What Could Trigger a Third Intifada? The Palestinian Economy, Stupid

A West Bank economy in distress creates the kind of combustible material that could let the Temple Mount clashes explode into mass unrest.

David Rosenberg
David Rosenberg
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Protesting the unrest at Al-Aqsa, in Hebron: If he had a job, he might not have time to do this.
Protesting the unrest at Al-Aqsa, in Hebron: If he had a job, he might not have time to do this.Credit: Reuters
David Rosenberg
David Rosenberg

When Palestinian violence erupts, the usual suspects are trotted out: the stalled peace process and the lack of a political horizon for the Palestinians, the ever-expanding settlements, or Israel’s iron-fisted rule over the West Bank.

When the unrest involves the Temple Mount, Palestinians will invoke the threat of the area’s religious status quo.

So, that’s what we’ve being told again amid an upsurge of lone-wolf attacks and weeks of clashes between police and protestors on the Temple Mount. Sooner or later it will explode into a Third Intifada.

A poll released by the Palestinian Center for Policy Survey and Research found that 57% of Palestinians supported a return to an “armed intifada,” up from 49% in the same poll three months earlier.

But why? Is the unrest religiously motivated? Separate reports by the International Monetary Fund and the World Bank report released this month point to a more plausible reason for the upsurge: The steady deterioration of the West Bank economy over the past three years.

Gaza, of course, is an economic basket case. With the settlers evacuated and the borders sealed, all Gazans can do is launch another short missile war, get pounded again by Israel and be in worse shape than before. But the West Bank is struggling, too, and its economic condition is more relevant to Israel.

West Bank Palestinians are positioned to wage the kind of street violence we last saw in 2005. In terms of lives and bu, the West Bank Palestinians could take a far greater toll on Israel than Hamas can.

Nothing per capita

Although it achieved a brief surge of growth last year, West Bank economic growth has slowed to zero per capita, i.e., Palestinian standards of living are stagnant. Unemployment declined in the first half of this year -- to 16%, from 18% in 2014. And the only reason that happened is because Israel is letting more West Bankers work in Israel. Manufacturing, agriculture and construction output were also down in the first quarter of the year.

Apart from employment in Israel, the only reason the West Bank has a functioning economy at all is that the Palestinian Authority provides well-paying work, helped by generous (albeit steadily declining) foreign assistance. Public-sector wages account for 16% of the West Bank gross domestic product, which is some 60% more than in average comparable economies, according to the World Bank.

The security forces alone employ 65,000 people. That's not much by the standards of other comatose but repressive Middle Eastern economies, but it is very big by global standards.

Saddled by a huge wages bill and declining aid, the PA invests little in infrastructure or other economy-priming activities. It’s no great surprise that the private sector doesn’t invest either.

Dratted implications

Palestinians don’t like to talk about the economic factor in creating unrest, because it implies that the PA should be engaging in internal reforms, rather than fighting the good fight for a state. In any case, it would run against the private interests of the Palestinian leadership, which lives well off an aid-dependent economy.

Israel’s peace camp doesn’t like the economic aspect of the conflict either, because it implies that Palestinians are less dedicated to the national cause than they are to feeding their families and that they can be bought off with the promise of a job. But in fact, when Palestinians are asked what they see as the biggest problem they face, poverty and unemployment come a close second (26%) to the occupation (28%).

A Palestinian militant exits a tunnel during a military-style exercise graduation ceremony in southern Gaza. And if he had better things to do?Credit: Reuters

Bibi has spoken about the link between economics and unrest, though as the record shows, he’s not interested in an economic peace either. It's just an excuse to avoid embarking on a diplomatic process.

Israel has taken some measures to ameliorate the West Bank’s economic distress, but is effectively in league with the PA in doing nothing to solve it.

Even from Bibi’s point of view, this makes no sense. On the one hand he’s a dedicated friend of the status quo; on the other he seems intent on allow the conditions in the West Bank to fester that could potentially undermine that status quo. One can only assume he is beholden to the rightist fear that Palestinian economic development would fan the flames of political independence. In any case, it would require the settlers to treat the Palestinians in their midst as economic equals – co-workers, business competitors and even employers of Israelis, not just a ready pool of labor at the bottom of the market.

Economics alone won’t ignite a next intifada, but it provides the kind of combustible material that could enable a small incident to spread quickly and uncontrollably.

Unemployed and under-employed people, like those filling out the ranks of the security forces, have time on their hands and few prospects. Justifiable anger and frustration that might be expressed at the dinner table (under better economic conditions) or at the ballot box (under more democratic political conditions) moves to the street where it has time to the time and opportunity to spread.

The Temple Mount unrest could be what ignites it. To the average Israeli, the Temple Mount is a marginal affair -- Muslim extremists making hay with Jewish extremists and opportunist politicians cynically exploiting an artificial issue. This is a terrible misreading of the situation. For better or for worse, religion is important to Palestinians and Muslims in general, or we wouldn’t have seen the democratic, liberal hope of that Arab Spring morph quickly into the Muslim Brotherhood and Islamic State.

The Palestinians’ problem is that the world -- even in the Arab world -- has lost interest in them. Obama didn’t have time to mention them this year in his address to the UN General Assembly, though he dedicated much of his speaking time to the problems of the Middle East.

"Does President Obama think that he can fight terror and defeat [Islamic State] and achieve peace and stability in the Middle East by continually ignoring the occupation and Israeli settlements in the West Bank and continued aggression against the al-Aqsa Mosque?" an angry Saeb Erekat asked afterwards. The answer seems to be yes. A Third Intifada would almost certainly achieve less than the Second.

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