[Re: Islamic Resistance]

Abu Nasr abu-nasr at SPAMusa.net
Wed Jun 14 15:47:33 MDT 2000

Dear everybody!

Here is an extremely interesting Marxist analysis of the economic meaning of
the Oslo settlement that is being implemented by Yasir Arafat at the behest of
Zionism and Imperialism.  Adel Samara is well known, edits the journal Kan`an
and was also recently published in the Journal of Palestine Studies (vol 29,
no. 2, winter 2000).

Oh, by the way, this Marxist analysis that appeared in a leftist Israeli
publication, was forwarded to me courtesy of the Islamic Association for
Palestine.  I hope this link with what some have called fundamentalist
"lunatics" doesn't deter anybody from reading it.

With revolutionary greetings!

Abu Nasr

Forwarded Marxist economic analysis follows:

The Hidden Economic Logic of Arafat's Surrender and other matters
pertaining to the Palestinian economy: An Interview with Dr. Adel Samara


Roni Ben Efrat * <oda at netvision.net.il>

This article first appeared in the March - April, 2000 edition of
"Challenge" **

(Reprinted with prior permission from the author)

Adel Samara was born 56 years ago in the Palestinian village of Beit Ur.
Inspired by Marxist philosophy, he chose to study political economy. He
began his higher education in Lebanon and completed his Ph.D. at Exeter
University in Great Britain. Palestinian universities have refused to hire
Samara. His political and social critiques are too radical for them, he
believes. For thirty years he has farmed for a living and continued to
write. Three regimes have arrested him: first, the Jordanian, because he
was active in the Palestinian Left; second, the Israeli, because of his
part in the Palestinian resistance; third and most recently, the
Palestinian Authority, because he was among the twenty who signed the
Manifesto of November 27, 1999. (See Challenge # 59.) Samara has published
several books in Arabic and English, among them Imprisoned Ideas
(English), including a chapter on globalization in which Samara gives
sources for the data cited in the following interview. Other titles by
Samara include: Industrialization in the West Bank: A Marxist
Socioeconomic Analysis; Political Islam, Fundamentalism or National
Struggle; and Women versus Capital: the Socioeconomic Formation in
Palestine. I interviewed Samara at his office in Ramallah on February 2nd.

Question. Since the War of 1948, Palestinians have endured five decades of
Occupation. First, they were annexed to third-world economies: the West
Bank to Jordan and the Gaza Strip to Egypt. Then came the War of 1967. The
old ties were severed, and these basically agrarian economies were
suddenly linked to modern Israeli capitalism. Now we stand within the
so-called peace process.. What is the economic legacy from this long period
of Occupation?

Samara: If you look at the military orders that Israel issued to
Palestinians during the years of direct Occupation, you find that half of
them concerned economic affairs. Their main thrust was to make the economy
of the West Bank and Gaza captive to Israel's, curtailing relationships
with the rest of the world. To accomplish this, Israel used several
techniques. For one, it regulated imports and exports. Take sugar, for
example. After 1967 Palestinians weren't allowed to import it cheaply from
Cuba. They had to buy it from countries that Israel had trade agreements
with, such as the US. Or yeast: Chilean yeast was cheap, but Israel wanted
us to buy from Europe, so it slapped a customs surcharge of 15% on the
Chilean yeast. That's how it went, and that's how it goes today, because
the Oslo Accords merely perpetuate this. Gazan businessmen recently wanted
to buy watermelon seeds from Egypt at $0.70 per kilogram. They'd even
signed a contract. But no, Israel rejected it, forcing them to buy
American seeds at more than eight times the price. Of course, above all,
Israel forced us to buy from itself. Before it got into hi-tech, the
Territories were its biggest foreign market after the US. Nowadays
Israel's exports to the Palestinians reach $2.4 billion a year that's
very near the total of Palestinian imports. On the other hand, Palestinian
exports to Israel amount to about a tenth of that figure. With Israel
using them as a captive market since 1967, the Palestinians had to pay
Israeli prices, but their incomes didn't compare with those of Israelis.
The only recourse for many was to commute to work in Israel in order to
meet their basic needs. It might have been different if Israel had let us
develop our own infrastructure and industry. But that was the last thing
it wanted! The Occupation authorities issued only six or seven licenses
for factories per year and only to recipients they considered loyal.
Also, land confiscations about 60% of the land and restrictions on farm
exports threw farmers out of work. Approximately 44 percent of the labor
force were still working in agriculture at the end of the sixties; today
the figure is 12 percent. Some of the surplus labor migrated to the Arab
oil states, but most of those who stayed had no choice except to commute
to Israel. When the intifada started, there were nearly 165,000
breadwinners about a tenth of the total population of the Territories at
that time crossing the Green Line to and from work every day. Of course,
that was related to another strategy as well: to keep us politically quiet
by making us economically dependent. While Israel forged this direct link
between itself and the working class, it did something similar with the
local Palestinian capitalists. Since these depended completely on the
authorities to approve their investment projects, they designed the latter
according to Israel's priorities. That is why most investments went into
construction, which wouldn't compete with Israeli industry. In other cases
they ended up merely marketing Israeli goods. A new class arose, the
comprador subcontractors for Israeli business who now make up a
dependent semi-bourgeoisie. They've replaced the landowners who'd thrived
under Jordan. There is not, then, the usual relation of labor to capital,
both the working-class and the capitalist sectors are separately linked to
the Israeli center. The capture and distortion of the Palestinian economy
took other forms too. The cities and villages of the West Bank and Gaza
have not been able to maintain direct, organic relationships with each
other. Instead, they are tied to various Israeli cities, with the result
that the whole Palestinian economy, lacking a center, has become
peripheral. There were other distortions during the years of direct
Occupation, and Oslo perpetuates them. Take banking. In 1967 Israel closed
all the banks in the Territories and opened 36 branches of its own, which
would not, of course, issue development loans. Rather than deposit their
money with them, Palestinians sent it abroad, leaving little for local
investment. The bulk of their savings still get shipped abroad today.
We'll come to that.

