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Overview
While most Palestinians living under Israeli occupation are struggling to survive, a powerful group of Palestinian capitalists is thriving and growing in political, economic and social influence. he cost, all too often, is their engagement in economic normali!ation pro"ects. In other words, they deal with the Israelis as though they were a #normal$ %usiness partner rather than an occupying power that has ruthlessly violated Palestinian rights for over &' years. In this policy %rief, (l)*ha%a+a Policy ,em%er ari- .ana sheds light on the ways in which these Palestinian capitalists e/ercise political influence and social control and gives e/amples of the economic normali!ation pro"ects in which they have engaged.
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www.al-shabaka.org #;eturnee$ capitalists, comprised of a Palestinian %ourgeoisie that had emerged in the (ra% countries, particularly the <ulf states, as well as in =orth (merica and >urope. ,any of these %usinessmen had strong ties to the nascent Palestinian (uthority. 0ocal capitalists, comprised of two main su%groups: large landowners who historically en"oyed considera%le political and social influence over traditional social structures? and local interlocutors who accumulated wealth as su%contractors for Israeli companies after the 17&@ occupation. he nouveau riche, who ac-uired wealth in more recent times and who particularly %enefited from the 1slo process in various ways as will %e discussed further down.
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www.al-shabaka.org involved over 2' +ey imported commodities, including flour, sugar, oil, fro!en meats, cigarettes, live animals, cement, aggregate, steel, wood, to%acco, and petroleum. hese monopolies were not only an early sign of P( corruption %ut also the most o%vious e/pression of the emergent political)economic alliance that found in the P( an effective political mechanism for achieving private economic interests. 5urthermore, monopolies were also selectively granted to those Palestinian political)economic actors that en"oyed special pro/imity to Israeli companies. (s a conse-uence, monopolies have had a devastating impact on the Palestinian economy and small) %usinesses, and, conversely, %enefited the Israeli economy. ( num%er of former Israeli political and military officials %ecame, after their retirement, %usiness partners of some Palestinian capitalists and P( political elites. In return, Israel offered the Palestinian %usinessmen and politicians special privileges such as access to permits, more freedom of movement and trade and the DIP pass status. With the appointment of the former Prime ,inister *alam 5ayyad and the government programs he introduced since 2008, the capitalists4 influence over the political esta%lishment increased. 6usinessmen and pro)capitalist technocrats often occupied +ey ministerial positions in 5ayyad4s governments. he #reform$ of the %an+ing sector that too+ place under 5ayyad4s governance is an important aspect of rising capitalist political influence. hese reforms made it possi%le for the government to contract long) term loans that amounted to some E4.2 %illion in 2019 according to a recent estimate: hat is as much as '0F of the <.P, with annual interest running at E200 million. 5or an economy largely dependent on international aid this high level of pu%lic)sector inde%tedness is alarming indeed. he ways in which the money was spent and how the P( will pay off its de%ts remains a mystery. 5urthermore, the high level of pu%lic de%t ena%les capitalists to pressure the P( to ad"ust its policies in conformity with the interests of large private firms %y threatening to withdraw some investments or to hold %ac+ others, as (laa artir noted in a recent study. =eedless to say, the people pay the cost, e.g. when the P( raised income ta/ and cut e/penditure in early 2012. hese Palestinian capitalists4 role has even %ecome prominent in the international political sphere. hey put their weight %ehind A* *ecretary of *tate John Cerry4s efforts to drive through a peace settlement with their "oint Palestinian)Israeli 6rea+ing the Impasse plan despite the dire impact this would have on Palestinian rights. ,oreover, the plan was reportedly prepared without the participation of either Palestinian civil society or the P( itself. his suggests that local Palestinian crony capitalists have %ecome the primary recipient of international #peace$ initiatives. It is difficult to %elieve that any peace plan they manage would contri%ute to the Palestinian -uestion for self)determination, freedom, and "ustice. ;ather, it is more li+ely to %e "ust another lucrative opportunity for those %enefiting from the ongoing status -uo.
