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New Texts Out Now: Toufic Haddad, Palestine Ltd.: Neoliberalism and Nationalism in the Occupied Territory

Toufic Haddad, Palestine Ltd.: Neoliberalism and Nationalism in the Occupied Territory.  London: I.B. Tauris and Center for Palestine Studies, London Middle East Institute, 2016. 

Jadaliyya (J): What made you write this book?

Toufic Haddad (TH): I wrote this book because I wanted to research the profound transformations Western donor aid was having on Palestinian political and economic life across the 1967 Occupied Palestinian Territories (OPT) since the signing of the 1993 Oslo peace accords between Israel and the Palestine Liberation Organization (PLO).

Western donors have been central actors in the Israeli-Palestinian conflict, but their role is too often overlooked or reduced to the assumption that they are tertiary, benevolent, impartial or incapable of influencing the larger ‘deeply-rooted conflict.’ I found this approach to be misguided at best, and duplicitous at worst, as it absents questions of power, politics and interests from the equation.

Political economy is underutilized as an approach to studying the Palestinian-Israeli conflict, but it is helpful in explaining the political and social outcomes of policies, together with the interests and ideologies that shape them. By tracing the relationship between political and economic power and how these forces interact domestically and internationally over time, we gain a better sense of the structure and constitution of Palestinian social classes, and the inherent tensions and contradictions this arrangement embodies and generates.

By analyzing post-Oslo donor aid through a political economy lens, I felt I could contribute to contemporary political and academic debates in a manner that goes beyond the polemical tropes that a good deal of academic and political discourse surrounding Palestine is mired.

Critical scholarship of the peace process is not new and is best represented in late Palestinian scholar Edward Said’s description of Oslo as a monumental political surrender, akin to a ‘Palestinian Versailles’.  The legacy of this critique however has often led to a scholarship that too quickly dismisses or belittles what has happened since, because it is considered politically unviable as a basis for a just peace. Of course, what donors and Israel have been doing on the ground across the OPT cannot possibly lead to a just peace. But this didn’t need to be proven after Said. What did need to be proven was how the Oslo process and donor aid actively attempted to construct and legitimate a new political, economic and social reality within Palestinian society that institutionalized this unjust arrangement, and attempted to internalize it individually and collectively.

Tracing the mechanics of these unfolding dynamics entailed studying the micro, macro and meso-level changes the donor community was attempting to enact; what the theoretical bases to these interventions were, and how these policies translated into practices on the ground. Effectively, I needed to parse how the Palestinian case study integrated into larger developmental processes and aid-provision norms, specifically those adopted by the US and European Union (EU), together with international finance institutions (IFIs) like the World Bank and the International Monetary Fund (IMF). This meant that I needed to address the dominant ideological influences and political agendas of these actors, inevitably bringing me to study how the ideas and policies associated with neoliberalism permeated the conflict and the actors’ strategies vis-à-vis one another.

Readers may be surprised by the extent to which institutions like the World Bank and the IMF played key roles in the Israeli-Palestinian peace process from the very beginning. The World Bank for example cites its experience in the OPT as having been more central than in any other major post-conflict situation, contributing to the formulation of its own post-conflict reconstruction policy. The IMF also describes the reforms it implemented in the OPT as having been among the most far-reaching of those implemented in the Middle East and North Africa (MENA) – a formidable claim considering the extent of reforms the IMF oversaw in places like Tunisia and Egypt in the early 2000s.

All this speaks to a largely unrecognized role of these institutions in the OPT theatre, with the policies formulated therein not only acting as the intellectual compass for how Western donors operated, but also for how the policies devised in the OPT migrated to other global conflict and post-conflict theatres.

Gaining a better understanding of all of these dimensions allows for the Palestinian case study to be understood within a global context, regarding how neoliberal approaches to development, peacebuilding and statebuilding take shape. Indeed there is a great deal to learn here given that the OPT is not just a laboratory for military experimentation, but is also a laboratory of experimenting in social and economic policies, from which donor governments and Israel seek to harvest certain political and security outcomes. 

J: What particular topics, issues, and literatures does the book address?

TH: The book is historically structured, tracing the context that gave birth to the Oslo process, and follows the complex unfolding of dynamics between all actors from 1993 to 2013. Emphasis is placed on tracing ideational and institutional aspects of how neoliberal ideologies permeate the political and economic dynamics of Western donors, Israel and the Palestinian leadership - how these converged and diverged, and to what effect.