Q: Do you think the intifada had the potential to change the distortions
made by the Occupation?

Samara: The intifada brought about a new economic perception. This was
based on economic withdrawal from Israel.. I call it Development by
Popular Protection. The people began boycotting Israeli products and
developing their own sources and channels for consumption. They became
more self-sufficient. It's interesting that you never saw cases of extreme
poverty or hunger, such as you do today. But the Palestinian leadership
did not want to shape the intifada into a social and economic alternative.
They wanted to limit its function to that of a political tool. That was
the mentality of the comprador bourgeoisie I mentioned before: those
middlemen and subcontractors for the Israelis who had lost all belief in
the possibility of a productive economy or deep social development. Soon
enough we started hearing voices from the upper classes not from the
people as a whole calling for a settlement that was bound to be

Q: Which forces pushed for a settlement?

Samara: I can trace three and a half groups. The first and most important
group came from the Palestinian bureaucracy. I mean the leadership of the
PLO sitting in Tunis. These people became "capitalists" in an
unconventional way: not by production but by accumulating taxes and
property from Palestinians all over the world. For example, every
Palestinian working in the Gulf had to pay a tax to the PLO fund, "Sumud".
Thus the money that had been accumulated from the blood and sweat of the
people became the budget of the bureaucratic leadership. This budget was
not transparent. There was no accountability. Now, the Israelis had always
been looking for an alternative to the PLO. Well, Arafat and his
associates told them this would not be necessary. "Look", they said,
"we'll be the alternative you're looking for an alternative to
ourselves"! They never believed they would really be able to liberate
Palestine, and as a result they never believed in an independent economy.
The classic national bourgeoisie prefers to control its own markets and
resources, but for that you have to liberate your country. If you don't
believe you can, all that remains is to serve as an agent of the powers
that be and pull in your commission. In such a case, limited autonomy does
not seem a bad solution. It gives you a chance to maximize profits without
having to face sanctions for struggling against Israel. The second faction
that pressed for a settlement was the local bourgeoisie in the
territories. This was the comprador class I mentioned before. They too
believed that limited self-rule would enable them to stabilize profits.
They reconciled themselves to the concept of a "trickle-down" economy for
Palestine. The third group consisted of Palestinian capitalists living
abroad. Their homeland is a bank account, not a piece of ground in Haifa
or Jerusalem. These are millionaire speculators who supported Arafat and
the Madrid Conference, because autonomy would open a market here for them
to invest in. As for the half, it is made up of intellectuals theorists
for the so-called peace process co-opted by Arafat. But we may divide this
half in two. One group consisted in westernized Palestinian academics,
largely from Birzeit University, who were part of the negotiating team at
Madrid. Many still hold posts within various negotiating committees. The
second group consisted of figures that came from the Palestinian Communist
Party. After the collapse of the Soviet Union, they simply switched their
loyalty to the USA. Both these groups of intellectuals had a hand in
marketing Oslo.

