North Africa, West Asia

From national liberation to neoliberalism: “peace” and aid in Palestine

The occupied territories are trapped in global structures of neoliberal capitalist exploitation, within which the PA and, indeed, Israel itself, increasingly resemble auxiliary nodes.

Duncan Thomas
12 February 2015

Protests against Abbas in Brussels. Photo supplied by authorTo anyone familiar with the intricacies of the Palestine-Israel conflict, accusations of corruption and authoritarianism against President Abbas and the Palestinian Authority (PA) leadership are hardly novel. Over recent months, the administration has begun to face escalated criticism. At the end of January, for example, my organisation, the Council for MENA Affairs (ForMENA), received a letter denouncing Abbas’ leadership in the strongest possible terms.

Written by representatives of three hundred and fifty public-sector employees whose salaries have recently been withheld – allegedly for disagreeing with Abbas’ policies – the letter was sent to figures prominent in the Arab League and European Union member states. Its key charges read as follows:

“The Palestinian Authority – supposedly committed to the liberation and defence of our people – has joined the ranks of Palestine’s oppressors. The PA now violates, rather than ensures, the rights of Palestinians; it systematically destroys, rather than builds, the institutions of a future Palestinian state; it appropriates funds for its own political purposes, rather than using them to create a democratic, professional and accountable government.

“The PA is not currently fit to represent the Palestinian people, who have no confidence that, under this administration, their struggles and sacrifices will lead to an independent and free state.”

This message, which went on to level charges of human rights violations and systematic repression against the PA, echoed an outburst of criticism from high-profile figures within Abbas’ own Fatah faction, who similarly accused the President of playing politics with public money. Such internal dissent has since increased with another open letter in which Fatah parliamentarians denounce the withholding of salaries as a “clear violation of law” and frame their opposition to the cuts as a “national duty”. The letter continues:

“The outcome - and perhaps the aim - of the act can only be the starvation of the thousands of people who depend on the salaries, the withholding of which comes on top of a suffocating siege, severe lack of employment opportunities, and previous blocking of Gaza employees’ salaries dating back to 2007.

…instead of addressing all the outstanding issues in the Gaza Strip, the Palestinian Authority has added a painful and harsh decision without taking legal requirements into account.”

With a dependency ratio of over five to one within the West Bank and Gaza strip, the authors’ fear that the mass withholding of salaries risks pushing the occupied territories over the brink of a long-simmering humanitarian crisis seems credible.

The PA is almost entirely dependent on foreign aid money, having directly received around $15billion from external donors over the last two decades. The authors of both letters appeal to these outside agents to pressurise the PA and apply stricter regulatory oversight to their use of aid money – ostensibly intended to improve the Palestinian economy and build democratic institutions within the post-Oslo “peace process”.  

While doubtless important and potentially productive, such measures are unlikely to fundamentally alter the situation. The corrupt and authoritarian nature of the PA is structural and systemic. More specifically, it is a logical – and perhaps intended - outcome of both the PA’s role within the post-Oslo landscape and the wider objectives which donor countries hope to achieve through aid money itself. This context must be better understood if the PA is ever to be transformed into a vehicle for Palestinians’ emancipation, rather than an instrument of their oppression.

The PA’s role under the Oslo Accords

The Palestinian Authority is the child of the Oslo Accords - an agreement signed by representatives of the Palestine Liberation Organisation (PLO) and Israeli government in 1993. Brokered by the United States, the Accords were heralded as a major political breakthrough and first step towards a lasting “two-state solution”, to which all signatories ostensibly committed.

However, all of the fundamental issues on which such a solution would necessarily depend – the right of return for Palestinian refugees, borders, extent of sovereignty, Israeli settlements, control over water and other resources - were left unaddressed, postponed to an unspecified time in future negotiations. The progress of these negotiations, meanwhile, was made contingent upon the cessation of the Palestinian armed struggle and their renunciation of claims to the whole of historic Palestine.

From the outset, while Palestinians were required to make major concessions – in effect, to weaken their bargaining position – before any further negotiations could take place, equivalent yet thus-far undefined concessions from Israel would only be made after the conclusion of such talks. In the meantime, Israel was free to further entrench “facts on the ground” which, in the two decades since the signing of Oslo, have made a viable “two-state solution” all but impossible.

In effect, the Accords functioned to legitimise Israel’s further colonisation of territory and resources, while simultaneously de-legitimising any Palestinian resistance to their accelerating dispossession outside an ineffective and increasingly farcical arena of ‘negotiation’ and ‘dialogue’. Writing in the immediate aftermath of the agreement, the eminent Palestinian activist and scholar Edward Said recognised the Olso Accords for what they truly were: “an instrument of Palestinian surrender, a Palestinian Versailles”.

