The PA’s Self-Inflicted Financial Wounds

Since writing last week’s post on the hypocrisy of trying to “help the Palestinians” by throwing actual Palestinians out of work, I’ve discovered more support for my claim that ordinary Palestinians agree with me on this issue. The Forward and the Christian Science Monitor both interviewed Palestinian employees of SodaStream, the now-famous Israeli company with a plant in a West Bank settlement, and were told emphatically that these employees opposed a boycott of the company that might cost them their jobs. The Monitor also spoke with Palestinians not employed by SodaStream, who said that far from wanting the company boycotted, they wished they could trade their own jobs for SodaStream’s better pay and shorter commute.

BDS supporters have a simple answer to this: Israel, they charge, is strangling the Palestinian economy; just force it out of the West Bank, and Palestinians will create plenty of jobs to replace Israeli companies. The problem with this argument is that the real impediment to Palestinian job creation isn’t Israel, but the Palestinians’ own government. And nothing better illustrates this than the case of Palestinian-Canadian investor Mohamed Al Sabawi.

In December, the Palestinian Authority summarily arrested Sabawi and held him for eight hours. Two weeks earlier, on November 18, he had publicly called for ousting PA President Mahmoud Abbas, and his arrest stemmed from a complaint about this criticism filed by a member of Abbas’s Presidential Guard.

Moreover, immediately after Sabawi publicly criticized Abbas, the Palestinian Land Authority mysteriously stopped registering and parceling a large amount of land that a Sabawi-owned company had bought for resale. The company was told, unofficially, that this was on direct orders from Abbas’s bureau. As a further penalty, Abbas’s Presidential Guard canceled all the insurance policies it had purchased for its members from another Sabawi company.

Sabawi is the kind of investor one would think the PA would court. His Ahlia Insurance Group employs hundreds of Palestinians in the West Bank, while the land resale project was arguably even more valuable to the PA. That project, run by Sabawi’s Union Construction Investment company, had three goals: making it easier and cheaper for ordinary Palestinians to buy land by sparing them the byzantine registration process (which can take years); developing parts of the West Bank distant from Ramallah, where housing has become very expensive; and putting unregistered land out of Israel’s reach by registering it as private property. The idea was to buy up large tracts of land and shepherd it through the registration process–which the company could do more cheaply thanks to economies of scale–draft master plans for construction and obtain the requisite PA permits, then parcel the land into quarter-acre lots and sell them to ordinary Palestinians. But with the registration process indefinitely suspended, nobody wants to buy from UCI anymore, and the company has suffered heavy losses.

Sabawi’s son Khaled also owns a company, Mena Geothermal, whose “green energy” air conditioners won an international prize last year. But Khaled has now transferred his firm from the West Bank to Jordan, and says his father is gradually liquidating his West Bank assets as well.

In short, with its own two hands, the PA has driven lucrative businesses out of the West Bank–businesses that would have provided it with much-needed jobs and tax revenue. As Khaled said bitterly, any talk about bolstering the Palestinian economy under such circumstances is “nonsense.”

Such self-inflicted disasters have nothing to do with Israel, and ordinary Palestinians are honest enough to admit it: As one of SodaStream’s Palestinian employees told the Forward when asked about the claim that “the occupation” thwarts Palestinian development, “I think we have to stop putting all our faults on the Israeli side.”

It’s long past time for the West to be equally honest. If well-meaning Westerners really want to improve conditions in the PA, they need to finally put the onus where it belongs: not on Israel, but on the Palestinians’ own dysfunctional government.