Romney’s Comments on Palestinian Economy Stir Controversy


Time magazine reports:

“I recognize power of culture,” Romney said, hailing Israel’s strides in its 64 years as a nation. He allowed that a person would “have a hard time suggesting natural resources and land account for it all.”

Start with the numbers, which were more than a bit off: The World Bank puts Israel’s gross domestic product at closer to $31,000 per capita, while residents of the West Bank and Gaza struggle to get by on just $1,500. The bigger problem, however, is the parallel: Mexico is not occupied by the United States, nor Ecuador by Chile. But since 1967, Israel has controlled the economy of the Palestinian territories, restricting movement of people and goods in and out of the territories, collecting excise taxes — and withholding them from the Palestinian Authority to punish its leaders when they are perceived as being out of line. The disadvantages of Israel’s situation — the high cost of living, partly because it imports so much from so far away — are passed on to Palestinians, but few of the advantages are.

It’s on the combustible question of “culture,” however, that Romney is playing with fire. And not only because it attributes unflattering characteristics to the Palestinians. The fact is, when Palestinians are not living under occupation, they tend to write business success stories. In neighboring Jordan, Palestinians utterly dominate the economy, so much so that their success as onetime refugees has fueled resentment among so-called East Bank Jordanians. In El Salvador, Palestinian businessmen and -women amount to an oligarchy, so thoroughly do they hold the Establishment in their hands. The Palestinian community there and in other Latin American nations, including Brazil, has been in place for nearly a century, having fled during World War I to avoid becoming cannon fodder for the Ottoman Empire as it threw in its lot with the Kaiser. The Palestinians have done very well for themselves.

“Palestinians have the highest productivity in the Arab world,” economist Omar Shaban of the Gaza think tank Palthink boasted in an interview last year.  He didn’t have the figures at his fingertips to prove it, but he at least seemed to know what he was talking about.

I agree that Palestinians are entrepreneurial people. I also agree that the occupation harms the Palestinian economy. But I still think Romney has a point.

For one thing, the per capita GDP of Israel is nearly 6 times as great as the per capital GDP of Jordan, which isn’t occupied. In turn, the per capita GDP of Jordan is roughly twice that of the West Bank. Using Jordan as a control group (where, according to Time, “Palestinians utterly dominate the economy”), Israel still outperforms Palestinians in Jordan.

For another thing, the UN Human Development Reports on the Arab world point to, ahem, cultural factors such as:

  • “the freedom deficit, women’s empowerment, and the knowledge deficit” (2002)
  • “many constraints, including governance, hamper the acquisition, diffusion and production of knowledge in Arab societies” (2003)
  • “the deficit of freedom and good governance” (2004)
  • the failure to realize “the full potential of Arab women” (2005)
  • “the widespread absence of human security in Arab countries” (including the occupation, of course) (2009)
  • “the current reality in the Arab region is dominated by long-standing state structures which have inhibited the empowerment of Arab individuals and communities” (2012)

These factors play a role in the Palestinian territories, just as they play a role in the entire Arab world.

So, yes, Palestinians are right to critique Mitt Romney for focusing solely on cultural differences between Israel and the Palestinian Authority. But Mitt Romney is right that cultural values and institutions also explain at least some of the difference between the two. How much of a difference is a legitimate topic for discussion.

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