Arafat’s sabotage of Palestinian economic autonomy

Arafat. Foto Screenshot Youtube
Arafat. Foto Screenshot Youtube
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The vision was brave. A billion dollars, already pledged by the US, the European Union, the World Bank, and others, would be used to build seven Palestinian industrial parks and free trade zones between Jenin in the north and Gaza in the south.


It was autumn 1995. Yitzhak Rabin had just been assassinated, and his successor, Shimon Peres, promoted this plan with great enthusiasm, eager to help Yasser Arafat make Palestinians gainfully employed.

The plan was practical. Multinational corporations had already put to work tens of millions of people throughout the developing world, from Brazil to Indonesia.

Setting up assembly lines between the Jordan River and the Mediterranean that would give jobs to some 200,000 bread-winners would have been for those companies natural, easy, and cheap. Moreover, the Palestinian worker, in such a setting, would have ceased to work for an Israeli boss.

The Israeli business press awaited the implementation of the plan, for the prosaic reason that it would have generated a steady supply of exciting business stories. Editors imagined stories about Volkswagen setting up an assembly plant in Gaza, Panasonic making TVs in Hebron, and Pierre Cardin producing perfumes in Jenin.

Yet time was elapsing and nothing was happening. Calling repeatedly Israeli and Palestinian officials we first were told that Yasser Arafat was unhappy that the parks’ products would be exported through Israeli ports. Peres said they would ultimately go through a port that will be built in Gaza.

Arafat then said he was displeased with the plan’s expectation of full transparency, which he said would compromise his sovereignty. Peres then suggested that in order to respect Arafat’s grievance the plants would be located adjacent to, but on the Israeli side of the border. Arafat then said this would mean the Palestinians are not independent. Peres then suggested that the plants will be located on both sides of the border; Arafat then took more time to return.

In the meantime major terror attacks erupted, including four suicide bombings between 25 February and 4 March 1996, in which 59 Israelis were murdered. Twelve weeks later Shimon Peres lost power, and the plan with which he was largely identified was soon forgotten. Arafat had killed it.

WE NEVER received a clear explanation as for why the Palestinians dragged their feet in the face of a plan that would have given them economic momentum, social dignity, and national hope.

Four years later, when violence followed the Camp David talks in which Israel offered Arafat most of the West Bank and Gaza, suspicions arose that he had obstructed the industrial parks’ plan because he didn’t want his people to have jobs. He wanted confrontation with Israel, according to this thesis, and working people would not be available to take to the streets.

“Palestinian Authority did not use the 24 years to create a Palestinian economy.”

This impression was then enhanced by Palestinian information minister Immad Falouji’s statement to Associated Press (2 March 2001) that the violence of those days “had been planned since Chairman Arafat’s return from Camp David, when he turned the tables in the face of the former US President [Bill Clinton] and rejected the American conditions.”

Whatever went through Arafat’s mind in those days, there is no arguing that the Palestinian Authority did not use the 24 years since the signing of the Oslo Accords in order to create a Palestinian economy.

Instead, the PA has created an oversized public sector of more than 180,000 government employees whose salaries are largely fed by foreign aid. Dominated by the US, the EU and Saudi Arabia, these infusions often totaled more than $1 billion per year before declining some 25%, as plunging oil prices pressured the Saudis, while Palestinian payments to terrorists’ families slashed Washington’s payments.

Still, foreign aid financed roughly one third of the Palestinian budget, an economic deformity by any yardstick, and the direct result of Yasser Arafat’s rejection in 1996 of the plan that would have handed his people an economy on a silver platter.

THE DAMAGE of Arafat’s rejection is visible to this day, as Palestinian workers, facing a shortage of local employment, flock to work in Israel, lining up every morning at the border crossings between the West Bank and the Jewish state.

The Palestinian workforce in Israel had already declined to 28,000 in the wake of last decade’s violence, after having peaked at 110,000 before the outbreak of the first Intifada in 1987.

Now the formal number has rebounded to 75,000, besides an additional 30,000 who work in West Bank Jewish settlements and another 30,000 who work illegally within Israel’s international borders. Added up, these workers earn annually the equivalent of one third of the PA’s annual budget of $5.6 billion.

Unemployment in the West Bank plagues nearly a quarter of the workforce, but in Gaza – whose workers lost access to Israel, following recent years’ rocket attacks – nearly every second worker is jobless.

In other words, 21 years after Yasser Arafat squandered a plan that would have had the Palestinians fully employed and also severed their economy’s dependence on Israel, a critical mass of Palestinians face a choice between working for Israelis or not working at all.

BACK IN 1946, Zionist leader Chaim Weizmann – by then frail and nearly blind – addressed the Zionist Congress in Basel, where he faced a majority of younger delegates that challenged his moderation and demanded a violent struggle against the British Mandate government.

“In every house and in every cowshed in Nahalal [a farmer’s community in the Jezreel Valley] and in every little factory, whether in Tel Aviv or in Haifa – there is a drop of my blood!” said a furious Weizmann to the delegates while pounding on the lectern.

The delegates, though unconvinced about Britain, still rose on their feet, intuitively, out of respect for the man who dedicated his life to creating a self-sufficient economy for the future Jewish state.

It is that kind of leader that Yasser Arafat never became, and which the Palestinian economy so glaringly begs.

Über Amotz Asa-El

Amotz Asa-El ist leitender Berichterstatter und ehemaliger Chefredakteur der Jerusalem Post, Berichterstatter Mittlerer Osten für Dow Jones Marketwatch, politischer Kommentator bei Israel's TV-Sender Channel 1 und leitender Redakteur des Nachrichtenmagazins Jerusalem Report.

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