BBC presents news of sale of bonds by private, for-profit Palestinian firm along with picture of PA “prime minister” Salam Fayyad
If a Palestinian “state” ever comes into existence, what kind of “state” will it be? Here’s a clue: it will be a state, governed by, of and for rich and powerful businessmen. “First ever Palestinian bonds sold” - so reported the BBC on 10 May:
An investment firm has sold the first ever bonds from a Palestinian borrower.
The transaction raised $70m for the Palestinian Development and Investment Co, with the money coming from Palestinian and Jordanian banks.
The proceeds will be used towards building a new power plant as well as a tourism centre on the West Bank.
The move comes amid tentative steps towards a planned declaration of an independent Palestinian state later this year.
What’s noticeable about this report? An average reader might think that the bonds had been issued by the Palestinian Authority (PA), or by an entity controlled by it. The BBC goes on:
The Palestinian Authority (PA) has been encouraging private companies to issue bonds, and plans to sell some itself, according to Prime Minister Salam Fayyad.
“The Palestinian Authority is determined to build the foundations of an independent state,” said Mr Fayyad.
The PA has previously indicated it would declare statehood this summer and has lined up many governments ready to recognise it as such.
The BBC report lazily conflates the issuance of bonds with the supposed march towards Palestinian statehood, and Salam Fayyad, the Western-backed unelected prime minister who is the darling of the “international community” is the centerpiece of the report (which is illustrated with a picture of him). So the BBC implicitly gives credit to Fayyad and his much vaunted but almost completely hollow “state-building” and “institution-building” initiative.
What you don’t get is any information about the real protagonist here which is the Palestinian Development and Investment Co. (PADICO). PADICO is in fact a completely private, for-profit company. It is not accountable to anyone except its wealthy investors who can do as they please. And apparently the investors are doing well, with PADICO declaring profits of $38 million in 2010.
But take an even closer look. The chairman of PADICO is well-known Nablus billionaire Munib Masri whose name was recently in the news as a possible candidate for the role of “prime minister” in the “national unity goverment” that Fatah and Hamas seek to form.
As of today it seems like all the pressure from the PA’s American and European donors is for Fayyad to retain the role of PA prime minister. But suppose Masri or someone else similarly situated becomes prime minister of the PA or a declared Palestinian “state” some day, what then? You would have a prime minister who is also chairman and owner of a private company that controls and profits from massive resources and projects in the West Bank, including tourism, housing, transport and services and whose projects and plans are presented as being in the public interest and part of “state building.” In other words, a complete convergence between the public and private in major decisions over land use, resource allocation, employment policy and so on.
A prime example of how great is the potential for conflict of interest can be seen in the fact that one of the subsidiary companies of PADICO is the Palestine Securities Exchange (PSE). In June 2010, PADICO issued a statement praising the PA “Minister of National Economy” Dr. Hasan Abu Libdeh for approving the conversion of the PSE into a publicly-traded company – something that would be expected to enrich its private owners even further. Now, who is the former chairman of PSE? None other than Dr. Hasan Abu Libdeh, as PADICO’s 2005 annual report states. Normally one would expect that the chairman of a company is also a shareholder. Was Abu Libdeh still a shareholder when he made the decision to convert it into a publicly-traded company as minister? Did he take other official decisions that would secure PSE’s position over any possible competitors? Who knows? Certainly not the Palestinian public.
Many people argue that investment and development are necessary to build the Palestinian “state.” But the crucial point is that PADICO is not a publicly-controlled, accountable corporation, or a non-profit development bank. It is a private, for-profit company. Look at the members of its board – all men, and fairly advanced in years – hardly a cross-section of Palestinian society. Yet their interests and their decisions are what shape the little scope Palestinians have for deciding their own fate.
True, PADICO’s Mission and Vision statement declares that among its goals is: “To play a central and leading role in building and developing the Palestinian economy – a young, promising, and challenging economy” and “To cooperate and coordinate efforts with government, on government and financial institutions, as needed.” But also, “To be an international investment company that maximizes shareholder value.”
My concern is emphatically not about Munib Masri or anyone else associated with PADICO as individuals – and I am not casting any aspersion about Masri’s character or acts as a person. Nor do we know if Masri himself has any interest in becoming “prime minster” of the PA.
Rather, my questions are about a developing system where the richest businessman could also become the PA prime minister and there is no clear line between private interests and public duties, and no mechanism of accountability other than “corporate accountability” to shareholders (According to PADICO’s 2008 annual report, the company had just over 11,000 shareholders of whom 25 percent were “international,” 30 percent were in Palestine, and 45 percent in Jordan). It’s just not enough for firms like PADICO to declare that their mission is to “build the Palestinian economy” if they are not accountable to citizens. Yet, such privatization of the public sphere is visible everywhere in the Palestinian Authority.
Another prime example is the Rawabi project – run by Bashar Masri – a Palestinian-American businessman who actively seeks to normalize economic ties with Israel in defiance of Palestinian civil society’s call for boycott, divestment and sanctions.
Rawabi – a suburban housing development being marketed as “Palestine’s first planned city” – has been heavily promoted by the Palestinian Authority, and by peace process industry operatives like Quartet Envoy Tony Blair as being a necessary building block for the “future Palestinian state.” The Palestine Papers, published by Al Jazeera in January, even indicate that US Middle East Envoy George Mitchell lobbied Israel on behalf of Rawabi. Rawabi, however, is also a private, for-profit endeavor whose main shareholders are Bashar Masri’s private investment firm Massar, and the Qatari real estate giant Qatari Diar.
In addition to concerns about possible boycott violations and normalization with Israel, the Rawabi model raises deeper questions for all Palestinians. Even if [Bashar] Masri has the best of intentions, Rawabi represents an entirely top-down, profit-driven approach to the development of Palestine where the “vision” created by financiers, marketers, international investors and “peace process” officials is substituted for the aspirations of the broader community.
Thus the issuance of $70 million in bonds by PADICO, a private, for-profit firm, is not something for anyone except the shareholders of PADICO to celebrate, nor does it mark a milestone toward the liberation and enfranchisement of the Palestinian people. It is simply another depressing sign that any Palestinian “state” that emerges from the Palestinian Authority would be controlled and dominated by the wealthiest few, who have the power to shape decisions that affect the lives of millions. It is a demonstration that small elites are invested in the idea of a Palestinian “state” no matter how small its area and no matter what violence it does to the fundamental rights of the majority of Palestinians.
It is important that Palestinians begin to work on a vision of liberation in which people and communities, not donors, “investors” and financiers shape the most fundamental decisions about their lives. Palestinians should not be given a say in key decisions about how their society is shaped just because they are rich. That struggle for real autonomy is one that unites Palestinians with billions of others living under the ravages of neoliberalism and privatization all over the world.