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www.al-shabaka.org see+ing to resist it using different means.2 *ocial control practices in Palestine have a particularly destructive impact %ecause they tie into the set of colonial controls engineered %y the occupation. Grony capitalists have attempted to practice social control %y recruiting civil society to serve their o%"ectives, wor+ing alongside ma"or international donors. 1ne way is through the esta%lishment of large =<1s that tend to penetrate the social fa%ric %y promoting certain values designed %y international financial institutions and development agencies to sustain the neoli%eral system. hese =<1s4 values are e/pected to tric+le down to other indigenous civil society organi!ations via capacity %uilding and other pro"ects. (nother aspect of social control is the facilitation of private lending, which encouraged a culture of consumption and pushed many people into the de%t trap. (ccording to the Palestine ,onetary 5und, individual loans shot up to a%out a %illion A.*. dollars in 2019 from a%out E474 million in 2007. It is estimated that @'F of pu%lic sector employees 274,000 out of 1'9,0003 are in de%t. he personal de%t is primarily used to finance consumption 2including mortgages, cars, marriage costs, and electric goods3 and is rarely invested in productive activities. his state of personal inde%tedness has ma"or social ramifications %ecause it promotes a sense of individualism and drives personal private concerns, systemically pushing people to a%andon crucial national issues. It fosters political apathy and undermines critical thin+ing and action against the very oppressive nature of the system. Het another method of social control is the e/ploitation of wor+ers that occurs in factories owned %y some local capitalists, where wor+ers are paid much less than the government4s recently announced minimum wage of 1,4'0 =I* 2E9@@3 for the private sector. #(lthough wor+ers protested the P( declared minimum wage %ecause it does not guarantee the minimum standards of living, many of us are still wor+ing under humiliating conditions, where our salaries are even less than 1000 =I*. 6ut despite that, we have to accept this, otherwise we will %e thrown into the streets$ 2author4s interview.3 his e/ploitation and control of Palestinian la%or force is e/acer%ated %y the lac+ of effective la%or unions, which have %een dramatically wea+ened %y %oth the P( and capitalists ali+e. here are fears that the system of wor+ers4 e/ploitation and control will %e e/panded and institutionali!ed through industrial !ones that are intended to integrate Palestinian)Israeli)regional capital to e/ploit the pool of Palestinian cheap la%or. (ccording to (dam Banieh, the industrial !ones will not apply Palestinian or Israeli la%or laws, wage levels and other wor+place conditions, while the right to unioni!e will %e prohi%ited.
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www.al-shabaka.org divestment and sanctions 26.*3 movement for a definition of normali!ation.39 <roups wor+ing for Palestinian human rights and self)determination have openly denounced some of the Palestinian crony capitalists. he capitalists counter %y claiming that they are simply see+ing to serve the Palestinian economy and people4s steadfastness. In fact, Palestinian)Israeli "oint pro"ects represent the ugliest face of normali!ation %ecause of their scale and si!e and, most importantly, %ecause they help the occupying power to profit and to further infiltrate its structures into the occupied territory. ( few e/amples of large normali!ation pro"ects are listed %elow.4 )awabi his planned city is one of the largest private investments in the West 6an+ and one of the most controversial large)scale pro"ects. Whether it is %y accepting and planting some 9,000 trees donated in 2007 %y the Jewish =ational 5und 2which were later uprooted due to criticism3 or %y contracting over 10 Israeli companies as suppliers, ;awa%i e/emplifies the way in which profits for private corporations and economic normali!ation are propagated under the %anner of a #national pro"ect.