‘Fayyadism’ revealed: UN report throws cold water on the economic mirage in the West Bank

on 36 Comments

In recent years it has become popular among liberal commentators in the US to celebrate Salam Fayyad and his plan for Palestine. Despite evidence of widespread human rights abuses under his watch, or more accurately at his and US Lieutenant General Keith Dayton’s command, Fayyad’s state building plan has been lauded, mainly because it prioritizes building the Palestinian economy over securing Palestinian rights. In the words of the New York TimesRoger Cohen “he’s getting things done, improving people’s lives, and Palestinians are tired of going nowhere.”

This perspective has been best summarized by none other than Thomas Friedman, who has dubbed the phenomena “Fayyadism.” Here Friedman describes Fayyadism as only he can:

The Israeli-Palestinian conflict is to the wider Middle East what off-Broadway is to Broadway. It is where all good and bad ideas get tested out first. Well, the Palestinian prime minister, Salam Fayyad, a former I.M.F. economist, is testing out the most exciting new idea in Arab governance ever. I call it “Fayyadism.”

Fayyadism is based on the simple but all-too-rare notion that an Arab leader’s legitimacy should be based not on slogans or rejectionism or personality cults or security services, but on delivering transparent, accountable administration and services.

Fayyad, a former finance minister who became prime minister after Hamas seized power in Gaza in June 2007, is unlike any Arab leader today. He is an ardent Palestinian nationalist, but his whole strategy is to say: the more we build our state with quality institutions — finance, police, social services — the sooner we will secure our right to independence. I see this as a challenge to “Arafatism,” which focused on Palestinian rights first, state institutions later, if ever, and produced neither.

Things are truly getting better in the West Bank, thanks to a combination of Fayyadism, improved Palestinian security and a lifting of checkpoints by Israel. In all of 2008, about 1,200 new companies registered for licenses here. In the first six months of this year, almost 900 have registered. According to the I.M.F., the West Bank economy should grow by 7 percent this year.

The last point is the most common one raised by Fayyad’s supporters. This economic growth is supposed to prove Palestinians worthiness for a state in international eyes, and was even been seized upon by Benjamin Netanyahu in his recent address to Congress as a sign that the occupation is not a hinderance to Palestinian aspirations. After giving Fayyad props for leading the charge, Netanyahu also took credit for the Palestinian’s economic growth  

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.

It all sounds wonderful, but it isn’t true.

I’m not saying that there aren’t restaurants or banks, and it is even possible that the Palestinian economy grew 7% by some measure in the West Bank during the last year, but a new UN report released today reveals the truth behind the sloganeering. The report issued by UNRWA shows that unemployment in the West Bank stands near 24%, and is even higher for refugees, while the “West Bank miracle” is based almost entirely on international aid. From Reuters:

The report by the agency UNRWA shows that unemployment in the second half of 2010 grew much faster than employment, and average purchasing power continued to decline.

Of six major private sector activities, only two recorded employment gains during the second half of last year. Overall, one in four Palestinians in the workforce was unemployed.

“While there was modest employment growth, such growth was on the wane in 2010 while the number of unemployed accelerated in the second half of the year,” said author Salem Ajluni.

The report’s findings challenge assertions that the Palestinian economy is growing, helped by the removal of Israeli roadblocks and other movement restrictions. Prime Minister Benjamin Netanyahu said in a speech to the U.S. Congress last month that the Palestinian economy was booming.

Palestinian policymakers have projected growth of 7 percent in 2011 for both the West Bank and Gaza, though they point out that high growth rates in recent years have largely been dependent on international aid for the Palestinians.

The UNRWA report said: “The average broad refugee unemployment rate rose by more than a percentage point to 27.9 percent relative to first-half 2009 as compared to 24.1 per cent rate for non-refugees.”

A UNRWA spokesman goes on to say, “The occupation and its related infrastructure such as settlements and settler-only roads that encroach on and divide Palestinian land, settler violence and the West Bank barrier have diminished prospects for Palestinians in general and especially for refugees.” 

This really shouldn’t have come as a surprise. Last year around this time Save the Children UK released a report saying that poverty was worse in parts of the West Bank than in Gaza. Still, I imagine it might come as a shock to some on the Times editorial page. Although international aid has made some enclaves in the occupied territories, especially parts of Ramallah, feel as though they’re booming, this money has flowed mostly through the Palestinian Authority patronage system and enriched a few. This story would have been more obvious if reporters had travelled a bit off the beaten path, but I guess that’s a bit too far off Broadway.

