Palestinians on both sides of the Green Line think of themselves as one people, but economically and demographically, they are rapidly growing apart. It’s increasingly a tale of two Palestines: one inside the Green Line, that is growing more prosperous and integrating into Israeli society; and another in the West Bank and Gaza that is struggling in a stagnant economy and with few prospects of change for the better.
Those differences may have gotten lost in the panicked reaction to the terror attacks in March, two of them staged by Israeli Arabs and one by a West Bank Palestinian.
Three incidents don’t really provide a good statistical sampling of anything, but that hasn’t stopped many from concluding that all Palestinians relate to Israel the same way: as the enemy and oppressor that must be fought by violent means.
It would be facile to say that politically inspired violence is inevitably connected to economic distress. But poverty and hopelessness do contribute to it, just as prosperity can be strongly correlated with political stability. How does that play out in the two Palestines?
Sealed off and desperate
The situation in Gaza is so desperate that it really needs no numbers to illustrate. Sealed off from the outside world by Israel and Egypt and controlled by an organization that shows zero interest in Gazans’ welfare, 80 percent of the population requires assistance from international organizations.
By this miserable standard, the West Bank is in much better shape. Unlike Gaza, it has the Israeli economy to provide something of a lifeline by employing tens of thousands of Palestinian laborers. But that’s about it: West Bank Palestinians are trapped in a vise of the occupation and its checkpoints on the one side and the sheer incompetence and corruption of the Palestinian Authority on the other.
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The result is that the poverty rate (the proportion of people living on less than $5.50 a day) in Gaza is around 59 percent, the World Bank estimates. Unemployment in Gaza is more than 50 percent. The West Bank’s numbers are only better by comparison: 29 percent and 14.7 percent, respectively.
There's nothing on the horizon that points to a better economic future. The best an ordinary Palestinian can look forward to is getting relatively well-paying work in construction or some low-skilled profession. There is nothing like a functioning economy in the West Bank or Gaza. Even the prospects of latching on to Israel’s high-tech economy, as subcontractors or employees for Israeli companies, are remote: Israeli startups would rather employ Ukrainians than Palestinians.
Neither the PA nor Hamas have laid even the most rudimentary foundations for a digital economy. As bad as Israeli schools are, especially for Arab students, Palestinian schools are much worse. Palestinian universities turn out large number of graduates, even in Gaza, but they have no place to put their education to work.
In Gaza, at least, obtaining higher education looks like a way for unemployed young people to keep busy rather than as an investment in the future.
The Palestinians on the Israeli side of the Green Line have it better by virtue of the fact that they live as citizens of a developed economy. They do not enjoy all its benefits (their communities get far few state resources and they have to contend with deeply embedded discrimination) but they have been lifted, like everyone else, by Israel’s long years of economic growth.
The result is a growing Israeli Arab middle class and declining poverty rates that are helped along by lower fertility rates and growing numbers seeking higher education. Today, the fertility rates for Jewish women actually exceed those of their Arab sisters; Arab students comprise 17 percent of university enrolments, almost equal to their share of the population.
Of course, there is a long way to go, but the trends are in place, and the last two governments seem determined to make sure they persist. Last October, the cabinet approved 32 billion shekels ($10 billion) over five years for the Arab community to support employment, to build new schools and develop infrastructure. to help make up for years of underinvestment. For every setback, like the Nation State Law, Israeli Arabs can at least see positive developments.
It would be ridiculous to suggest that growing prosperity and social integration of Israeli Arabs will certainly diminish anti-Israel violence. The same applies to the West Bank in reverse: narrowing economic prospects aren’t necessarily going to lead to a third intifada. The dynamics are complicated and trends never progress in a straight line.
For one, the progress Israeli Arabs have made hasn’t been shared equally. Young men are falling behind women in pursuing higher education and finding quality employment. We have seen the results in rising rates of crime and that almost certainly played a major role in the May 2021 rioting in mixed Arab-Jewish cities.
In the West Bank, according to security sources cited by Amos Harel, economic distress has so far not fed into widespread violence; rather, it has forced ordinary Palestinians to focus on getting through the month financially.
That could easily change – large numbers of un- and under-employed young men have the time and leisure to ponder their problems and look (online and elsewhere) for solutions. There’s no formula for determining when economic ills and politics will connect to produce an explosive outcome, but it seems inevitable that they will by hook or crook.
Prime Minister Naftali Bennett seems to understand that. As he told The New York Times last August, “They’re [the Palestinians] not going anywhere, we’re not going anywhere — we’re here together, stuck. But then what do we do? Economy, economy, economy …. If people have a good future, have a reasonable job, can provide for their family with dignity and send their kids to good education,” this would be “way more important than dealing with the usual stuff that got us nowhere.
”The economy is just one way Bennett wants to “shrink the conflict,” that is remove the Palestinian issue from the diplomatic agenda. Naturally, that gets a lot of people’s backs up for sugar-coating the occupation. They have a point, but the implied message is that Palestinian resistance isn’t strong enough to survive without Palestinian suffering. The dream of an independent Palestine isn’t enough.
In any case, the things Bennett has done to date – offering more building permits in Israeli-controlled Area C, increasing the number of permits for Palestinians to work in Israel – seem less designed to create a thriving economy than to prevent economic distress from igniting another intifada.
Intentionally or not, Bennett is ensuring that the two Palestines grow even further apart.