A key part of constructing this narrative entailed mining the mountain of documents produced by the donor community, which have largely gone unread. But this paper trail is important because it is the official transcript of what these actors engaged in and why. It became all the more important in light of my ability to crosscheck this official transcript with various datasets, together with classified or formerly classified documents and archives that had become accessible during my research. These included the Wikileaks exposing US embassy and consulate cables from Tel Aviv, Jerusalem and regionally, as well as the ‘Palestine papers’, which revealed the internal transcripts of the Palestinian negotiators. More important than these sets of documents however were formerly classified documents from the archives of the World Bank as well as USAID. These documents gave me the ability to be more confident in my conclusions, as opposed to merely descriptive. They enabled me to point to specific cases where there were clear contradictions between the official transcript and the internal narrative, allowing me to make further conclusions around the existence of hidden agendas and degrees of premeditation and planning of the outcomes of the process.

When many of the outcomes of the Oslo process can be evidentially linked to various disclosed and undisclosed policies, plans and foreknowledge of key donor states; and when the outcomes themselves are so destructive to include the economic, political and social costs of failing to reach a peace agreement; the entrenchment of the occupation and apartheid; the conflagration and institutionalization of the political divide between Hamas and Fateh; and the slow re-emergence of Jordanian suzerainty over the West Bank - it would seem appropriate to not only question the impartiality of these actors as conflict brokers or resolvers, but instead to interrogate their culpability as conflict abettors or constitutors.

As to literatures that the book addresses, in addition to the scholarship on Palestine and Middle East Studies, this book directly relates to the fields of Development studies, Peace and Conflict studies, and specific case studies of political economy and the history of neoliberalism within the Middle East and North Africa region.

Here, a short word is in order regarding the state of some of these academic literature sets. The Palestinian case study is a particularly egregious example of failed peace making, failed development, and failed statebuilding. Remarkably however, there is a good deal of academic silence around these matters, especially from some of the larger names in the scholarly field. This silence is particularly conspicuous in so far as there is no shortage of studies in critical development studies and peace and conflict studies that heavily critique the role of IFIs and the Western donor community in regards to peacebuilding and statebuilding practices in places like the former Yugoslavia, East Timor, Afghanistan and elsewhere. But the Palestine case study is too often absented from these literature sets, leaving the bulk of scholarship to be dominated by normative accounts that uphold the very frameworks that lead to Palestinian subjugation. While the reasons for this are many, I also don’t think we can exclude that many critical scholars who work on development, peacebuilding and statebuilding, would rather avoid the Israel-Palestinian context because it is politically charged, while it is also not uncommon to pay a professional price for doing so.

The irony here is that the Palestinian theatre represents one of the most advanced sites in the world where the instrumentalization of peacebuilding, statebuilding, development and humanitarian aid takes place by Western donors. This is because not only is it a site where Western powers are heavily invested and active due to their own geopolitical interests, but also because Israel’s control over Palestinians across Palestine, at least militarily and institutionally, is both ‘cutting-edge’ and irreproducible in other contexts. Hence the better we know what trends develop in the OPT and Palestine more broadly, the more we will understand the evolving nature of global technologies of discipline and control – be these military, economic or social.

J: How does this book connect to and/or depart from your previous work?

TH: This work is the continuity of my former work, which was largely based on providing critical political analysis on developments in the Israeli-Palestinian conflict. It is an attempt to elaborate on a specific period in the history of this conflict’s dynamics, which I have worked on much of my professional career, attempting to clarify and foreground overlooked but critical dimensions related to the institutional, financial and discursive technologies used in the OPT, instead of just the military ones. It also attempts to address poorly understood intra-Palestinian class and political dynamics, which are in need of more nuanced explanations. Without these dimensions incorporated into the overarching political analyses of academics and political actors, efforts to construct an alternative analysis, and indeed movement, will remain hamstrung. This book is thus an effort to reframe analysis of the conflict by returning readers to its political economic roots, doing so in a manner that could not be undertaken when the format of my previous writings restricted deeper elaboration.

J: Who do you hope will read this book, and what sort of impact would you like it to have?

TH: This book is written with many audiences in mind and walks a delicate line that attempts to be insightful, useful and accessible to all. It is first and foremost a work of academic research, because without scholastic rigor, it is difficult to make a strong case around the things you claim. Making an impact in the academic sphere is important for reasons that are obvious, given the privileged stature ‘expertise’ and research are accorded in our day and age. Sound research makes it more difficult to evade glaring political, policy and moral contradictions, though without political mobilization and organization these critiques can still be ignored. Ultimately of course, I hope this book’s impact will not only influence development studies, peace and conflict studies, and Middle East/Palestine-Israel studies, but go beyond the walls of the academy into the political and policy realm more broadly.

