Aaron Segal, professor of political science at the University of Texas, El Paso, is the author of An Atlas of International Migration (Bowker, 1993) and Learning by Doing: Science, Technology and the Developing World (Westview, 1987).
Let us assume, for the sake of argument, that an independent Palestinian state comes into being before the year 2010. What would it look like? Would it achieve democracy and civic society or descend into authoritarianism? Would Palestinian nationalism turn into a constructive force or engender discontent? Would Palestine settle into an easy coexistence with neighbors, pose a threat to them, or be vulnerable to their interventions?
Answers to these questions are necessarily speculative; a wide range of permutations and combinations lies between everything's going wrong and everything's going right.1 Rather than try to specify the details of a Palestinian state that would achieve full independence somewhere between 2000 and 2010, this essay estimates its parameters through the study of possible scenarios. If guessing about Palestine is complicated by large gaps in data and the highly volatile feelings this issue inspires among Israelis and Palestinians, and also by the inexperience in governance of the Palestinian Authority (PA), it is facilitated by the small size and population involved, the increasing availability of data, and the context established by the Oslo process. We can envisage possible futures without predicting the future.
The following pages take up four key factors: political legitimacy, economic growth, human resources, and external relations. Many other important factors (physical infrastructure, availability of water, transport, relations with the Palestinian diaspora, historical factors, religion, and culture and language) count as well, but these four are the sine qua nons of a viable independent Palestine. The absence, failure, or disintegration of any one of them would compromise the Palestinian state and its society. No one of these factors can guarantee the overall viability of an independent Palestine; but a successful independent Palestine requires that all of them turn out satisfactorily.
I. POLITICAL LEGITMACY
The prospects for political legitimacy -- based on open and fair regular elections, due process of law and an independent judiciary, public accountability of the administrative services, and a civic society of interest groups -- are poor in an independent Palestine. While the electoral victory of Hanan Ashrawi and a few other democratic-minded and human-rights-oriented candidates in the January 1996 elections is encouraging, it provides far too small a base from which to build an effective civic society.
Legitimacy requires opposition movements (such as Hamas) to renounce violence, participate in elections and parliament, and evolve toward becoming a loyal opposition (as religious movements have done in Jordan). There are few signs of their moving in this direction.2 Reports of fraud and intimidation marred the high turnout in the January 1996 elections and the overwhelming vote for Yasir Arafat as president.3 Worse, Hamas and other groups boycotted the process; the major opposition parties must participate if elections are to be fair. The differences between the PLO and Hamas (over the peace process, the nature of society, the role of Islam) must be decided at the polls or they may be determined in the street.
The judiciary and the police constitute the weakest element in the Palestinian effort to achieve governance. Hamas insists on a legal code based on the Shari`a (Islamic sacred law), the Palestine Liberation Organization (PLO) equivocates. The judicial system contains a hodgepodge of British, Jordanian, and Israeli laws and procedures and is based mostly on patronage.4 Guarantees of personal and civil liberties hardly exist on paper, much less in reality. To the chagrin of many Palestinians, PLO loyalists from the Tunisia headquarters staff the police and civil service, perpetuating an authoritarian political culture expressed in police coercion and adulation of the ruler. The prison system presents a key test of governance. The Palestinian police rely on harsh interrogations, even torture, to extract evidence from persons rounded up without warrants or any semblance of due process.
Palestine would be weak in the elements of civic society. Voluntary organizations and non-PLO-dominated associations are scarce, though some professional societies (such as the Red Crescent) and private foundations do exist. The PLO firmly controls radio and television programming; those seeking another view must resort to Israeli, Jordanian, and Egyptian media. Independent newspapers are harassed for opposing PLO policies -- or even for not giving Arafat enough front-page space. An independent Palestine is unlikely to enjoy even minimal freedom of the press.
Looking at the full range of options, from a democratic Palestine to a totalitarian police state, what is the most likely outcome? A mildly authoritarian state.
II. ECONOMIC GROWTH
An independent Palestine is not likely to enjoy economic growth greater than its very high rate of population increase (currently 3.7 percent yearly). Recent years have seen negative growth, negligible savings and investments, and massive deficits in balance of payments, trade, and the budget. Unemployment and underemployment rates are not just extremely high but are worsening as Israel replaces Palestinian day workers with labor from such countries as Romania and Thailand.5 The few potential growth sectors (tourism, domestic light industry, and agriculture for foodstuffs and exports) all suffer severe external and internal constraints owing to shortages of investment capital, human resources, and markets. Government institutions are a poor bet to operate the electric, postal, telephone, and other services.
As of late 1996, the future Palestine still lacks its own currency, central bank, and effective taxing authority; nor are these likely to emerge soon. The Palestinian Monetary Authority has no reserves and lacks the powers of a central bank. At present, for example, most tax income derives from transfers by the Israeli authorities. There is little likelihood for replacing tax transfers from Israel and declining remittances from Palestinian migrant workers with local tax sources.