Q: You implied before that the Oslo Accords perpetuate Israel's economic
policies during the Occupation.

Samara: Yes, in all major respects.. The first of the Oslo Accords provided
a rather blurred political picture, but it came into sharp focus in 1994
when the two sides negotiated the economic agreement known as the Paris
Protocol. Here the economic realities that had developed on the ground
during the years of direct Occupation received the stamp of legal
confirmation. If you read the economic agreement, you quickly see that the
political result can never be a truly sovereign state. Under Oslo the
Palestinians cannot separate from Israel. The negotiators went to Paris,
apparently, with the conviction that true independence was impossible.
After the PA took over, its economists suddenly started parroting World
Bank jargon. It was rather funny. They repeated the slogans of the free
market and neoliberalism, which sound strange in the midst of a shattered
economy. You can't build a national economy from scratch by following the
orders of the World Bank, which has another agenda.

Q: But they were talking about a new Singapore!

Samara: A myth! Singapore is here: It's Israel. The imperialists will
never allow a second Singapore beside an existing one. No way! The
Lebanese Maronites have also indulged in the illusion that the imperialist
powers would make their country another Singapore, but they're way behind
the Zionists! The basic flaw of the Paris Protocol is this: it establishes
Israel as the outer envelope for all Palestinian trade. Any exports or
imports have to go through Israel. The Protocol even contains detailed
lists covering more than fifty pages telling Palestinians what they can
import, from where, and what they can export, to where. For instance, they
are required to give priority to imports from Jordan and Egypt, because
these two countries support the peace process. I know from merchants that
when the PA gives import/export licenses, it is only after Israeli
approval. One Palestinian importer told me he was lucky: in his field, no
Israeli was importing otherwise he wouldn't have been able to get a
license. The Paris Protocol perpetuates the symbiosis with Israel itself.
It favors Israeli monopolies, like the Tnuva milk company. (See Challenge
# 59 RBE.) Of course, the topic of monopolies is a big one. Where the
Protocol leaves an opening, the PA rushes in with monopolies of its own.

The Paris Protocol says that neither side can take a step that will harm
the economy of the other. Well, the Palestinians were never in a position
to harm Israel's economy. Israel harms the Palestinian economy every day
by imposing closure on people and goods. Gazan goods are routinely held up
at the checkpoint for weeks. As for the workers, the Protocol provides
that a hundred thousand may be officially allowed into Israel. Because of
its incompetence in creating jobs, the PA has an interest in sending
workers there. Not only does this relieve tension, but the worker is a
source of income for the PA. It gets 75% of the income tax that is
deducted from his paycheck in Israel. If he is working in a settlement, it
gets 100% this gives the PA an incentive to tolerate the settlements. But
any economy that wants a measure of independence should minimize the
amount of emigrating labor and concentrate on creating jobs. Notice:
Israel can create, at will, an employment crisis for the PA. It can also
create a budgetary crisis: if it withholds that tax money, as Netanyahu
did for a while, the PA can't meet its huge internal payroll.

Q: Five years have passed since the Paris Protocol. Can you describe what
is shaping up?