36 Responses

  1. Cliff
    June 8, 2011, 4:31 pm

    everyone’s a victim! mutual blah blah!

  2. Citizen
    June 8, 2011, 4:36 pm

    Re: “… the “West Bank miracle” is based almost entirely on international aid.” Heh, meh. Where would Israel be today without 6.5 billion dollars yearly in US foreign aid? (3 bill=direct, borrowed from China, interest charged by Israel; 2 bill-“guaranteed loans” which always turn out to be free grants; 1 bill-US tax exemptions for aid going to illegal Israeli settlements and apartheid institutions; .5 bill in Israel bonds, bought by US state and fedral pensions, by administrators with no input from the pension payors or recipients.

  3. pabelmont
    June 8, 2011, 4:48 pm

    Well, good for the UNRWA. Honesty when the landlord (Israel and USA) probably would have preferred forelock-tugging-dishonesty. But, still, if the phony report which N’yahu lauds serves to justify a pro-Palestine-statehood vote in the UN in September (something N’Yahu presumably doesn’t want), then more power to it. Smoke and mirrors are fine, jez fine, what my wife used to call “felsifay wa mascara” which I understood to mean “Philosophy (Nonsense) and Masks” (teach THAT to the USA newsreaders and tell them its Yiddish!).

  4. MRW
    June 8, 2011, 4:49 pm

    The OECD announced recently that Israel has the most poverty among the developed countries, and it specifically cited the poverty experienced by children.

    All that dough we give it? It goes to the top 50 families.

  5. Keith
    June 8, 2011, 5:37 pm

    “…Salam Fayyad, a former I.M.F. economist….”

    Say no more. We get the picture.

    • Chaos4700
      June 9, 2011, 12:01 am

      Yeah…. I wish I’d known that about him earlier. Ick.

  6. seafoid
    June 8, 2011, 5:42 pm

    The thing about any numbers is the trend. 2009 West Bank GDP was 36 % lower than 2000 GDP.

    9% growth in such a context is meaningless. But AIPAC don’t do insight.

  7. Koshiro
    June 8, 2011, 5:52 pm

    Last year around this time Save the Children UK released a report saying that poverty was worse in parts of the West Bank than in Gaza.

    Yes, and we should not neglect to mention which parts: It’s Area C, the part of the West Bank where Israel has exclusive security and civilian control.
    Important fact to cram down the throats of people who blather about how terrible things are in Gaza: Among the three different ruling authorities in the occupied territories, the worst as far as the living conditions of its Palestinian subjects are concerned is Israel. Yes, worse than Hamas!

    In light of these facts, it’s very hard to justify (and I certainly won’t) denying Palestinians the right to use any means at their disposal to get rid of the Israeli presence.

    • GuiltyFeat
      June 9, 2011, 7:48 am


      “In light of these facts, it’s very hard to justify (and I certainly won’t) denying Palestinians the right to use any means at their disposal to get rid of the Israeli presence.”

      Including the commission of war crimes? Crimes against humanity? Please be specific about which means you think Palestinians are justified in using.

      • Koshiro
        June 9, 2011, 8:41 am

        Lemme put it this way:
        Anything used by resistance movements fighting Axis occupation in WW2 would be fine by me.
        I would rather wish for resistance to be a non-violent mass movement – because I think that is more effective under the current conditions. But I do think that violent resistance against a brutal, illegal occupation is quite justified.

      • Citizen
        June 9, 2011, 9:07 am

        GF, how about the same specific means European Jews used to establish their presence? Just asking.

      • GuiltyFeat
        June 9, 2011, 9:58 am

        “I do think that violent resistance against a brutal, illegal occupation is quite justified.” Wow. Given that both Fatah and Hamas have renounced violence against Israel that rather leaves you out on your own, doesn’t it? What an unusual and untimely attitude you seem to have.

      • Koshiro
        June 9, 2011, 11:43 am

        No, and I think you need to follow others’ writings more closely.
        As I said, I would currently recommend to Palestinians to continue a non-violent course because it is more effective. This is also the current mainstream Palestinian position.
        If however, a still more effective method to end the occupation was found, and that method involved armed resistance, I would recommend that they do that.

  8. eGuard
    June 8, 2011, 6:21 pm

    A post to be starred (4 out of five). Also, when things change: bomb and siege them back to zero, so West Bank economy can grow again 10%/year. Economics is about choosing the right zero.