$ The In!ustrial *ones he industrial !ones in the occupied territory are driven %y the same logic of the Iualifying Industrial Jone 2IIJ3 in Jordan and >gypt. hey give life to *himon Peres4 am%ition of a #=ew ,iddle >ast$ where Israel is seen as the hegemonic economic center of the region. Industrial !ones are also highly pro%lematic %ecause they integrate Palestinian)Israeli)regional capital into a remorseless machine to e/ploit cheap la%or K Palestinian as well as foreign imported la%or. >ven as they %enefit a few local %usiness elites, they advance the Israeli matri/ of control and perpetuate its occupation. Palestinian invest$ents in Israel an! the settle$ents (ccording to one study, Palestinian capital is %eing invested in Israel and its illegal settlements at far higher rates than in the West 6an+ ) %etween E2.' %illion and E'.8 %illion versus only E1.' %illion. he Palestinian ,inistry of >conomy has accused the study of lac+ing accuracy and o%"ectivity while some economists have said it suffers from serious methodological pro%lems. Het its main message remains noteworthy. ( staff mem%er at the ,inistry of the >conomy said: #,any Palestinian %usinessmen are investing in industrial settlements such as 6ar+an, ,aLale (dumim and other agro)industrial par+s in the Jordan Dalley.$ 2author4s interview.3 (nother investigative study found that many Palestinian companies are involved in products laundering in the Jordan Dalley. hey fraudulently %rand settlers4 agricultural products as #products of Palestine$ and then e/port these to international mar+ets thus evading the %oycott campaigns in some >uropean countries. Contractin Israeli Security Co$panies
3
( +ey paragraph is: # he participation in any pro"ect, initiative or activity, in Palestine or internationally, that aims 2implicitly or e/plicitly3 to %ring together Palestinians 2andMor (ra%s3 and Israelis 2people or institutions3 without placing as its goal resistance to and e/posure of the Israeli occupation and all forms of discrimination and oppression against the Palestinian people.$ 4 5or further reading see, for e/ample, Chalil =a+hleh, Globalized Palestine: The National Sell-Out of a Homeland, he ;ed *ea Press, Inc.? 1st ed., 2011.
5 The Palestinian Capitalists That Have Gone Too Far
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www.al-shabaka.org ( recent report reveals that some Palestinian companies 2;amallah ,Nvenpic+ hotel, the 6an+ of Jordan, Jordan (hli 6an+, Gairo (mman 6an+, Pal)*afe3 are listed as clients of =etacs 0td. his Israeli security company is owned %y reserve ,a"or)<eneral .anny ;othschild, who commanded Israeli occupation forces in the West 6an+ and *outhern 0e%anon and wor+ed in military intelligence. Palestinian-Israeli Partnership in Tech +entures *everal Palestinian entrepreneurs are colla%orating and partnering with Israeli high)tech corporations. he case of the ;amallah)%ased *(.(;( venture is "ust one e/ample. It was cofounded %y *aed =ashef and Hadin Caufmann and is managed %y a team of Israeli and Palestinian e/perts in technological innovation and Internet services. 5or%es maga!ine ran a lengthy report highlighting the role of the Israeli Gisco *ystems in %ringing together high)tech Israeli e/perts and Palestinian entrepreneurs to help transform the Palestinian economy along the lines of Israel4s successful #*tartup =ation.$ he report also reveals that several Palestinian youth in the field of high)tech are %eing invited to meet and wor+ with their Israeli counterparts in the %ac+ room, which is # "ust one of do!ens of %usiness)driven dialogues -uietly ) in many cases secretly ) proliferating across the Boly 0and.$
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www.al-shabaka.org wealth, and a %ureaucracy that serves a democratic people)driven political, economic, social and development agenda. he change that is needed re-uires a ma"or restructuring of the overall political framewor+. ,ore than anything else, the Palestinians need a leadership that is dedicated to resisting the occupation and wor+ing for Palestinian self)determination, li%eration, "ustice and e-uality.
ari- .ana is assistant professor of political science at Be%ron Aniversity. Be received his Ph... from the *cuola *uperiore *ant4(nna, Italy, where his focus was on the transformation of Palestinian civil society from mass)%ased movements to neoli%eral)oriented =<1s. .uring this period, he was Ph. visiting fellow at *chool of 1riental and (frican *tudies 2*1(*3. Be has wor+ed with many Palestinian and international =<1s and A= agencies in the occupied Palestinian territory, (frica and >urope. Bis research interests include civil society, =<1s and social movements, neoli%eralism, and glo%ali!ation and state)%uilding with a particular focus on Palestine.
(l)*ha%a+a, he Palestinian Policy =etwor+ is an independent, non)partisan, and non)profit organi!ation whose mission is to educate and foster pu%lic de%ate on Palestinian human rights and self)determination within the framewor+ of international law. (l)*ha%a+a policy %riefs may %e reproduced with due attri%ution to (l)*ha%a+a, he Palestinian Policy =etwor+. 5or more information visit www.al)sha%a+a.org or contact us %y email: contactOal)sha%a+a.org.