Samara: The Palestinian economy is like a car with out a driver. One of
the chief motives at this point is to preempt expected opposition. In
order to create consent, Arafat employs around 87,000 people in a huge
paramilitary and civil apparatus. With such a big payroll to meet, he has
to find sources of income. One is the tax money collected by Israel and
passed on to him. Another is the Palestinian monopolies. According to my
colleague Sara Roy, five people in the PA control at least thirteen known
monopolies, including flour, sugar, vegetable oil, frozen meat, concrete,
gravel, steel, wood, gasoline and tobacco. In a young national economy,
monopolies if part of the public sector can protect people from high
prices. But these PA monopolies are curious formations not completely
private, but not public either. They are under the five members of the PA
elite, and there is no transparency concerning where the profits go,
though clearly a large part must go toward paying the salaries of the
87,000. This kind of thing is typical of Arab regimes elsewhere: to
control people by employing them in a bloated bureaucracy and police
force. Wages may be low, but the doors of corruption are open. Thus a gap
develops between those who belong to the apparatus and those who do not.
With the PA, though, there's a difference. The money comes not only from
the sources I've mentioned, but also from the backers of Oslo, the Western
capitalist donor nations. These claim to be supporting democracy and human
rights, but in fact they're financing a repressive and corrupt
bureaucracy, which preempts any chance for development. The donors know
this, but they don't protest. They want the peace process at any price.
The economy follows political needs with no economic logic. There are no
signs of progress toward a productive economy. The share of the industrial
sector in the Gross Domestic Product (GDP) remains at about 8%. The PA
talks endlessly about the importance of the "private sector". When we look
at the PA's actions, however, we see a different picture. It is so
enamored with the magic word "globalization" that it has thrown the doors
of the economy wide open. Foreign capital can enter or leave without
limit, and the little bit of local capital, instead of being invested
here, gets shipped out too. When the big multinationals enter the picture,
as the PA is encouraging them to, the local private sector moves into
subcontracting. On top of that, in its admiration for the free-market
economy, the PA has come up with an investment law that goes like this:
the bigger the company, the more years of tax exemption. Such a law is
monopoly-oriented. It makes smaller firms noncompetitive. This law also
fails to limit the percentage of foreign ownership in joint projects. So
where's your local private sector? Or look at the banks. A developing
private sector should be able to get loans from the banks, right? I have
figures from 1996. The ratio of loans to deposits was 90% in Israel and
80% in Jordan, but in the West Bank it was 22% and in Gaza 19%. What did
the banks do with the rest of the money they held as deposits? They
deposited it abroad! They had $1,350 million in individual and
private-sector deposits. Of this, they lent $310 million and sent $938
million abroad. There's your open-door policy, free trade and
globalization! And if we look at the loans, we see that 72% were given on
a short-time basis to keep people from going bankrupt. Real development
loans amounted to only 6% of the total. So what happened to the importance
of the private sector? It's all very strange. Banks lure the population
into saving more and then the same banks send the savings abroad. The PA
laws allow this. Meanwhile, the PA borrows from the donor nations. The
Palestinian banks have shipped more than $1 billion abroad, while the PA
has borrowed nearly the same amount from the donor countries! That's what
happens when you apply the World Bank's liberal policy. About two-thirds
of the money from donor nations enters in the form for loans, not grants
and with strings attached. These countries are not just donors, you see.
Nowadays, the PA asks for loans because the donors are minimizing grants.
Soon the whole population will find itself under a heavy burden of debt.
When the PA imposes higher taxes in order to pay this debt, the masses may
take to the streets. As in the years of direct Occupation, the biggest
field for investment remains construction. More than $1 billion has gone
into housing since Madrid. But such investment is a one-time thing: it
does not generate continuing jobs. One place where you will see activity
is on the borders with Israel. Ten industrial zones are due to spring up,
at a cost of $5 billion. This is in line with Israel's aim: to separate
Arabs from Jews while keeping the Palestinian economy integrated with its
own. How do you do such a thing? You build these zones. Then goods and
services will continue to flow back and forth, but people will not.
Entrepreneurs will get the benefit of Palestinian labor with none of the
security hassles. The industries will be low-tech, export-oriented and
labor-intensive, with few environmental controls a globalizer's dream.
The zones will be a leading factor in globalizing the Palestinian economy
and labor force. Naturally, this new reality will work against the
development of industrial zones deeper inside the Territories. The economy
will continue to lack a center. It will be connected to the Israeli
centers, as in the past, but also to the new industrial zones. Any
capitalist who invests in the Territories is obviously taking a risk. Tax
exemptions do not weigh as heavily with potential investors as other
factors, such as safety, stability and cheap labor. The West Bank and Gaza
are not high on the list of safe, stable places, and our labor is not
cheap compared to that in Egypt or Jordan. To build an economy under such
circumstances, there would have to be a real national will. The money is
there: Palestinians abroad have assets amounting to $135 billion. But in
an age of globalization, national commitment tends to fall by the wayside
when investors make decisions, especially when there is no strong
leadership intent on founding a state. As for the local capitalists,
ideally they should now be making short-term sacrifices in order to build
what people need at the present stage of economic development. But
everyone knows that Israel won't allow a national will to materialize, so
instead of a mentality of state-building, we have a mentality of "grab
what you can". The PA is created and financed by the imperialist
countries. In return, it delivers political services: it re-educates the
people and re-orders the social classes in the region. In re-education, it
puts out continuous propaganda about the benefits of the free market and
private enterprise. In class re-ordering, its elite has integrated itself
into a common front with the Israeli and foreign capitalist regimes by
adopting an open-door policy of free trade and by favoring foreign capital
over local. The result is to weaken small businesses and to increase
poverty. Per capita income in the West Bank, for example, has dropped from
$2037 per year to $1713. [time frame???] Another result is to increase
dependence on Israel. The PA remains unreal as a sovereign power, but very
real indeed as a power of repression.