The core function of the PA has always been to enforce this surrender. The PA’s real role within the post-Oslo architecture is two-fold: first, to police and administer (within strictly defined limits) the occupied territories on Israel’s behalf and thereby distract from the ongoing reality of that occupation; secondly, to maintain the public fiction of the “peace process”, the primary purpose of which is to apply a liberal veneer to Israeli settler-colonialism and contain Palestinian political agency within a system of infinite postponement and false hope.

In short, the PA’s growing authoritarian and anti-democratic tendencies are not so much a betrayal of its international mandate as a fulfilment of its raison d'être. It can come as little surprise that an increasingly disproportionate amount of the aid money it receives is channelled towards the security apparatus at the expense of public investment and civil institutions: 44% of the nearly 150,000 PA civil servants are employed in this bloated sector, which consumes 26% ($1billion) of the PA’s annual budget – compared to just 16% on education, 9% on health and a shockingly low 1% on agriculture, despite this being crucial to Palestine’s economy.

Neither should we be surprised that, in addition to regularly suppressing protests against its own incompetence and corruption, the PA reacts violently to public shows of opposition to Israel. During “Operation Protective Edge”, the euphemistically named 50-day massacre of Gaza last year, the PA systematically and brutally crushed demonstrations of solidarity in the West Bank. This repression was part of a long-standing official policy of security co-ordination between the PA and Israel, which Abbas has publicly described as “sacred” and which, indeed, is required for the flow of aid to continue.

While the “peace process” brings nothing but further colonisation and the PA develops increasingly cosy relations with the Israel’s politico-military regime, it rules over its own people with an iron fist. Its Oslo-imposed security remit has been logically extended to cover not only rival militant factions, but all areas of civil society and non-violent dissent. And many Palestinians have come to see the administration as complicit in their dispossession. As one of the many demonstrators recently attacked by PA security forces succinctly put it: “now we have two occupations — the Palestinian Authority government and the Israeli government”.

The minimal degree of genuine independent control the PA exercises over the increasingly dismembered and apartheid-like Bantustans of the colony officially known as the “West Bank”, alongside its pretensions to regain dominance from the equally reactionary Hamas over the open-air prison of the Gaza Strip, no longer disguise its real purpose: to govern the occupied territories as an outsourced Israeli security force, in order to exonerate Tel Aviv of its legal and ethical responsibilities while maintaining the reality of its control.

Israel’s bailiff and the aid industry

There are undoubtedly many good people working in organisations connected with aid to Palestine – whether in international bodies, foreign governments, Palestinian NGOs or, indeed, the PA itself. Nor can it be denied that many of the individual projects funded by aid have had positive impacts, or that aid money has kept many thousands of Palestinians from utter destitution – although often only just.

However, a growing body of academic literature – notably works by Oxford University’s Anne Le More, the School of Oriental and African Studies’ Sahar Taghdisi-Rad and Harvard University’s Sarah Roy – has come to question the role and purpose of aid to Palestine. They argue that the most salient effect of aid money has been to entrench and in fact create an elite, grand-bourgeois and “rentier” governing class, drawn from the high-ranking political and capitalist strata of the wealthy pre-Oslo Palestinian diaspora.

This class, utterly dependent on aid money but totally autonomous economically from the impoverished population over which it rules, forms the core of Palestine’s unique articulation of the classic authoritarian post-colonial state. Exercising strictly defined sovereignty over the occupied territories and beholden to the interests of foreign capital, in world-systemic terms the PA can thus be understood as the “international community’s” answer to an otherwise unsolvable riddle: how to transition historic Palestine from a colonial to a neo/post-colonial condition, without allowing the emergence of the counterbalancing and emancipatory mass popular struggle which this transformation has traditionally required elsewhere – even if only for such movements’ subsequent national-bourgeois appropriation.

In recent years, this trajectory has taken a more concrete form through the brutal imposition of neoliberal economic dogma. Most extensively analysed by the School of Oriental and African Studies’ Adam Hanieh, this resembles what the University of St Andrew’s Raymond Hinnebusch termed “authoritarian upgrading” in Bashar al Assad’s Syria: namely, the rejuvenation of autocratic regimes through programmes of economic liberalisation/privatisation which incorporate new (specifically grand-bourgeois) class elements into the ruling hegemonic block – along, of course, with their capital and international credibility and connections. The fact that in Palestine’s case, this “upgrading” has been achieved through the proxy of the PA is, in analytical terms, important only insofar as it conceals the underlying similarity of the processes.