  9. Kathleen
    June 8, 2011, 7:05 pm

    I have heard Jamie Rubin promoting this idea that the Palestinian economy is really developing at warp speed. Wish I could remember who that was on Chritiane Amanpours “This Week” a while back promoting this idea

  10. Richard Witty
    June 8, 2011, 8:25 pm

    Two truths.

    1. Fayyad has made critical changes in Palestinian institutions that add to internal and external credibility of Palestinian governance.

    2. That Palestine would be MUCH better off if the dividing and exclusive roads were integrated in some way.

    The 7% growth would be 15%.

    Without Fayyad, there would be neither prospects of Palestinian statehood (resulting from international credibility) nor the level of economic growth that does exist.

    Another “no” here. Don’t we have enough “no”‘s from Netanyahu and Arafat?

    • Chaos4700
      June 9, 2011, 12:04 am

      “Integrated in some way?” Why don’t you just come out and say it. Israel’s apartheid settler highways are depriving Palestinians of their livelihood. Why is that so hard for you to say? Why do you have to dance around it and make it sound like those arabrein roads dropped out of the sky or were a preexisting problem. That is Israel.

    • Koshiro
      June 9, 2011, 6:58 am

      You ignore almost all of the economic problems which result from the occupation.
      1. Let us start with Area C, because here things are perfectly clear and simple. No growth or development to speak of can take place in these parts of the West Bank because Israel, which is in full control, actively and maliciously stifles it.
      2. In Areas A and B, the problems are myriad. It’s not just about roads. It’s about a lack of water, land and other resources, which leave the agricultural sector in shambles.
      It’s about a lack of travel permits, which cripple the tourism sector.
      It’s about total Israeli control of imports and exports, which results – to name just one example – in Palestinian pharmaceutical being unable to export their products due to Israeli restrictions.
      It’s about insecurity for investors who cannot be sure that Israel won’t arbitrarily delay or destroy the projects they are investing in.

      Bottom line: True economic development in Palestine – the potential for which is still there – can only began once the Israeli occupation ends, and ends completely. And no, “cooperation” with Israel is not the answer. In fact, the relationship between Israel and the Palestinian territories is entirely parasitic: Israel sucks out the foreign-aid-provided capital by controlling imports and forcing expensive Israeli products on Palestine and restricts capital flow into Palestine by controlling exports, destroying Palestinian competetiveness.

    • Donald
      June 9, 2011, 7:53 am

      It’d be nice, Richard, if all the praise for Fayyad’s accomplishments that we’ve seen from the pseudo-liberal press and pseudo-liberal Zionists had been accompanied by the necessary qualifications. You know, maybe some mention of political repression and the fact that the economic growth was largely due to foreign aid. I’m willing to give whatever credit is actually due to Fayyad, but people have just been lying about the true situation.

      “Without Fayyad, there would be neither prospects of Palestinian statehood (resulting from international credibility) nor the level of economic growth that does exist.”

      International credibility appears in this instance to reflect badly on those people who hand out the international credibility merit badges. Your argument is circular. Fayyad has credibility because the people who want him to act as a puppet bestow credibility on him. Again, it’s been impossible to have a serious discussion of the pluses and minuses of whatever the PA has done because the mainstream press and US politicians have functioned as Fayyad’s cheerleading squad rather than report all the facts.

      “Another “no” here. Don’t we have enough “no”‘s from Netanyahu and Arafat?”

      This reflects your mindset. Any mention of facts which upset your preferred narrative is equated to Netanyahu’s intransigence. And for some reason you bring Arafat into the discussion–he was no more a rejectionist than any Israeli PM we’ve seen so far. Also, you might have noticed, he’s dead.

      • Richard Witty
        June 9, 2011, 8:21 am

        Sadly Donald,
        You abuse the credibility that you could potentially earn by using terms like “puppet”.

        Again, the contrast with “no’s” is “yes’s”, and that is what Fayyad brings.

        He has the potential to end the Israeli occupation (and leave the parties standing), whereas centuries of dissent do not have the potential of either ending Israeli occupation, nor of leaving the parties standing.

        I find it weird that you would regard Fayyad as enemy. I don’t have a clue why someone as intelligent as Adam would adopt such a regressive attitude towards the development of Palestine, even if limited and only in sectors.

