Palestine LTD: Neoliberalism and Nationalism in the Occupied Territory

"This book by Toufic Haddad focuses on the political economy of Palestine. It gives a short historical overview but pours its efforts into detailing how the Palestinian Authority was constructed and how it deals with the question of political economy. He begins by highlighting the neoliberal philosophy that molded the PA from the very first day (p.17), and how it accepted the notion that capitalism is a part of freedom, and treated neoliberalism and state building as synonyms. Therefore, engineering a society conforming to neoliberal imperatives would occupy a prominent position in the PA, which would require shifts in Palestinian behavior even on the individual level. (pp.19-20). 

 

This neoliberal model permeated donor agendas, where aid was theoretically to be used as a tool for peacebuilding by stimulating the economy, eventually producing peace dividends, (p.24)  however it worked as a method to eliminate any and all alternative options for Palestinians (p.28). The declaration of principles completely separated the economic issues from political ones, with the full blessing of the PLO. Legal international frameworks were abandoned in favor of negotiations. (P.60) The book then details how the Palestinian economy could not “look inward” due to Israeli market domination, so the solution was the complete opposite, to open it up. (p.65). Using these strategies, the World Bank and IFIs intended to influence policy and keep the PA under control (p.71). From the beginning the economic policy was completely under the control of the World Bank, the Palestinians could not even build their own roads (p.84). The newly formed PA constituted a tabula rasa, a completely new entity and experiment that could be shaped from the ground up to pursue neoliberal policies (p.87). Paris protocol made it so that there was effective containment of the Palestinian economy as well as its integration with the Israeli one to sustain its vulnerability full time (p.102). 

 

Failure to achieve a certain level of economic development by 2000 due to occupation and domination lead to a focus on preventing the PA’s collapse, rather than focus on peace dividends (p.93). To do this, a huge expansion of public job sector was mandated by the donors even though this went against their neoliberal dictums (p.112). All of these economic policies were working around the occupation, rather than trying to end it. The PA was purposefully maintained weak enough so that it can take care of security and its burdens, but not strong enough to lead a national liberation movement (pp. 146-147). Following the split between Hamas and Fateh, and the appointment of Salam Fayyad, the PA sought to reduce expenditures and dependence on foreign aid. This was accompanied by the promotion of private sector investment. This cemented the complete separation of politics from economy per the donors request and an unraveling of Arafat’s neopatrimonial model, which was encouraged by the donors to keep rivals in check. (P. 229). "