The most explicit symbol of neoliberal restructuring in the occupied territories is the PA’s 2007 Palestinian Reform and Development Plan (PDRP). As detailed by Hanieh, this IMF-sponsored programme imposed huge budgetary cuts on the PA, against which Abbas’ recent withholding of wages pales in comparison: a 21% reduction of public-sector employment, resulting in 40,000 people losing their jobs between 2007 and 2010. These people form part of a massive reserve army of labour, which the PDRP creates and then disciplines to accept lower wages, poorer working conditions and a loss of basic rights.

As elsewhere in the region, the most explicit manifestation of this neoliberal regime is in so-called “Qualifying Industrial Zones” (QIZs), where neither Palestinian nor Israeli labour laws apply, unions are banned from operating and corporations are entirely exempt from taxation. The establishment of QIZs in the West Bank was an essential part of the PDRP, with aid money made contingent upon their realisation and profitability.

In addition to a general exploitation of domestic labour by international capital, QIZs also further entrench Israeli control of the occupied territories. The most startling illustration of this is the Jenin Industrial Estate (JIE). In Hanieh’s words: “the land for the JIE has twice been confiscated from Palestinian farmers: in 1998 when the PA first mooted the idea for the industrial zone, and then once again in 2003, when the Israeli military confiscated the land…for the Apartheid Wall ‘buffer zone’. Indeed, in a striking example of how this model of development is integrated with the structures of the occupation, the Wall forms the northern border of the JIE”.

Under initiatives like the PDRP, aid is now explicitly tied to such strategies of domination, with Palestinians providing a labour force to be exploited by national, regional (especially Gulf), Israeli, and western capital. The degree to which this aid-driven neoliberalisation of Palestine deepens collusion between the PA and Israeli authorities is again illustrated by the QIZs: policed on-site by the PA, workers in QIZs must pass through Israeli-controlled check-points, while the commodities they produce are exported through Israeli-controlled borders and their right to employment is contingent upon their paying increasingly extortionate water and electricity bills to Israeli-controlled corporations. If they fail to cough up, the PA is contractually obliged by the PDRP to act as Israel’s bailiff.

Meanwhile, the fiscal constraints imposed upon the PA by neoliberal aid doctrine have stripped away much of its civil-democratic decoration to leave only the coercive-authoritarian core of the security apparatus, employed to police the occupied territories for Israel’s safety and suppress the labour force for global capitalist profits. The QIZs more broadly form part of a region-wide programme of corporate welfare and economic integration, anchored by US and Israeli capital and providing these actors with a range of diplomatic and corporate levers vis-à-vis any recalcitrant Arab governments. In return for their enthusiastic efforts to destroy any independent Palestinian social, economic and political life or basis for a future democratic state, the PA elites and their corporate partners are amply rewarded by the cash cow of foreign financial donations.

Changing course

Within this entanglement of local, regional and global power, it is not easy to see any clear forward path. However, with international public opinion now more favourable to Palestinians and several European countries finally responding to this dynamic by recognising Palestine, along with growing understanding of neoliberalism itself as a project of elite class power, there may be an opportunity for a change of course, and Abbas’ forthcoming visit to Brussels provides a chance to increase pressure on many important parties.

While the entire aid industry requires fundamental re-structuring, the most urgent need is to shift the balance of aid spending away from firefighting and the PA security apparatus towards long-term investment in civil society, democratic institutions and genuine economic improvements. Needless to say, as long as the majority of aid is used to foot the bill for Israel’s routine destruction of Palestinian infrastructure and suppressing any opposition to such violence, this cannot happen.

As a necessary accompaniment, aid must cease to flow so disproportionately through the central hierarchical structures of the PA – a distributional model tailor-made for the maintenance of a corrupt, neo-patrimonial regime. The current monopolisation of decision-making by political and business elites and de-politicised NGOs must give way to a decentralised, grass-roots model of distribution and investment-involving academics, representatives of civil society, activists and local community-based organisations dedicated to empowering Palestinians and furthering their struggle for statehood and self-determination, rather than simply keeping them marginally above destitution and impoverishment. Alternative approaches to aid and development do exist to effect this transformation, notably Mary Anderson’s “Do no Harm” framework.

This is a tall order, no doubt, requiring as it does the reversal of decade-long policies and the abandonment of the world’s dominant economic paradigm. Half-hearted or disingenuous regulatory tweaking won’t do, however. At the bare minimum, international supporters of Palestinian rights need to recognise that the liberation of the occupied territories is no longer limited to a necessary yet somewhat simplistic opposition to direct Israeli military aggression and control, but is bound up in global structures of neoliberal capitalist exploitation, within which the PA and, indeed, Israel itself, increasingly resemble auxiliary nodes.


The views in this article are the author’s own and do not necessarily represent the position of ForMENA.

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