Sunday, January 6, 2008

Dictatorship Of The Bourgeoisie, Please

“On average, donors annually injected $350-450 million into the Palestinian Authority from 1994-2000,” my friend, the Ramallah entrepreneur and consultant Sam Bahour, lamented to me; “from 2001-2007, about $650 million annually; this amounts to over $7 billion, more per capita than anyplace in the world except for Israel, which is heavily subsidized by the U.S. Yet of those funds, less than 5% were invested in the development of the private sector. This underinvestment in businesses is a disaster.”

If you think these are the sour grapes of a Palestinian capitalist, feeling cut out of a feeding frenzy, you don’t know Sam or Palestine. An MBA raised in Youngstown Ohio, the scion of a grocery business, Sam came to Ramallah in the early nineties to build a country (though the Israeli government has, perversely, made it hard for American-Palestinian professionals like him to get permanent visas).
It is fine and well to talk about a secular national movement, Sam understood, but what this ultimately means is Palestinian contractors, software engineers, etc. who'll be using their freshly printed passports to get out and compete in the world; Palestinians who have the technological and management know-how to make things regional—even global—customers really want, while providing rewarding jobs for youth who would otherwise seek solidarity in gangs and meaning in noble deaths.
“Everywhere you go in Palestine you see pictures of martyrs,” he told me, driving me past a large poster in a square, commemorating the deaths of two youths killed by stray IDF fire; “The pictures of the Israeli army’s innocent victims merge into pictures of suicide bombers and real insurgents, looking sincere and ready for sacrifice. This kind of thing works on our young people. We are surrounded by a kind of big, morbid memorial. We have got to create another reality fast.”
THE REALITY SAM created is a shopping center, the first in Palestine with an genuine supermarket called (fittingly) “Bravo” serving as its anchor store; a center complete with an Italian restaurant and play-jungle upstairs where kids can go to climb, burrow, play fussball or video-games, while their parents shop for food. “There was an initial idea that we would charge admission to the play area, but I said ‘no way.’ These kids are lining up at road blocks all the time. Could you imagine a line of kids waiting to get into the slides and jungle-gyms?”
Security is provided by an independent force, to preclude any discomfort some would feel if this or that militia showed itself. The supermarket, only a couple of years old, is starting to turn a profit. The shopping center has prompted construction of another one across the street (“It took away our ‘Colors of Benetton’ store—fine with me...”), and directly across the street a new ten-story office tower is rising. (“There was supposed to be a limit of three stories, according to municipal regulations, but somebody got Arafat's approval,” Sam winked.)
“BRAVO” STRIKES THE eye as an unremarkable supermarket, which is precisely what makes it remarkable, particularly coming off the helter-skelter streets of Ramallah. The floors and shelves are organized and immaculate; the bar-codes are neatly lined up on products from everywhere, including Israel (“how could we not offer Israeli products, when our economies are entwined?”), but emphatically not from Jewish settlements across the Green Line. What doesn’t meet the eye is even more significant, for it is a microcosm of the entrepreneurial efficiencies, pragmatism, and cooperative groundwork that makes the peace process less abstract for Palestinians and Israelis both.
“The point-of-sale system here is Retalix, the Herzliya solutions company,” Sam told me, recalling the days when he was CEO of Bravo. “I told my board, I can go to Houston, look at the price-performance specifications of all the systems, and buy a more expensive Retalix product in the form of their American version. Or I could go to Herzliya and get a better deal, save the time and airfare, and get them involved in helping their neighbors become world class. My board went along. They made the right decision.”
For Sam, doing things well at these subtle levels will amount to a Palestinian counterlife, the alternative to a bureaucracy by turns starved or bloated by donors, or PA officials whose legendary corruption fuels Hamas’s rise. He is creating the DNA of a Palestinian national home. He's even persuaded one of Palestine's first banks, Arab Islamic Bank, to begin making business loans based on the strength of business plans, not only on collateral.
