My source was right: Gaza economic growth is outstripping "Fayyadist" West Bank

Ali Abunimah

Back in June, a diplomatic source very close to these matters told me the following, as I reported on this blog at the time

World Bank figures due to be published in coming weeks are likely to show that economic growth in the Gaza Strip in the first quarter of 2010 has exceeded that in the West Bank.

While virtually all economic growth in the West Bank is a result of foreign aid, much of the growth in Gaza is attributable to a "parallel economy" that has emerged thanks to the tunnels. This has even created a small new class of nouveaux riches in Gaza.

It appears the source was completely correct. In an article headlined "IMF: Gaza's economy shoots up by 16% in 2010," Haaretz reports:

The International Monetary Fund expects the Palestinian economy to grow by 8 percent overall this year, after the West Bank economy grew by 9 percent in the first half and the Gaza Strip by a whopping 16 percent. This compares to growth of only 1 percent in Gaza for all of 2009, and of 8.5 percent in the West Bank for all of last year, according to a World Bank report published in April.

A couple of points about this. First, as the IMF points out, the economy in the West Bank and Gaza Strip is growing from a very low base, having suffered a decade of severe contraction as a result of Israel's violence, repression, blockades and movement restrictions. As Haaretz points out: "Gaza's unemployment rate remains above 35 percent, and its per capita income is still only 60 percent of what it was in 1994."

To put this in perspective, U.S. unemployment peaked at 25% during the Great Depression. Unemployment in the occupied territories, especially in Gaza has been significantly above that level year after year. So by U.S. standards, Gaza remains in a deep deep depression. Second, much of the "growth," both in the West Bank and Gaza, is the result of humanitarian aid provided by the "international community" which alleviates some of the worst effects of Israeli occupation, colonization and siege, but is only treating the symptoms. Continued long-term humanitarian aid for a crisis caused deliberately by Israeli measures acts in effect as an international subsidy for Israel's occupation and other crimes. What Palestinians need in order to see real economic growth is not more aid, but an end to Israeli tyranny, occupation and apartheid and for donors to stop using aid as a guilt-easing alternative to holding Israel accountable and forcing it to end its purposeful persecution of the Palestinian people.
But the significance of these figures is that they further undercut the narrative of the so-called "Fayyadists" -- supporters of the Israeli-backed collaborationist regime of illegally-installed West Bank "prime minister" Salam Fayyad. In their narrative, Fayyad is building the institutions and economy of a Palestinian state. They constantly tout the supposedly stellar economic performance in the West Bank with such dubious achievements as a Ramallah property bubble or laud vulgar over-consumption of such commodities as luxury cars by the Ramallah-centred Palestinian bourgeoisie. But Salam Fayyad is not building any new institutions. As a collaborator with Israel, he is working (along with Palestinian Authority "president" Mahmoud Abbas) to repress any and all Palestinian resistance to the occupation and to US-Israeli efforts to liquidate Palestinian rights through rigged US-sponsored "negotiations."

As I explained in a recent LA Times op-ed, Salam Fayyad's "state building" is an illusion and the real agenda of the Zionist supporters and boosters of "Fayyadism," is clear: it is to promote the fiction of imminent Palestinian independence and prosperity under a quisling regime in order to cover-up the reality of permanent and deepening Israeli colonization and control. That is the only purpose Salam Fayyad serves and no other. His job is thus identical to that of the bantustan leaders in apartheid South Africa. The only difference is that Fayyad, unlike the bantustan leaders, has support from the so-called "international community." But never mind – all the laudatory columns by Thomas Friedman and his ilk cannot clothe this naked emperor.