[Part one of this series can be read at http://www.israelnn.com/article.php3?id=3370 and part two can be read at http://www.israelnn.com/article.php3?id=3375.]



In previous parts of this article, we have discussed the inevitable destruction of the moral fabric of the Palestinian Arab society of a potential Arab state in the West Bank and Gaza. However, the Arabs will endure not only the moral demise of their society, but they will suffer the misery of a collapsing doomed economy, as well. As this author has previously stressed, the issue of the economic viability of a future Palestinian state is even today never seriously addressed in the world political arena.



It is certainly impossible to discuss this topic comprehensively here; however, we will touch on some important aspects pertaining to the economic viability of a small state. Our task is significantly simplified due to a study conducted by Vladimir Gligorov, Professor of Economics at the Vienna Institute For International Economic Studies. Following the war in Yugoslavia, he prepared a paper on the economic viability of Kosovo, which he presented to the UNA-USA Conference on "Kosovo's Final Status", held in December, 1999.(12) We can use his methods to examine the economic viability of a Palestinian state in the West Bank and Gaza.



Gligorov lists several criteria of viability for a small state. He explains that the smaller the state, the more open it should be "both in terms of foreign trade regime and in terms of actual level of foreign trade." Another requirement pertains to the political system of the state: The smaller it is, the more democratic it must be. Discussing the third prerogative, Gligorov writes that "legality and rule-based policy should be conducive to the viability of a state." And the fourth condition lies in the self-government of the state: The more opportunities it offers to all its inhabitants, the more viable it becomes. If we simply consider the nature of Palestinian Authority governing institutions at the present, it is clear that any potential Palestinian Arab state cannot meet any of the above criteria.



What is more, as Gligorov explains, "?a state cannot be viable in the economic sense if it cannot provide for a decent level of employment. Indeed, it may be argued that smaller states, for a number of reasons, should have lower unemployment rates than bigger ones to be economically viable." Even from this perspective, the potential Palestinian Arab state will be stillborn, since by the end of 2002, unemployment among Palestinian Arabs in the West Bank and Gaza had already reached more than 40%, and over 60% of the population were below the poverty line of $2 a day.



It's also important to remember that employment among Palestinian Arabs completely depends on the jobs they can secure in Israel. Meanwhile, Ariel Sharon made clear in his December 18th, 2003, Herzliya speech that Israel is planning to substantially reduce the entrance of Palestinian Arabs from the West Bank and Gaza into Israel proper. Therefore, after the establishment of a Palestinian state, unemployment among Palestinian Arabs can only increase, and can easily be extrapolated: According to the UN's Information Center, "on curfew days [imposed by Israel], the non-Jerusalem West Bank unemployment rises as high as 63.3%."(13)



Lost employment opportunities for the Palestinian Arabs in the Jewish state, are not likely to be compensated for inside their surrogate state. This became clear during the last ten years of PLO dictatorship, which, in spite of huge monetary donations from various donors, was unable to build anything even remotely resembling an economic infrastructure. And this only underscores another of Gligorov's points, which is that "legality and rule-based policy" are necessary for a state even to successfully absorb economic assistance.



From this standpoint, the Palestinian pseudo-entity will not be "economically viable even in limited sense of the ability to absorb in the proper way the international and domestic efforts at reconstruction, because of the lack of legal and legitimate institutional infrastructure that cannot be substituted with either institutional or monetary aid."(12)



Nevertheless, for many years now, the international community has been pouring huge amounts of money into the PA's coffers, but that money has been disappearing with no positive impact on the lives of the Palestinian Arabs. At an average of almost $200 per person per year (compared to $68 per European annually under the four-year Marshall Plan), aid to the Palestinian Arabs in Judea, Samaria and Gaza represents one of the highest levels of per capita official development assistance anywhere in the world. Since 1993, the PA has received more than $6.5 billion in aid from international donors and at the end of December 2003, donor countries gathered in Rome in order to approve "another $1.2 billion to the Palestinian Authority for the 2004 budget."(14)



It appears that $1 billion is the amount needed yearly simply to prevent the complete collapse of the PA economy. This was confirmed by staffers at the UN and the World Bank, who estimated that if the international community pulls out, and Israel resumes financial responsibility for the Arabs of the West Bank and Gaza, "the basic maintenance, with no extra investment would cost at least $1 billion a year."(15)



This complete dependence on international monetary aid is one of the main signs of the non-viability of a state. According to Gligorov, a state is economically non-viable if international aid is used for people's everyday subsistence, for financing public services, for financing "the trade and current account deficits," and if "recovery of all economic activities? is yet to happen." One does not need a degree in economics to see that this is an exact description of the potential Palestinian Arab state. Moreover, as Gligorov explains, the barriers to reconstruction and recovery will be insurmountable, because this state will not be "an open economy, but an aid and subsistence economy," will be run in a "paternalistic manner," and self-government and public governance will be poor or non-existent.



Gligorov emphasizes several times in his work that for a small state "?to have a viable economy it has to satisfy at least two conditions: First, it has to be integrated with the economies in the region at least in terms of trade and financing. Second, it has to be a democracy, i.e., a system of popular sovereignty has to be put in place and institutionally secured."(12)



It is obvious that the potential "Palestinian state" will fail to satisfy either of these conditions. Even if by some miracle, it manages to develop the rudiments of an economy, its integration with other economies in the region will remain highly doubtful. According to the 2002 United Nations Development (UNDP) Report "?despite the many agreements signed between Arab states since the 1950s, inter-Arab trade counts for only around seven to ten percent of total Arab trade." To expect that the appearance of another impoverished Arab state will change the whole picture of relations between the Arab countries is completely unrealistic.