WHAT’S WRONG WITH this picture? In a nutshell, for DNA to propagate itself, cells need to divide, clone, connect and be nourished. Bravo cannot, and this is the disaster. The systems underlying the success of Bravo are really meant for a chain, you see. A whole network of Bravo stores would help revolutionize Palestinian merchandising, prompting copycat retail clothing and other chains; it could provide a natural channel for new food processing companies, which might go head-to-head with Israeli companies across Israel, Palestine, and Jordan. It could stimulate the creation of shopping centers in every Palestinian city, anchoring new construction projects that would define neighborhoods, preparing the ground for new housing stock—something you already see a huge demand for in Ramallah, which is developing quickly but in a less coherent way.
The problem is that no matter how good your inventory systems, they are pretty much worthless unless your suppliers can restock your stores in a predictable way. Supermarkets are really the hub of a complex system of logistics: the transportation infrastructure must be reliable, geographies must be convenient to one another, deliveries must be timely. This is exactly what Palestine lacks owing to the occupation. The most terrible cost of occupation is what businesspeople call opportunity cost.
THE BURDEN OF 540 checkpoints across the territories is not simply that individuals cannot get a spouse or child to a hospital, or that you cannot know if getting to the wedding of a cousin will take you 40 minutes or four hours. These are disgusting things, but they do not cripple a whole nation. The problem of so many checkpoints is that it makes things virtually impossible for the Palestinian middle class to build businesses, which create hope, which creates businesses, which create a secular civil society.
Bravo could be 40 stores. It has only three, two in Ramallah, one in Hebron. Investors, reasonably, hesitate to fund its expansion. This is a source of frustration for Sam, for he knows that in part he must deal with the inertia of a business class that has a very local and conservative mentality. But most of all he knows that they must deal with the occupation.
How do you convince investors to expand a grocery business when you cannot assure that produce will not rot on a truck, stranded at one of five checkpoints, along the road from Ramallah to Nablus? How can you believe in the future of cooperation when the reason for the checkpoint is not the fear of a suicide bomber in Tel-Aviv, but the protection of Jewish settlers on hills between Ramallah and Nablus? Worst of all, perhaps, how can you believe in peace, which will mean the return of millions of refugees, when the Israeli government continues to ring Jerusalem with Jewish neighborhoods, as if Hebron and Ramallah were not, in effect, suburbs of a future East Jerusalem metropole?
I don’t mean to underestimate the risks. Checkpoints are a network of their own, aiming at controlling a dangerous situation—a network of informers and inspections, which has grown over the years in a cycle of revenge (see my previous post from December 28). It is very hard to let go of the tiger’s tail; just last week, tons of material that could be used for explosives were uncovered by the PA.
Nor does Sam underestimate the dangers. He is far more vulnerable to radicals and killers than Israelis are, there on the other side of the wall. With poverty all around, it is easy to imagine Hamas militants carping at the dictatorship of the bourgeoisie; imagine that they’ll depict Bravo’s profits as a kind of theft from the hungry, depict Bravo’s organized way of making profit as a kind of corrupt materialism that must be countered by Islamist humility. But Sam, tooling around in his beaten up Hyundai, is willing to face the dangers. He knows that hopelessness is fueling the fanaticism much more than the other way around.
ISRAELIS AND AMERICANS do not seem to realize, Khalil Shikaki told me later, that the rise of Hamas can be directly traced to the compounded misery created by things like the internal checkpoints. The wall is a disgrace, but shouldn’t this be enough to give Israelis the sense of security that they need? “We get a lot of talk about improving things on the ground, but not one checkpoint has been removed. Olmert and Barak talk about security, or even coalition politics. These are very shortsighted considerations. We are seeing the imminent end of a secular national Palestinian movement. We have to see a dramatic improvement in people's lives this year, not somewhere on the horizon. If not, people like me will go plant gardens.”


