Busting the myth of the West Bank “economic boom”

One of the big lies that the peace process industry has been telling for the past few years is of an economic boom in the Israeli-occupied West Bank, brought about by the supposedly competent, technocratic rule of the handpicked, US-backed “prime minister” Salam Fayyad and the Palestinian Authority.

Israeli Prime Minister Benjamin Netanyahu has also promoted this lie, for example during his recent speech to the United States Congress on 24 May, and actually took credit for the mythical boom:

We’ve helped, on our side, we’ve helped the Palestinian economic growth by removing hundreds of barriers and roadblocks to the free flow of goods and people, and the results have been nothing short of remarkable. The Palestinian economy is booming. It’s growing by more than 10 percent a year. And Palestinian cities – they look very different today than what they looked just few – a few years ago. They have shopping malls, movie theaters, restaurants, banks. They even have e-businesses, but you can’t see that when you visit them.

And of course, New York Times columnists Thomas Friedman and Roger Cohen have been enthusiastic and uncritical promoters of the myth.

The lie has gone in hand with the other big mirage, that the PA has made great strides in state building.

Busting the myth of the “boom”

All along, I have consistently challenged the claims of a boom – all the information is there in public if you look for it – and I link below to some of my key posts in the past year debunking peace process industry propaganda.

Yet I was never able to make a dent in the happy story churned through the media and Washington “think tanks” of an economic miracle under Israel’s brutal occupation.

This lie served the United States which attempted for years to use the promise or mirage of “economic growth” to try to legitimize its support for the Abbas PA; it served Israel, which uses the cover of “economic growth” to deepen its colonization and oppression; and it served the Palestinians Authority and its elites who not only benefitted economically, but presented illusory economic achievements as a substitute for their unfulfilled promises of “statehood.”

The reality was that most economic growth in the West Bank and Gaza Strip has been the result of two factors: first, they were starting from a very low base, the economy having been decimated over the past decade, and second, virtually all the “growth” was a result of foreign donor aid, which has sadly fostered dependency, and helped Israel economically, while acting in effect as as subsidy for the Israeli occupation.

Now, a new report from UNRWA (“Labour Market Briefing, West Bank, Second Half 2010”), the UN agency for Palestine refugees, blows even more holes in the mythical “boom.” The report indicates that:

Contrary to media reports of a flourishing West Bank economy, evidence from the second half of 2010 shows deteriorating labour market conditions, with falling employment growth, accelerating unemployment and lower real wages. These trends disproportionately affected refugees.

Moreoever the only sector in which jobs grew was the public sector – which probably means more hiring of salaried employees into the Palestinian Authority bureaucracy, and its US-backed “security forces.” None of that constitutes productive or sustainable economic development.

Meanwhile, the much-touted “private sector” run by Palestinian oligarchs and billionaires actually lost jobs.

Ignoring facts, promoting myths

Here is some of my reporting that consistently and accurately busted the “economic boom” myth:

Who is doing well?

While ordinary Palestinians languish, some Palestinians, the very richest and best connected have been doing well, extracting private profits under the rubric of “state-building”:

Fake Expertise and Serious Person Syndrome

The lies about the economic boom are not benign: they have real victims. Under the cloak of this fairy tale Israel is deepening its colonization as Palestinians struggle to survive. Those who continue to promote the myth of economic growth and development under occupation are providing cover for these crimes.

The fact that so many of those who have promoted this propaganda continue to be regarded as “experts” whose opinions are sought time and time again no matter how repeatedly and demonstrably wrong they are, is a perfect example of what Paul Krugman calls “Serious Person Syndrome.”

See also: an excellent critical analysis of the myth of economic growth in the West Bank: “Post-Oslo State-Building Strategies and their Limitations” by Mushtaq H. Khan.