Just Blame Israel - the World Bank Does

If the PA can place the responsibility for its abject economic failure on Israel, it has no incentive to change.

Dr. Philip Brodie

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The World Bank’s latest Report on the Palestinian Authority (PA) is entitled, ‘West Bank and Gaza Area C and the Future of the Palestinian economy’, (report AUS2922, October 2, 2013).

With this Report, the World Bank ignores the central issues that threaten to torpedo the PA’s economic viability. Instead, it chooses to support the war against Israel.

David Singer writes that this Report reveals how PLO decision-making has been disastrous for the PA (“Op-ed: World Bank exposes PLO’s disastrous miscalculations,” Arutz Sheva, October 15, 2013). But while Mr Singer is absolutely correct to criticize PA decision-making, the main focus—and the conclusion—of this Report is to blame Israel for that disaster.

The Report discusses economic problems and opportunities for a place called Area C of the 'West Bank', which makes up 61 per cent of' West Bank' geography—the area we call Judea-Samaria, in which only 4% of Palestinian Arabs live and all the Jewish communities have been built.

Area C is known for three reasons: (1) It fell into Israel’s hands in the defensive 1967 six-day war—after Jordan attacked Israel; (2) in response to Arab attacks against Jews, Israel’s military maintains restrictions on Arabs in Area C; and (3) Arabs claim Area C belongs to them as well as Areas A and B.

The Report blames Israel for the PA’s economic woes. It asserts that Area C is the key to saving PA’s economy. As if to illustrate this assertion, the Report presents an assumption: if Israeli restrictions there were lifted, economic activity in Area C would add 35 per cent to PA GDP (a World Bank press release even suggests that lifting Israeli restrictions in Area C determines if the PA can survive).

The World Bank sees agriculture in Area C taking stage-center for PA economic prosperity. But their Report veers from objectivity to propaganda when it blames Israel for the Area’s farm-productivity and water problems.

In the Middle East, water is a life-or-death issue. Israel has developed solutions to its water problems. The PA has not and refuses Israeli solutions. In fact, in areas A and B controlled by the PA, reports circulate that up to half of all water used in the PA is classified as UFW—unaccounted-for water. That means that up to half the water ‘disappears’.

Israel is not responsible for this ‘disappearance’ because the problem is associated with Arabs primarily inside PA-controlled land. Nevertheless, the World Bank ignores UFW. It blames Israel for Area C water shortage.

That’s absurd. In the Arab world, stealing water is epidemic. Thomas Friedman has exposed this. While he writes of Syria and Yemen (and not Area C), he demonstrates that the reason for serious Middle East water problems is not Israel, but incompetent and corrupt officials who, while tasked with preventing illegal wells from being dug, are themselves digging wells in their own back yards.

Illegal wells plague the PA (and Gaza). It’s called Palestinian water piracy. It affects water availability for commerce, agriculture and residents.  The World Bank Report does not highlight the role water piracy plays in Arab economic and agriculture problems in Areas A, B and C. It simply blames Israel.

The World Bank wants us to believe that the only thing that keeps the PA from economic success is Israeli restriction. This is patently absurd. The PA has never proven itself capable of developing a successful economy.

What the PA is capable of, however, is corruption. A recent European Union report suggests that much of 1.95 billion Euros transferred to the PA between 2008 and 2013 has been ‘misappropriated’. Monies desperately needed to keep the PA’s sinking economy afloat have either disappeared or been misused. The large number of PA government workers is one of the main factors stifling productivity and siphoning off funds earmarked for development.

Apparently, the Bank does not believe that massive Arab corruption (and the incompetence that corruption breeds) causes problems for the PA’s economy.  It prefers to blame Israel.

To bolster its case that Arab agriculture in Area C can be successful, the Report highlights Israeli agriculture successes. But it is fantasy—not economics--to assume that if Jews farm successfully on a large scale, as they have in all of Israel, so would Arabs.

There is already Arab agriculture in Area C and not that much Jewish agriculture. But between 1995-2011, Arab farm productivity in Area C plummeted. The fundamental problem causing that drop is not Israel. It’s Arab corruption, stolen water and a history of not addressing difficult problems with resources already available.

If the World Bank wants to foster Arab prosperity, it cannot ignore Arab actions that hurt the PA’s economic potential. It cannot make unrealistic assumptions about Authority competence. It certainly cannot ignore cultural and communal problems that hold back Arab self-development: corruption, a pathological hatred of Jews that fosters violence instead of cooperation and a beggar mentality that promotes a sense of entitlement instead of ‘let’s work’.

For example, just weeks before the Report, Arabs forced an Israeli company to cancel a proposed economic opportunity—and jobs--for Arabs in Ramallah. Forget a 22 per cent PA unemployment rate: there will be no ‘normalization‘ with Israel!

This Report ignores Arab responsibility for their own problems. Instead, it claims states that, ”The key to Palestinian prosperity continues to lie in the removal of” Israeli restrictions in Area C [emphasis mine].

In the face of Arab corruption, Jew-hate, incompetence and piracy, the World Bank blames Israel for PA troubles?