        Fayyad is a Palestinian hero, one that makes Israeli goals of annexation impossible. The only one so far that has accomplished that, and you work to trash that progress.

      • Koshiro
        June 9, 2011, 8:44 am

        “Fayyad is a Palestinian hero”
        No, he isn’t. He’s a Western hero. He’s not all that popular among Palestinians.

        “one that makes Israeli goals of annexation impossible.”
        How so? Annexing only the juicy land tracts while cramming the Palestinians together in their urban areas has always been the Israeli game plan. Fayyad doesn’t have any control over areas Israel has tagged for annexation anyway.

      • Chaos4700
        June 9, 2011, 8:45 am

        That’s cute. In your eyes, Fayyad is basically the “Yes we can!” Palestinian Obama. And you like that.

        No surprises there, I suppose. People who have two different things coming out of either side of their mouths tend to flock together for validation. You know I think it’s for the Palestinians to decide whether they consider Fayyad a hero, not you.

        And as far as ending the occupation? Every official report about that indicates the occupation is getting more brutal, more pervasive, and in raw terms of numbers it is getting bigger. It doesn’t matter how healthy your heart is, if you have a tumor the size of a grapefuit growing on the side of your liver, you’re probably still nearly dead.

      • Citizen
        June 9, 2011, 9:02 am

        Ignore Richard Witty’s usual grossly misleading spiel and go here to find the reality of what Fayyad has accomplished (and Not) with foreigners’ cash: link to electronicintifada.net

      • James North
        June 9, 2011, 9:07 am

        Richard Witty said, ‘I haven’t been to Israel/Palestine since 1986. Nothing I have ever said on Mondoweiss suggests that I have close ties to anyone in Palestine, unlike many of the posters and commenters here. Still, I don’t hesitate to call Fayyad “a Palestinian hero.” I don’t have any facts to support that assertion. But my dream castle view of Israel requires it.’

      • Donald
        June 9, 2011, 9:17 am

        “I find it weird that you would regard Fayyad as enemy. ”

        It’s weird that you have to project your own binary thinking about Fayyad onto me. I don’t regard him as a hero or as an “enemy”. I simply stated that Western propagandists have exaggerated his economic accomplishments and downplayed the political repression, or worse, portrayed the political repression under the PA as a good thing. If you reread the my post (assuming you read it at all) you’ll notice the complaint that it’s been impossible to read an objective summary of the pluses and minuses of Fayyadism in the mainstream press because they cheerlead. You respond to that by ignoring my acknowledgement that there might be some “pluses” and criticize me for not cheerleading. Weird.

      • marc b.
        June 9, 2011, 9:26 am

        Fayyadism is based on the simple but all-too-rare notion that an Arab leader’s legitimacy should be based not on slogans or rejectionism or personality cults or security services, but on delivering transparent, accountable administration and services.

        what an ass. ‘an arab leader’s legitimacy’ (once again friedman is mentally incapable of analysis more complex than a jerry bruckheimer script) should be based on whether the trains run on time, not that leader’s popular mandate.

      • Richard Witty
        June 9, 2011, 11:19 am

        The common stimuli, a programmed response, remains “the west like him, we hate him”.

        Its foolish.

        He’s gone to 7% growth. Work to remove the occupation so the growth is 15%, with the conditions of self-governance, freedom of movement, democratic rights.

        Don’t trash what you and others have achieved by trivial thinking.

        With the elimination of the occupation, but isolation for Palestine because of animosity only towards Israel, or civil war in the context of a single state, Palestinians could be at 40% unemployment, not 24%.

        Forward, not reactive, please, for all of us.

      • Citizen
        June 9, 2011, 11:40 am

        Witty, yours is the trivial thinking in the larger context of basic humanitarian civil rights and international laws spelled out by Geneva and progeny since, and in accordance with the Nuremburg Trials. So I will merely direct the MW readers to my comment above which you ignored; it contains the hotlink to what Fayyadism really has, and has not accomplished to date.

      • Donald
        June 9, 2011, 3:21 pm

        “The common stimuli, a programmed response, remains “the west like him, we hate him”.

        Its foolish.”

        The post was about how the claims of 7 percent growth are highly misleading. Ignoring this and exaggerating Fayyad’s accomplishments is both foolish and dishonest. It’s a great way to discredit whatever real good he has accomplished, if any.

