The booming 'Palestinian' economy
The Wall Street Journal has a lengthy article about the booming 'Palestinian' economy in Ramallah. I want to point out a few things. First, this description of what's available. Signs of new wealth are ubiquitous here. "The Boutique," Ramallah's first haute couture clothing store, opened late last year, offering Palestinians python-skin purses by Prada for $3,000, Sergio Rossi heels, and one-of-a-kind Valentino dresses. Next door, the Zaman Café serves up Belgian microbrews, French Bordeauxs and $4 cappuccinos.People have an image that Israelis are wealthy (an argument I often see used for why we no longer need economic assistance of any kind - see "Goldberg, Jeffrey"). But what's described here are luxuries that are only available in the swankiest parts of Tel Aviv that only a very few Israelis can afford. Our income disparities are among the highest in the World (higher than those of the United States) and very few Israelis can afford the things described.
This spring, the West Bank's first licensed Mercedes dealership opened a showroom on Ramallah Boulevard. Owners say it is doing a brisk business selling luxury-class sports cars and sport-utility vehicles, with sticker prices ranging from $100,000 to $200,000, to wealthy Palestinians.
On Nov. 1, Mövenpick Hotels & Resorts made its Palestinian debut, opening the city's first five-star hotel [pictured. CiJ]. The 172-room, $40 million hotel boasts a head chef imported from Florence, a pastry chef from Paris, and a lobby bedecked in marble and Italian suede.
In the past six months, the West Bank has also seen the launch of three private-equity funds.
So far, evidence of a boom is still largely confined to Ramallah, home to the Palestinian Authority headquarters and the de-facto Palestinian capital, where civil servants in a bloated public sector spend paychecks backed by international donors.
"It's a flurry of economic activity," says Mr. Bahour, "distinct from economic activity required for statehood that won't last if the occupation continues."
Second, the article claims (and you saw part of that claim above) that the economic expansion will not continue unless 'progress' toward 'peace' continues to be made. The article goes on to give a litany of steps that Israel could take and even gives a chart that shows the difference between how much growth there will be if Israel allows the 'Palestinians' more freedom and how much growth there will be if it does not (see below).
But author Charles Levinson - the Journal's regular Israel correspondent - mentions one key fact and glosses over it. So far, evidence of a boom is still largely confined to Ramallah, home to the Palestinian Authority headquarters and the de-facto Palestinian capital, where civil servants in a bloated public sector spend paychecks backed by international donors.The only way to continue growing with a bloated public sector is if 'international donors' continue to donate money. Is that really what the world is seeking - an economy that's fueled by 'international donors'?
There are two points that bear making here. First, that the entire 'Palestinian boom' is a fraud - it's fueled entirely by international aid and it will go away the minute that international aid stops. There is no real growth underlying the 'Palestinian economy' (and what growth exists is a result of Israel generously sharing its technologies with the 'Palestinians'). Contrary to what the Levinson writes, it's not that Israel is stifling growth by not lifting restrictions; it's that the 'international community' is creating illusory growth through donations.
Second, the minute the 'Palestinians' are no longer 'occupied,' the 'international community' is likely to lose all interest in assisting the 'Palestinians.' After all, once there's no prospect of opposing the Jews and their state, why bother to support the 'Palestinians'? What will happen to the 'Palestinian economy' then?
What could go wrong?
Read the whole thing.
Labels: international aid, Palestinian economy, Ramallah, Salam Fayyad
posted by Carl in Jerusalem @ 8:43 PM
2 Comments:
The Palestinian economy has no real productive value. Its not self-sustaining in any true sense of the word. In the highly unlikely event the Palestinians get a state in the near future, their problems will only begin.
What could go wrong indeed
Heh, nice pun in the headline. That's the only real indigenous economy of the paleos - boom-booms and those who boom-boom themselves.
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