Charity Economics, Subservient Politics: Why Oslo Must Go

Category: Featured, Middle East, World Affairs Topics: Economy, Occupation, Palestine Views: 2912

Olmert, Abbas, Fayyad in Jerusalem, September 2007

Recent demonstrations in protest of the rising cost of living have swept across the West Bank. While they are not indicative of a Palestinian version of the 'Arab Spring', they are still an important first step. 

A reasonable demand, however, cannot possibly be for Ramallah-based Palestinian Authority President Mahmoud Abbas to sack the government of Salam Fayyad. Neither has much sway over Palestinian economy, let alone political will. 

Abbas enjoys Israeli and Western backing because of his ability to manage - if not sustain - a factional split between his party, Fatah, and Hamas, which controls Gaza. He remains faithful to security coordination between his authority and Israel, and continues to crack down on his opponents with an iron fist. He is also desperately clinging to a loyalty to Washington policy - despite the fact that the latter's prestige and influence is quickly diminishing in the region. In an era of numerous political possibilities, Abbas, 76, is fervently traditional, lacking in nerve and by no means capable of revolutionary change. 

While Abbas is perceived as America's man in Palestinian, Fayyad is an economic equivalent. His years at the International Monetary Fund (IMF) and his Western-driven branding as pragmatic, non-factional and incorruptible made him most suited to lead the post Hamas-Fatah split period. Since 2007, Fayyad has reigned supreme. His conduct, language and demeanor have signaled a departure from the Palestinian politics of old - when revolutionaries with military fatigues seemed to be driven, at least rhetorically, by nationalistic slogans concerning liberation, freedom and the right of return. 

Abbas and Fayyad helped to redefine the old Palestinian discourse, a process that started following the Israel-PLO signing of the Oslo Accords in September 1993. The accords were touted as signaling a new age of mutual respect, peace and security. In reality, they only cemented the status quo, allowing Israel to continue expanding its illegal settlements and determining every political outcome based on a protracted colonial vision. While no Israeli leader - left, right or center - has since deviated from this vision, Palestinians have grown in number within an ever shrinking space. 'Palestine' has been sliced off into numerous cantons, with an isolated population center dependent on precarious international handouts.

For years, Abbas and Fayyad oversaw the financial transaction, which was more of a pyramid scheme than a state-building measure. Funds arrived from multiple sources, including tax revenues collected by Israel on behalf of the PA. In addition to controlling the Palestinian borders, 62 percent of the West Bank (Area C) and even the exit and entry of Palestinian leaders, Israel also controlled every aspect of the Palestinian economy. The Paris Protocol, signed in 1994, was meant to regulate the transition in the Palestinian economy. Nearly two decades later, the protocol has become the very rope by which Israel continues to strangle Palestinians. When the latter fails to play by the (Israeli) rules, Israel adds more military checkpoints, refuses to transfer Palestinian tax revenues, and so on. Within days, the 'Palestinian economy' begins to grind. 

In the West Bank, the Keynes vs. Hayek economic debate matters little. Even 'dependency theory' in its standard application is of no use. The West Bank has subsisted on a charity-model, with many middlemen who accumulated unimaginable wealth from money that was meant to trickle down. Not only did Oslo turn a struggle for liberation into a massive charity network riddled with corruption and nepotism, it also managed to turn the process - as in the 'peace process' - into an end in itself. Few Palestinians benefited, and the vast majority had to fight for their survival. As for Israel, the bulldozers never slowed down and settlements continued to expand at the expense of Palestinian land, leaving no room for any kind of 'state'. Over time, the 'two-state solution' became a mere brand which helped separate Palestine's 'extremists' from its 'moderates'.

Now, the Palestinian Authority is not only politically bankrupt, it is financially broke as well. Future prospects look even grimmer than the current reality. A recent report by the UN Conference on Trade and Development (UNCTAD) downplayed the hype over the supposed economic prosperity in the West Bank. "Economic expansion last year was accompanied by a decline in real wages and labor productivity and did not succeed in reducing high unemployment, which persisted at 26 per cent," said the report. The growth in Gaza's economy also proved to be a ruse, since the 'growth' was mere mathematical guesswork based on Palestinians' ability to rebuild what Israel destroyed in its December 2008-January 2009 war on Gaza. "Food insecurity affects two of every three Palestinians in the occupied Palestinian territory, but is most severe in Gaza. Also alarming is the poverty rate in East Jerusalem, estimated at 78 per cent," reported UNCTAD. 

While the political aspect of Oslo has been dead and buried for years, it continues to exist as a financial matter. The Israeli government of Benjamin Netanyahu looks on as the house of sand they built with their Palestinian 'peace partners' crumbles. Israeli journalist Amira Hass reminds Palestinians that their real fight is with the occupation, not price increases enacted by a largely helpless authority. While it is true that the enemy remains the solider and the settler, much enmity towards the PA is also likely to play out in the future. 

While Israeli Foreign Minister Avigdor Lieberman continues his outbursts targeting Abbas and Oslo, Netanyahu has ordered the transfer of NIS 250m of tax revenues to the PA in order to delay its potential collapse. Still, Israel has no intention of abandoning its carrot and stick approach to dealing with Palestinians. Deputy Foreign Minister Danny Ayalon was crystal clear when he said that Israel would not renegotiate the Paris Protocol (UPI, September 10).

How long the PA can continue to operate as a functionary of Israel and Western interests will now largely depend on Palestinians. Even if more money is pumped into PA coffers, the fundamental problem will not go away. Bribing a nation with meager handouts to deny them political rights is superfluous at best, and it will most certainly not last. 

There are new calls for the dismantling of the Palestinian Authority. For these calls to be meaningful, they need to be accompanied by a unifying transitional political program which will guide Palestinians out of the temporary chaos that is likely to follow. The program must be a part of a larger vision, one that looks past charity-economics and frivolous talks of two-state solutions, and which actually bridges the gap between divided Palestinian communities.


Ramzy Baroud ( is an internationally-syndicated columnist and the editor of His latest book is "My Father Was a Freedom Fighter: Gaza's Untold Story" (Pluto Press, London), now available on

  Category: Featured, Middle East, World Affairs
  Topics: Economy, Occupation, Palestine
Views: 2912

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