Tuesday, 22 December 2009

Transcript of Interview with Dr. Adel Zagha, at Birzeit University

Hi All,
Below is an (unedited) transcript of an interview with Dr. Adel Zagha at Birzeit University in Ramallah, part of a piece I am doing on trade and development in the oPt.

1. Does the PA have a coherent vision for economic development in the Palestinian territories? How does it compare with that of Hamas?

The PA has developed plans for economic development of medium term nature. The PA had done so many times. My own reading of these plans is that they were drawn in hassling manner with the purpose of soliciting funding from the donor community. I myself do not believe in development under occupation (being it explicit or under the veil). When the nation has no control over its territorial borders; no contiguity among its regions; with frequent closures for security reasons or whatever reasons by the Israeli military forces; while national unity does not exist; and no participatory approach to development, development itself becomes an exercise to solicit funding and no more. For long term purposes, I believe the PA should work closely with the Palestinian people’s representatives to draw a national vision for development

For Hamas, I have read no document of them that lay the ground for a long term vision for economic development aside from the religious rhetoric. Development builds on three foundations: (a) provision of basic needs (you cannot have more if you do not have enough), (b) freedom of choice (including freedom from foreign military occupation, slavery, freedom of thought and freedom to choose appropriate technology, …etc), and (c) a basic change towards behaviour and attitudes to enable the people to have self dignity, identity or what have you. I do not think that Hamas is scoring in any of these, no matter what the reasons are. Imposing and indoctrination of ideology will limit the freedom of thought and the freedom of choice and it will never enable people to become masters of their own lives.

Over the medium term, the PA is scoring in soliciting funding for some development projects which can bring some improvements of the economic situation and some economic growth. But I suspect its long run sustainability. I believe that external funding should have had concentrated on building the national capacities to enable the internal impulse of economic growth (not to mention development). Moreover, the character of economic improvement that had been achieved under the PA is biased and had worsened income distribution since it had lead to the concentration of power and wealth in the hand of a few. Hamas’s policies on the other hand had lead into the pauperization of the masses and transformed the people of Gaza into receivers of aid while the productive base of the Strip had become thin (while at the same time, a new social class of rich people had emerged who had fortunes of trade smuggling).

2. Could you outline the principal economic constraints of the Paris Protocol in terms of the fiscal autonomy of the PA?

I wrote much about this. The main constraint is that the PA is made to be almost totally dependent of the Israeli transfers of revenues that accrue to the PA through the clearance system. It is also believed that some sort of fiscal leakage even if Israel had had the best intentions due to the fact that many products are re-exported to the Palestinian side as if they were Israeli products while they are in fact imported to Israel. Another form of fiscal leakage happens due to the loss of seigniorage that could have been gained on the circulation of a national currency. The circulation of the Israeli shekel is behind such a loss (estimated at about 5% of GDP).

3. Would you agree that a resolution to the PA-Hamas split is a precondition for economic growth? If we look at Gaza Strip and the West Bank (including East Jerusalem) as one political unit, and I think we should, then I would agree that such resolution is a precondition for economic growth. There are natural and historical economic ties between the two areas. They complement each other. For economic development, I believe such a resolution is a necessary condition for economic and social development because without national consolidation and unity development becomes impossible.

4. The PA wants to join the WTO. What are your thoughts on the desirability of this bid?

I think we cannot avoid becoming a member of the WTO. If we have to have some differential treatment in terms of trade policies (tariffs and quotas), then we should come a member to make benefit of such clauses where Palestine should be treated as a developing nation.

The idea that we are a de facto member of the WTO is absurd. Israel is not a developing nation and Palestine is only an annex to it. I am sure that Palestine needs time to become free of the Israeli economic hegemony. During this time we should not leave it the best intentions of Israel. We need to benefit from the WTO clauses on the differential treatment of a Palestine as a developing nation. With the WTO on our side, we can negotiate better terms with Israel than otherwise. Of course the benefits from WTO membership can be utilized if Palestine was sovereign. You know that friends of Palestine, countries like China might not agree to such full membership because it would not welcome such a move because Taiwan would become eligible for such membership something that China would hate.

I have to summarize by saying this: Development under occupation is an illusion on the one hand. Liberation is the anti thesis of military occupation and nothing less. On the other hand, development is more than lip service. It entails basic transformation from being destined to being masters of own future. By itself, transformation entails the building of strong foundations to enable the fulfilment of the human potential of free Palestinians as citizen of a free country and citizen of a world where mutual interests promotes cooperation rather than hegemony.