Jewish] immigration be not stopped and their minds are not open to argument.” Indeed, just over a decade later their darkest fears were realized with the establishment of Israel.

Half a century later, the Palestinians would again turn their backs on unparalleled economic growth and prosperity when they launched the Second Intifada in September 2000—an uprising that, though diminished since 2004, nonetheless still smolders today.

That it is prosecuted mainly by the radical religious-nationalist movement Hamas, as much the arch enemy of President Abbas and the Palestinian Authority as they are of Israel, and whose power base is not in the West Bank but in the war-torn, economically bereft and deficient Gaza Strip, augurs dismally for the prospects of any sort of decisive resolution emerging from the current talks.