Q: We see two directions today in the Arab world. There is the pro-Israel
one, expressed at Davos by Jordan and Saudi Arabia, which holds that
economic ties with Israel should not depend on political developments. And
there is the position of Arab critics in Egypt and Jordan who warn of a
reality expressed by the Seattle movement. Have the Seattle lessons
entered Palestinian discourse? Do people in the university, say, talk
about the dangers of globalization? Or do people on the Left do so
whatever is left of the Left? Are people aware of the danger they are in?

Samara: (Hearty laughter.) When you don't have a country it's difficult to
feel danger from global realities. When you don't have a skin, it's
difficult to feel pain. The academic circles here are merely agents of the
regime. The Left is Arafat's tail. I don't like it, I don't like even to
say it, but this is the sad fact. I haven't found a single article in any
of the leftist papers here about the dangers of globalization. Who dares
criticize the World Bank here? Nobody. I have been writing about these
things for several years, but only me. Sometimes I'm afraid I'm the only
reader of what I write. In the Arab countries the situation is totally
different. Recently I got permission to leave by way of the bridge, and I
was able to go to Amman to attend al-Mawsem al-Thaqafi. This is a large
conference for Arab thinkers, writers, artists and so on. I met many
intellectuals, and I found that the discussion centered on questions of
globalization, the liberalization of relations with Israel, and the
dominant role of America here. It was a breath of fresh air. Not like the
discourse here at all. It was very encouraging.

Q: So why can they see what people here can't?

Samara: Because if you take Syria or Egypt, you can see a mature
socioeconomic formation. You are talking about an identity, about a
country. Here we are socially fragmented: not a working class but a semi
working class, not a bourgeoisie but a semi-bourgeoisie. Everything is
"semi" something. In the years when we were fighting politically, it was
easy to cement the relationships. Now that the struggle has been
annihilated, we don't have anything to cement us. Certainly our
semi-economy can't do it. Identity and culture depend largely on your
ability to produce and reproduce your self as a society, and that includes
running your own economy. On the other hand, if your economy is fueled and
run by external factors, this too will affect your identity and culture..
Our economy was shaped distorted, that is by a long period of
Occupation. Now it is being further distorted by Israel, the World Bank
and the donors. Our intellectuals, because they are working with this or
that NGO, are preaching the gospel of the peace process. Such people will
never be able to grasp what is going on in the global economy. The Arab
intellectuals outside are reading the map. They understand what Israel
wants. They are working to strengthen inter-Arab relations, so that the
Arab countries can resist Israel's attempt to divide them and join each
separately to itself. Here in the West Bank, though, I'm afraid our
intellectuals are working for normalization. We are lagging far behind our
Arab counterparts outside. As Palestinians we were thrown into a struggle
that made us the spearhead of the Arab world. We sometimes considered
ourselves superior to our neighbors with their dictatorships, because we
had adopted, we thought, the democratic rules that people play by in
Israel. But this was a lie. When the struggle subsided, we did not turn
out to be more democratic than others. As for being anti-imperialist,
today at least we are lagging behind them.

Q. What alternative economic course would you advise? What could a
responsible leadership do?

Samara: Let it be clear: No responsible leadership can operate within the
Oslo framework. The present regime cannot be reformed. It has to be
changed by a revolutionary leadership. That doesn't mean that we have to
stand idly by. We have to propose revolutionary socioeconomic
alternatives. I go back to the pattern we had during the intifada:
Development by Popular Protection. This is a form of economic organization
that poor farmers and working people can adopt. I am talking about
cooperatives and self-reliance projects independent of the regime. But
such a thing can only come about in tandem with a fundamental change in
our society, including the emergence of a new leadership.

* Roni Ben Efrat is the Editor of Challenge.


** CHALLENGE is a bimonthly journal which offers investigative reporting
and in-depth analysis of the Israeli-Palestinian conflict and the Oslo
process. Their website address is http://www.odaction.org/challenge/ To
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