As for democracy, the story is even more obvious. There is no democracy in the Arab world. Period. To hope against hope that the surrogate Palestinian state, governed by terrorist gangs, will become a prototype for Arab democracy, is certainly self-delusion and wishful thinking of the highest degree. And all of this put together brings us to the unfortunate, but unavoidable, conclusion that a Palestinian state in Judea, Samaria and Gaza, will be a complete economic disaster.



This inevitable conclusion evokes very disturbing allusions. Perhaps quite unintentionally, the world community is planning to build an extermination camp for Palestinian Arabs under the cynical name "Palestine." It wants to cram a population of several million people, which exhibits one of the highest growth rates in the world, into two tiny disconnected parcels of land, thus achieving nearly the highest population density on the face of the earth. To settle them in nothing better than a reservation with no drinking water, no natural recourses, nor any hope for a better future for its inhabitants. To create an economically unviable surrogate entity, with millions of miserable people forced to live in utter poverty, goaded by their leaders into being "full of hatred and ready to die in suicide missions."



It is especially disturbing that the idea of establishing a Palestinian Arab state in the West Bank and Gaza is promoted by countless well-meaning people, who have the best intentions, but no understanding of the consequences the establishment of such a state will have. It will be the repetition of the famous legend of the Golem. This clay man was created out of river clay by Rabbi Loew in Prague, in the 16th century, so he would be a servant and guard for the poor and oppressed. But he became a menace to the very public that he was meant to protect and the Rabbi eventually had to unmake his creation, in order to prevent disaster. The Palestinian state in the West Bank and Gaza will become just such a Golem from which all the well-meaning people will recoil in horror, when they realize what they have created.



However, the inevitable disaster can be prevented. It is not necessary to condemn the Palestinian Arabs to a life in an extermination camp of the surrogate state in the West Bank and Gaza. There exists only one alternative, and it is enough ? separation. If civilized mankind really cares about the well-being of the Palestinian Arabs, it must first and foremost separate them from their leaders. In order to do that, it isn't necessary to reinvent the wheel.



There is a Palestinian Arab state called Jordan, which can accept many of those destined to perish if they end up being herded into an artificial reservation in the West Bank and Gaza. Freed from political correctness, any unbiased observer will admit that Jordan is destined to become "Palestine." Even a senior source within the Iraqi Governing Council said that "the absence of a hostile regime in Baghdad has reduced Israel's strategic dependence on the Hashemite kingdom as a buffer against Iraq," and he "predicted that Jordan would, sooner rather than later, become a Palestinian state."(16)



What is more, at the end of December 2003, Jordanian Prince El-Hassan bin Talal, uncle of Jordan's King Abdullah, said in an interview with the Italian newspaper La Stampa that "in his opinion Jordan must include all Palestinians" in order to resolve the Middle East conflict. Therefore, the only obstacle that stands on the road to saving the Palestinian Arabs from the manipulative anti-Israel schemes of their leaders is the world's indifference and an absence of common sense.



Instead of throwing billions of dollars to the wind by transferring money to the PA, these billions can be used for the organized relocation of Palestinian Arabs into Jordan. For instance, instead of wasting $1 billion each year to support the tottering PA economy, the money can be used to guarantee painless resettlement every year of 100,000 Palestinian Arabs in Jordan. Three quarters of this amount - $750 million - can be given to Jordan for development of housing, infrastructure, allocations for social services for the relocated people and other purposes. The remainder can be distributed among the 100,000 people to be relocated. This will come to $2,500 per person or $20,000 per family, assuming an average family size of eight. Since the average monthly salary in Jordan for a skilled worker is $275, and for an engineer, is $550,(17) this means that an average relocated family will receive seven times the yearly salary of a skilled worker or three times that of an engineer. This is simply unimaginable, compared with the $2 a day for the over 60% of Palestinian Arabs who live below the poverty line.



The money transferred in this way to Jordan will be extremely helpful to its economy, especially since Iraqi oil is no longer available to it at pre-war discounts. The CIA fact book says that "?the US-led war in Iraq in 2003 dealt an economic blow to Jordan, which was dependent on Iraq for discounted oil. It remains unclear how Jordan will finance energy imports in the absence of such a deal."



In one easy move, by taking the course of resettling the Palestinian Arabs in Jordan, the world community has a unique opportunity to save the lives of millions of these destitute people, resolve the Arab-Israeli conflict, and help Jordan's economy to overcome a looming economic disaster (caused by the disappearance of cheap Iraqi oil). The alternative is to condemn the Palestinian Arabs to destruction. The alternative is millions more victims of hunger, violence and misery, similar to what we see today in Zimbabwe, Congo and comparably failed projects. The alternative is murder and death.



[Part 3 of 3]



Footnotes

12) http://www.unausa.org/issues/kosovo/rome/

13) http://www.escwa.org.lb/information/press/un/2002/august/30.html

14) "Palestinian Aid Audit". By Rachel Ehrenfeld. Washington Times 12/13/03

15) "PA Collapse Would Leave at Least $1 Billion Annual Bill for Israel, Western Officials Warn". The Jewish Ledger. 12/25/03

16) "Iraq to weigh returning Jewish property". The Jerusalem Post 12/25/03

17) http://www.altajamouat.com/jordan11.php