Besides the academic sphere, this book is also directed at a broader layer of intellectuals and engaged social and political actors. While I am interested in engaging politicos who identify with the Palestinian struggle, I am equally interested to speak to those who don’t know enough about the Palestinian context, but who can understand what I am saying because it relates to broader dynamics associated with international relations, political economy and the history and dynamics of social and political movements. 

I also thought it was important to produce an engaged scholarly resource for understanding the Palestinian case study of neoliberalism, linking micro-level dynamics with macro-level processes and agendas. This was important because while neoliberal policies have come under increasing criticism in recent years due to the disastrous results they have had on Western economies, there is very little attention to how these policies have impacted the Middle East. Equally important is coming to understand how neoliberal policies have been instrumentalized for the purpose of conflict resolution, although its track record here is equally poor.

J: What other projects are you working on now?

TH: For the past year I have been working on a related subject to these dynamics, researching the political economy of siege and resilience in the Gaza Strip. My work has been sponsored by the Arab Council for Social Sciences in Beirut in the form of a postdoctoral fellowship, and I aim to ultimately produce a compendium volume to Palestine Ltd. that looks at what happened in the Gaza Strip, particularly after 2006.  The story of what happened in Gaza is the story of what emerged in the shadow of neoliberal peacebuilding, development and statebuilding, where the contradictions to these processes were most concentrated and pronounced. Understanding the governance strategies of the Hamas government; how social relations transformed from Fateh to Hamas control, and; how Israeli military aggression and international reconstruction processes attempted to remold Gaza’s political economy, all shed light on the similarities and differences generated by the broader macro-level dynamics. I hope this work can thus be helpful to better understanding the Gaza context, beyond tired depictions framing it as a site of humanitarian catastrophe and political radicalism.

Excerpt from the Introduction:  

[…] Both ‘peacebuilding’ and ‘statebuilding’ appear self-evident practices insofar as opposition to them can be framed as opposing peace or the right to statehood and self-determination. The problem with such framings is that both peace and statebuilding are highly charged political undertakings that do not derive from a platonic template.

The OPT has a deep and complex history to its national actors and political institutions. Western governments and IFIs that work to advance peacebuilding and statebuilding are also implicated in ideological, political and economic projects of their own on a global scale, which they are not disembodied from as they intervene in the OPT. They also have independent and complicated relations with Israel, which harbors interests and agendas of its own towards the OPT, irrespective of PNA or donor interests.

Despite this complexity, certain consistencies in approach can be detected in these interventions since 1993, as captured in the 2006 public remarks of Nigel Roberts, former World Bank Country Director to the OPT from 2001 – 05:

A strong Palestinian economy delivering growth, and above all jobs, is a vital part of any beneficial political process [. . .] Whereas I think that one cannot say that economic growth and economic vitality are of themselves enough to produce a benign political process, one can, however, I think say the opposite, which is that economic desperation, high unemployment, high poverty levels, and a lack of economic dynamism are certainly a fairly good guarantee for social instability and a lack of resolution to these deep-set political issues. In other words, Palestinian economic vitality is a vital component of any peace process. (Roberts, 2006)

Throughout their engagement in the OPT, Western governments and IFIs have consistently upheld and embraced Roberts’ basic contentions, pouring financial and technical resources towards this end. These agents have refrained from engaging in the prickly terrain of political peacemaking, opting instead to focus on improving Palestinian economic wellbeing deemed ‘vital’ and complimentary to a successful peace process. In what ways is this economic vitality ‘vital’, and to what effect – Roberts and the broader agenda he represents are less forthcoming. But the appeal of their logic rests in its seemingly common sense reasoning that economic development acts as a form of conflict prevention. As the World Bank writes, ‘war retards development, but conversely, development retards war’ (Collier et al., 2003, p. 1). Economic prosperity is believed to reduce the willingness of people to fight, helps mitigate the prospect for conflicts arising, perpetuating or worsening, and can actively contribute to conflicting parties resolving differences peacefully.

From this rhetorical commonplace and panglossian worldview, a series of conclusions and policy recommendations necessarily flows: donor interventions should enhance the possibility for economic development, facilitate private sector-led growth and employment generation, and work to raise GDP, thereby unleashing a peaceful impetus and goodwill that can be absorbed and channeled into the Middle East peace process. If these dynamics can be harnessed as part of a wider regional push to liberalize markets and trade, reduce state involvement in economies and attract foreign investment, a ‘virtuous circle scenario’ could emerge between the Arab states and Israel, with Palestinian – Israeli peace at its heart (Fischer, 1993, p. 4).