Shelly Schreter said...

Bernie, you don't mean to underestimate the risks which are the checkpoints' entire raison d'etre - you are far too aware and intelligent to just ignore terrorism - but ultimately you do fall into the reversal of cause and effect. Your clear implication is that if only Israel would relax on the checkpoints, and roll back the bloody occupation, then the Sam Bahours of this world (he seems a wonderful guy, no argument about that) and their entrepreneurial alternatives for Palestinian hopelessness could prevail.

In itself, the proposition is undeniable, rational, logical. But all those characteristics are profoundly irrelevant to the situation on the ground. Palestinian fanaticism, denial and terrorism are the issue, and they are Sam Bahour's enemy just as much as they are ours. Abu Mazen hasn't got the ability (the will?) to take them on for real, so what the hell is Israel supposed to do? Wait passively for the suicide bombers in our city centres? Been there, done that.

It is clearer than ever that the real target of the Kassam missiles is not so much Sderot (and soon, Ashkelon and beyond, with Egyptian-facilitated ordinance) as it is any hope of moving forward in dismantling the occupation and advancing the peace process, such as it is. They know perfectly well that those Kassams make anyone advocating withdrawal from the West Bank sound like a real idiot, with suicidal inclinations. Is it so difficult to imagine those same Kassams, then Katyushas, then mortars and conventional artillery, raining down on Jerusalem, Tel Aviv, BG airport, etc.? And that's precisely their objective.

These guys are in their way real dialectical practitioners, resembling the old Trotskyist mentality. First you have to sharpen all the contradictions and radicalize - "revolutionize" - the situation as much as possible. Only when it is much, much worse can you finally make it better via revolution. They're not in despair, Bernie, they're intoxicated with the vision of apocalypse, in their case, enhanced with the link to global Islamic jihad. So, continue to pinprick the Zionist monster, goad him into increasingly bloody retaliation, grind your own people into ever-deepening misery and death-cult consciousness, and that's how we reverse the Naqba and take Tel Aviv.

I don't know what to do about it, but neither do you. Sadly, tragically, Sam Bahour, Sari Nusseibeh and their kind are impotent. On our side, the best chance seems to be to focus on taking on the settlements (which is why I wrote that article). Bush seems to have a similar idea. Olmert's political vulnerability makes that a hard path as well, but a few dozen removed settlements would certainly make Abu Mazen look better. A big prisoner exchange which brought our soldiers home and returned Marwan Barghouti (is he ready to do a Mandela?) to the system might help, too. (Why would Hamas and Hizbullah co-operate with rather than sabotage that?) I wish I knew whether all this would make a difference. But you have to keep trying, otherwise we're dead.

Be well, Shelly

bar_kochba132 said...

Shelly, you make some good points but you fall victim to some of the usual fallacies of the so-called "Peace Camp"...
(1) you say "a few dozen removed settlements would certainly make Abu Mazen look better"...wait, wasn't this the idea of destroying Gush Katif? It didn't then work out the way you thought then, and it won't work out the next time either. Strengthening the settlements is the ONLY way peace will ever come because by doing that, you are showing the Arabs that Israel is serious and here to stay. By expelling Jews from Judea/Samaria, you then convince the Arabs that more pressure will drive them away from Sederot and Ashqelon (as is unfortunately happening), and after that Tel Aviv will go.
(2) "Releasing Barghout might help". He is convicted of 5 counts (IIRC) of first-degree murder. Mandela never murdered anyone, as far as I know. I recall Yossi Sarid dismisses this concern by saying "there aren't any saints around here". If that is so, then I say release Yigal Amir as well. Those few who like him will appreciate the move...after all, he was supposedly motivated by the same ideals as of his people, patriotism, desire to change things, etc. After all, if you are going to practive moral relativism, you have to be willing to go all the way. Unless, of course, you believe in a thing called "justice".

bar_kochba132 said...

