http://www.brandeis.edu/centers/crown/publications/WP/WP2.pdf
Introduction
June 2007 marked a turning point in the Gaza Strip’s long, troubled history. Five days of a new round of internecine fighting during the second week of that month between Hamas- affiliated armed militants and the Fatah-allied security forces of the Palestinian Authority (PA) left 135 Palestinians dead and 487 injured. The short factional face-off finally ended, on June 14, with the Islamist movement swiftly assuming complete control over the entire Gaza Strip.
Equally dramatic were the developments on the domestic political scene that soon followed. The PA president, Mahmoud Abbas, declared a state of emergency in the Palestinian areas; dissolved the fragile, three-month-old Hamas-led national unity government; appointed an interim emergency government, headed by former PA Finance Minister Salam Fayyad; and promised new elections. For its part, Hamas, having scored a stunning victory 18 months earlier in the January 2006 legislative elections, vehemently rejected Abbas’s move, deeming the new, West Bank-based PA cabinet unconstitutional and continuing to regard the Hamas- led government as the legitimate, democratically elected representative of the Palestinian
people.
As the guns in the streets of Gaza fell silent and the bloody showdown was over, a new reality suddenly emerged on the ground: An already geographically disconnected Palestinianterritory has de facto become politically divided into two separately governed rival entities: one, in the virtually isolated Gaza Strip, ruled by Hamas; the other, in the territorially fragmented and occupied West Bank, run by Fatah.
More significant, perhaps, for the immediate political and economic future of the Palestinian areas were the related regional and international developments that followed. In a show of support for the PA president and his new government, Israel and other key figures in the donor community, mainly the United States and the European Union, undertook a number of policy measures that were intended to asymmetrically influence economic conditions in the newly politically-split Palestinian areas in a bid to influence the political orientation of their respective populations.
On the international front, immediately following Hamas’s violent seizure of power in Gaza, the Middle East Quartet (the United States, the European Union, the United Nations, and Russia) issued a statement recognizing the new Ramallah-based PA government -a position that was reiterated a month later when the Quartet met in Lisbon, Portugal. At the same time, the United States and the European Union, who both suspended all direct financial and economic aid to the PA after the formation of Hamas-led government in March 2006, announced their decision to lift their 15-month-long financial and diplomatic ban on the PA and to resume direct assistance to the new Fatah-led cabinet in the West Bank. Their decision excluded Hamas-controlled Gaza, to which emergency humanitarian aid would continue to be delivered through various United Nations agencies, NGOs, and the year-old Temporary International Mechanism (TIM) -bypassing Hamas, as was the case before the takeover.
The Israeli government, in line with the Western policy stand vis-à-vis the post-mid-June Palestinian realities, took a number of steps that would later have a measurable impact on economic and humanitarian conditions in the Palestinian areas, especially in Gaza. Three of these measures in particular stand out for their largely uneven impact on the Palestinian population: (1) the gradual release (to the West Bank-based PA government) of an estimated $650 million in Palestinian tax money-the so-called clearance revenues-that Israel collected on behalf of the PA but had withheld since the establishment of the first Hamas-led government in March 2006; (2) the official closure of Gaza’s three main border crossings, which link the Strip with Israel (the Erez and Karni terminals) and Egypt (the Rafah terminal); and (3) the suspension by the Israeli Customs Authority of the “Gaza customs code,” which is used to identify imported goods en route to Gaza through Israeli ports.
Unlike the West Bank, however, where some of these politically motivated Western and Israeli policies were designed to yield some positive economic results, other measures were quick (as will be illustrated in the third section of this paper) to have their crushing impact felt in Gaza, leaving the largely destitute population of the coastal Strip more isolated than ever before, and increasingly dependent on foreign handouts. More devastating, perhaps, were the trade-related Israeli measures that have rapidly suffocated Gaza’s fragile economy to the point of complete-and possibly rsible-collapse.
These Israeli/Western policy steps, commonly referred to as the “West Bank First” strategy (hereinafter WBF model), along with their various potential consequences, are likely to dominate the economic and political landscape of the Palestinian areas for some time to come. Their basic underlying assumption, which will be further elucidated in the following section, is that a resumption of direct transfer of financial resources (both foreign aid and clearance revenues) to the new PA government in the West Bank, coupled with a non-humanitarian economic and political blockade of Hamas-controlled Gaza, would enable the former to prosper and cause the later to stagnate-thereby turning Gaza’s population against the Islamist Hamas and in favor of joining their fellow Palestinians of the West Bank in order to share in their engineered economic fortune.
Whether or not such a novel approach to the post-takeover Palestinian political realities-and to the wider Israeli-Palestinian question-could in reality work has lately been the subject of analyses that have spawned an interesting assortment of views across the board. This paper is an attempt to contribute to this still ongoing discussion by focusing exclusively on the political economy aspect of the issue-an area that has been largely missing from the debate.
To achieve this task, most of the analysis presented in this study, after a short review of the new model and the impact it has had so far on Gaza, will address the question whether the West Bank-given what has become of its economy since the start of the second Intifada in September 2000-could in reality make a quick, significant, and sustained U-turn toward recovery and growth as hypothesized by the WBF strategy. This question, in turn, raises three additional, related questions-which will also be addressed in this study-about: (1) the conditions that are necessary in order for the model to succeed; (2) the prospect that these conditions could be adequately fulfilled under the present convoluted socioeconomic, political, territorial, and security environment in the West Bank; and (3) the various impediments and complications that could potentially engender the failure of the model.
Based on what has emerged from our analysis of these issues, there is a good reason to believe (as will be shown in the fourth section of this paper) that “success” of the WBF model may not be easily achievable, and that the new model may quickly prove to be too optimistic, if not overly simplistic, for smooth implementation on the ground. If this indeed turns out to be the case, then it is not totally inconceivable that the advocates of the WBF model could end up, in the not-so-distant future, with a very messy picture on the ground; much messier, perhaps, than the one the new strategy was ostensibly designed to deal with. One should not hasten to dismiss such a view as needlessly pessimistic. After all, the recent history of the region provides many examples of how ill-thought-out and poorly implemented plans can produce disastrous outcomes. The one-sided Gaza disengagement plan is a perfect example; others are not difficult to find.
The analysis presented in this paper, therefore, suggests a twofold goal for it. The first is to caution against the potentially grave consequences of the new strategy. The second is to strongly make the case for the need to shift gears, change course, and embark on a very different strategy-one that would take full advantage of the sudden renewed interest (in the wake of Hamas’s takeover of Gaza) in the Israeli-Palestinian conflict in a way that would refocus the entire process on issues of long-term interest for all sides.
The discussion in this paper is organized as follows. After this Introduction, which serves as the first section of the study, the second section presents a detailed description of the nature of the WBF model and its basic assumptions. The third section provides a brief account of the post-Hamas takeover economic and humanitarian developments, especially in Gaza, that have transpired as a result of the implementation of the new strategy. The fourth section, which represents the main part of the study, is an analysis of the essential conditions and potential impediments that might lead, respectively, to the success or failure of the WBF model. The fifth section concludes the paper with some final thoughts.
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