An ideological thread within this rhetorical commonplace is thus revealed. Donors appeared to be advocating the implementation of some of the core neoliberal policy tenets as tools to defuse violent conflict. ‘Freemarket’ economics was deemed instrumental to lubricating Israeli – Palestinian peace, with vital Western geopolitical and geostrategic interests also served, considering how this conflict acts as such an extreme source of political tension radiating across the entire region so vital to US hegemony.

This book will interrogate these claims theoretically and empirically, attempting to see whether there is a basis to them.

What are the contours of neoliberal conflict resolution and statebuilding in the OPT as it emerged in the development policies of Western donor governments and IFIs from 1993 to 2013? How did Palestinian society – its political and economic elites, and various social classes – negotiate these neoliberal interventions as they unfolded across the OPT? To what extent has neoliberal conflict resolution and statebuilding been successful in inducing the forms of political, economic and social transformation that its designers intend amongst targeted Palestinian constituencies? Can peaceful outcomes amongst Palestinian political and economic elites and social classes be generated through economic incentives and the promise or realization of economic prosperity? What is the extent of these transformations if any? How can they be characterized? What can be said about factors that induce or impede their ability to exhibit forms of traction and resilience, and why?

Answering these questions is long overdue, as the core approaches of neoliberal peacebuilding and statebuilding continue to frame and reproduce donor intervention across the OPT and beyond – with devastating effect, and without accountability for their actions.

Ultimately this research argues that the confluence of divergent and overlapping neoliberal approaches within the political and economic agendas of the main actors resulted – by design or by default – in a scenario that can be described as ‘Palestine Limited’ or simply ‘Palestine Ltd.’

The term Palestine Ltd. has dual signification:

The first connotes how a delimited version of a Palestinian state, located on only parts of the OPT and with highly restricted political and economic powers, came to be understood as ‘Palestine’ – a de facto state nominally entitled to the benefits of this classification within the logic of international intrastate norms. This new ‘Palestine’ redefines the historical boundaries of mandatory Palestine, and even the borders of the OPT. Its inchoate formation through the accumulated confluence of donor interventions, ironically functions in a manner that significantly deprives the Palestinian national liberation movement from having a say in the character of the entity being created supposedly on their behalf and where this entity will govern. It is almost as though the generations of sacrifice of the national liberation movement which struggled to realize ‘Palestine’ – ‘from the river to the sea’ as a homeland for the dispersed Palestinian people – has now been realized but in a transmogrified form. Palestine Ltd. becomes neoliberalism’s Janus-faced version of the former Palestine, emptied of any emancipatory liberationist content, and replaced with the economic and political strictures which enforce and deepen the state of oppression and fragmentation which Palestinians sought to overcome in the first place through their national liberation movement. 

The second connotation of Palestine Ltd. relates to the institutional composition of this delimited version of Palestine, as imagined by those who embrace and propagate it. Palestine Ltd. can loosely be described as the operational endgame of Western donor development/peacebuilding/statebuilding interventions, with this entity functioning as a variant of a limited shareholding company (Ltd.) with international, regional and local investors of one type or another. While the dividend to this investment includes direct and indirect financial gains for many of its shareholders, the primary motivation of this arrangement derives from the need to reap particular political, administrative and security returns for its ‘investors’. This reality emerged as a consequence of the larger political logic of these players in so far as how they prioritized achieving their ideological, political and economic agendas, within existent restrains and power asymmetries.

From the onset it is important to clarify that Palestine Ltd. is admittedly an oversimplified metaphor that fails to capture the full nuance of the actors, their motivations and how this reality came about. This study will attempt to flesh these aspects out in due course, so as to better understand the wider set of historical and political economic characteristics that permitted the birth of Palestine Ltd. in the first place – rhetorically, institutionally, politically, economically and socially. Readers will then be free to determine if the term deserves relevance and currency.

[Excerpted from Palestine Ltd.: Neoliberalism and Nationalism in the Occupied Territory, with permission of the author, (c) 2016.]

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Population (2016 est.): 80,274,604
Government: Republican Parliamentary Democracy
Year of independence: 1923
GDP: $856.8 billion (2016 est.); $1.698 trillion (2016 est., purchasing power parity)
Unemployment: 10.9% (2016 est.); Youth Unemployment (ages 15-24): 24.5% (est. Jan 2017)
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