Bernie-thanks for the interesting posting. It is noteworthy that only 5% of the international aid received by the Palestinians was used for developing the private sector. The question is-if it so obvious that encouraging this sector so that the Palestinians can create a consumer society that will want peace, why was this not done? Maybe it is because the ruling authorities don't want this.
I don't know anything about economics or business but what I see around the Arab world is that in all their countries, the regimes in power are all authoritarian and the economies are all controlled by certain families who are all well-connected to the regime. Of course, the Arabs have a long entrepeneurial and commerial culture which is already seen in the Bible, but with the development of the modern, authoritarian Arab states in the post-Colonial era, this has stagnated. Even Lebanon, which was the most bustling business center in the Arab world before the Civil War started in 1975 ended up being destroyed. Syria was very much like that but has degenerated into a stagnant, socialist-like state. Part of the problem, as I see it, is that development of a private sector threatens the ruling cliques in these countries. We all know that the revolutionaries who set off the American and French Revolutions were middle class business people who chafed at the restrictions imposed on them by what they viewed as anti-democratic regimes. You yourself point out that your businessman friend Sam is viewed with hostility by many sectors of Palestinian society. I think the these authoritarian regimes view it as prefarable that their population remain poor and dependent on governmental hand-outs than to encourage a free-market culture that will demand changes in governmental policy and maybe even democratization of the regime.
I think it is also open to question whether the thesis that creation of a consumer society in the Palestinian territories (as unlikely as that seems) would really bring about a demand for peace with Israel. After all, we see that Islamic extremism is thriving in the countries where the population does have a good standard of living, such as in Saudi Arabia , Kuwait and the Gulf States. A recent article in the New York Times about the Al-Qaida cells in the Maghreb (western North Africa) showed many of its terrorists, including suicide bombers, came from middle class backgrounds. And of course there was the fact the 15 of the 19 hijackers on 9/11 came from prosperous Saudi Arabia. Al-Qaida Osama Bin-Laden is a very wealthy man, a multi-millionaire. Thus, we see that terrorism and extremism are not necessarily the product of "poverty", as old Labor Zionists with their residual Marxist mentality seem to believe.
The problem of Arab hostility to Israel transends economic considerations. It is more important to look at the Islamic identity of these societies and how they grapple with the fact that a dhimmi people (the Jews) who are supposed to in a state of subjugation are now able to maintain a prosperous state in a part of the world the Muslims believes belongs exclusively to them.

Ann said...

Thank you for this piece. If I may address some of what both previous commenters have written.

bar_kochba132 said...
It is more important to look at the Islamic identity of these societies and how they grapple with the fact that a dhimmi people (the Jews) who are supposed to in a state of subjugation are now able to maintain a prosperous state in a part of the world the Muslims believes belongs exclusively to them.

This grossly caricaturises what Muslims feel toward Israel, and certainly no blanket generalisations can be made in any case. I never met a Muslim who really believed that "the Jews" are "supposed to live in a state of subjugation" and this seems rather anachronistic. Nor do all Muslims believe that the Holy Lands belongs exclusively to them, Jerusalem and Bethlehem have long been multifaith centres and accepted as such, by all but Israel it seems. As for maintaining a prosperous state, this is not done without massive amounts of US aid and documented theft of water and fertile topsoil from its neighbours, as well as the continued theft of private Palestinian land, again well documented.

But the real zinger in your otherwise near-reasonable comments, in my estimation, is that "(s)trengthening the settlements is the ONLY way peace will ever come because by doing that, you are showing the Arabs that Israel is serious and here to stay." This kind of dangerously faulty logic is what sustains this conflict. Stealing more land and maintaining and building more illegal settlements will show them Palestinians we're here to stay?! Good G-d, that is a recipe for disaster and goes against every good faith gesture principle, let alone justice. Most groups--Palestinian groups, Arab states, international mediators, the Saudi Peace Plan-- accept the existence of Israel based on 1967 borders and would that Israel would finally declare its borders come to that, like any state.

The Palestinian movements have historically been quite secular apart from the rise of Hamas, so I really find the scare-mongering claim that these groups desire Armegeddon and that they are "intoxicated with the vision of apocalypse" wholly unconvincing.

I think we have far more to fear from Christian Zionist dispensationalists than powerless Palestinian groups who simply want their homeland. Global Islam Jihad again subscribes to some uniform movement that somehow subsumes disparate Middle Eastern groups and the Sunni-Shia divide.

terrorism and extremism are not necessarily the product of "poverty"

I agree and propose a alternative: they are more the product of injustice. As for Osama Bin Laden and Al-CIA-duh, I think they are American intelligence patsies and known CIA assets but that's not as relevant here.

We recall that Russian revolutionaries were also mostly middle class (and Jewish too for that matter, as you know). They were also motivated not by being in a state of poverty themselves but by perceived injustice.

Shelly, I think projecting a Trotskyite 'permanent revolution' tint on things is also wholly misguided. If groups such as Hamas were really interested in merely pricking the zionist monster to provoke retaliation, they would not have offered just recently a ceasefire, nor maintained a recent 15 month hudna.

I appreciate the fact that you have recognised that "the Arabs have a long entrepeneurial and commercial culture". War tends to destroy commerce, and Israel's stated aim of setting Lebanon back 40 years in the 2006 war after it was just beginning to bloom again was a premeditated and expressly stated deliberate policy to destroy a country's civilian infrastructure -- commerce didn't just die, it was wilfully killed.

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