        You never seem to get this–distortions, obvious one-sided bias, rationalizations, and one-sided cheerleading are great ways to make your position seem less plausible. It makes it seem like you don’t really have a good case if you have to resort to such methods. Here you are complaining about a post that shows that Fayyad’s supposed accomplishments are less than meets the eye. Rather than defend whatever is real about them, you shoot the messenger and simply repeat the propaganda you would like us to swallow. Make a better argument.

      • James North
        June 9, 2011, 3:34 pm

        Richard Witty said, ‘Just a few days ago, I threw up my hands in exasperation at what I called the nonexistent chances for peace. I even took a nasty swipe at the existence of Mondoweiss, suggesting it was all a big waste of time and that I was going to retire and act locally in my vegetable garden.
        ‘But I couldn’t help myself. Israel remained under attack, so I just had to spend a dozen comments today to defend it. My vegetables may need fertilizer, but my psychological need to protect my dream castle view of Israel comes first.’

      • James North
        June 9, 2011, 3:42 pm

        Richard Witty added, ‘My comment total has now reached 9784. Please join me for an informal celebration when I pass the 10,000 mark. That’s pretty impressive for someone who just the other day suggested Mondoweiss was useless.’

      • marc b.
        June 9, 2011, 4:07 pm

        Please join me for an informal celebration when I pass the 10,000 mark. That’s pretty impressive for someone who just the other day suggested Mondoweiss was useless.

        i think that’s what’s called ‘projection’ in pop psychology circles.

  11. optimax
    June 8, 2011, 11:54 pm

    Wonder how much their going in debt?

  12. Thomson Rutherford
    June 9, 2011, 12:28 am

    This really shouldn’t have come as a surprise…. Still, I imagine it might come as a shock to some on the Times editorial page.

    What can you expect? They get their news from their Israeli reporters Ethan Bronner and Isabel Kershner, who spend all their time jawing with Israeli government officials and publicists. And I get all my news from the weather report.

  13. Thomson Rutherford
    June 9, 2011, 1:27 am

    Ray Takeyh has an interesting op-ed piece in today’s NYT entitled, “A Post-American Day Dawns in the Middle East.” There are some perceptive observations about Egypt, Iran, Syria, and Iraq. On the broader theme of the article, here are some excerpts:

    Even as Washington struggles to come to terms with the Arab Spring, the Middle East is imperceptibly moving to a post-American era.

    In Damascus, Bashar al-Assad’s brutal repression of his citizens has simply put him beyond the pale. Should he manage to survive, the so-called “Syria option” — whereby Israel and Syria trade land for peace — is all but dead.

    The Palestinian Authority’s decision to seek statehood at the United Nations has drawn much consternation in Washington. The Palestinians have lost the “armed struggle,” but the notion that American-led dialogue can relieve their burden has a diminishing audience among the Palestinians.

    Nor is America likely to find much solace among emerging democracies such as Iraq and Egypt. The well-demonstrated nexus between nationalism and democracy makes it difficult for leaders whose position rests on serving their people’s interests to also embrace Washington’s priorities.

    All this is not to suggest that new democracies will rupture relations with the United States, but that in certain important respects their policies could challenge American parameters.

    The trend away from American dominance predated the Obama administration, and its ramifications are likely to unfold long after it leaves office.

    As America’s influence gradually recedes, and its alliance system deteriorates, the U.S. will find itself less capable of realizing some of its objectives. Washington may not have sufficient leverage to prevent the Syrian regime from abusing its citizens, compelling Iran to reverse its nuclear ambitions, or for that matter dissuade the Saudis from obtaining a bomb of their own.

    The post-American Middle East may be more democratic in some of its corners, but it is also likely to be more turbulent and unstable.

    The struggle of the Middle East during the past century was a determined quest to exempt itself from great-power rivalry and superpower dominance. This is a populace that eagerly participated in bloody anti-colonial struggles, lent its sympathies to those calling for neutralism from the Cold War power blocs, and expressed its solidarity with third-world revolutionary resistance.

    The era of self-determination may have finally arrived. But, it is likely to be an era accompanied by its own set of challenges and perils.

    Here’s the link:
    link to nytimes.com

  14. gingershot
    June 9, 2011, 8:21 pm

    OT –

    Can one of you guys bump this to Phil — fascinating!

    I don’t know how to do that

    Thanks, Ginger
    Haaretz exclusive: Secret cables show Israel’s battle plan over Palestinian UN bid
    Foreign Ministry documents outline instructions to envoys to thwart international recognition of Palestinian state.

    link to haaretz.com

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