Palestine would start out with minimal foreign-exchange reserves, revenue, or ability to borrow or to service debts. Most banks are branches of Israeli and Jordanian corporations, with limited lending capabilities, and are likely to remain that way. The independent state will depend for many years on grants and low-interest loans with extended grace periods. High political and economic risks render foreign direct investment and diaspora capital flows unlikely. Instead, diaspora and migrant-worker remittances will flow directly to households, where they will be used mostly for consumption, not investment. Changing the savings-investment ratio will be critical for the new state.
Inadequate physical infrastructure aggravates the acute lack of capital. Palestine will likely lack a fully operational international airport or commercial port, and have deficiencies in electricity, phones, potable water, and other services. Although some of these services are in the planning stage, implementation is weak. The lack of administrative capabilities to provide these and other services is a most serious problem; state-owned corporations probably cannot productively absorb increased capital flows.
Since September 1993, donors have pledged nearly $1.4 billion but the PA continues to be a major restraint on absorbing donor aid, for too much of it has gone to pay the salaries of a bloated and patronage-based civil service and police. In 1996, the Palestinian police numbers eighteen thousand and the civil service thirty thousand; moreover, with average monthly salaries of $475 and $530, respectively, these employees enjoy an income more than two times the Palestinian average.6
Despite the use of aid for recurrent expenditures rather than investment, the PA itself is unable to expand most of the basic social services, such as health and education, for a growing population. The budget deficit combines with the constraints on borrowing to absorb most social-services expenditures in salaries and maintenance. Any expansion of educational and medical services has to compete with external aid for infrastructure. Donors are more and more inclined toward paying for projects rather than salaries. The United Nations Relief and Works Administration (UNRWA) continues to provide health and education services for the nearly 10 percent of Palestinians who remain in refugee camps. The major educational bottleneck is the lack of secondary, technical, and vocational institutions, leaving primary-school graduates with nowhere to go.
An independent Palestine is also likely to lose out to Israel and Jordan over user rights to scarce water for irrigation and urban use.7 Palestine will need massive external aid to extend the irrigated area using water it negotiates from its neighbors' existing rights. And since major Palestinian agricultural exports, such as citrus and olive oil, compete with Israeli and Jordanian supplies, the prospects are poor for finding markets for these crops grown on the land brought under more intense cultivation.
A lack of appropriate institutions presents another obstacle to economic growth. Few multinational corporations are present; local businesses consist primarily of small-scale firms with limited capital and technical capacity. Research and development is minimal, even in the seven universities of the West Bank and Gaza. The diaspora too is characterized by small-scale trading firms.
The growing gap in income and opportunity between the richer West Bank and poorer Gaza also creates problems. For 1992, the World Bank reported $1,150 in per capita income for the Gaza Strip and $2,500 for the West Bank. Unemployment and underemployment reaches 40 percent in Gaza versus a mere 20 percent in the West Bank.8 Gaza is over-urbanized, lacking in arable land and water, and ridden with infrastructure deficiencies. Lacking almost all other exports, Gaza for a decade or more must depend disproportionately on the earnings of migrant workers in Israel -- even as its workers are increasingly denied access to Israel, Saudi Arabia, Kuwait, and much of the Gulf.9 The International Monetary Fund (IMF) has concluded about Gaza that "the prospects for a marked improvement in employment, the fiscal balance, private sector investment and real per capita consumption are limited." It and the World Bank recommend a strategy that "is outward-looking, led by the private sector, and able to promote sizable nondebt-creating private capital inflows for investment in productive, labor-intensive activities."10
In all, Palestine is likely to be a highly dependent, slow-growth state unable to respond to the expectations of its inhabitants. The West Bank is likely to grow modestly while Gaza lags. If donor support falters, economic stagnation or even negative growth may result. It is difficult to develop a scenario in which sustained economic growth stays significantly ahead of population increase.
III. HUMAN RESOURCES
Human resources include such social indicators as educational and skills levels, nutrition, and health care, as well as such intangibles as political will, cultural pluralism, nationalism, and religion.11
Palestine will enjoy the benefits of homogeneity, with Sunni Muslims making up nearly 95 percent of the population; the remaining 5 percent includes Catholics, Greek Orthodox, and members of Eastern Rite churches.12 Palestinians display a discipline and will, as displayed in their struggle for independence, and they share a historical legacy and a determination for national success. Most of them retain deep rural, clan, and village ties.
The basic split among Palestinians is political, between those ready to make peace with Israel and those intent to continue the armed struggle; this parallels a division between those seeking a more secular, nationalist country and those insisting on an Islamic society.
The nearly 125,000 Israeli settlers in over ninety settlements, mostly in the West Bank, constitute a great and glaring exception to this homogeneity. An independent Palestine almost necessarily implies that these settlers will be removed to Israel, for no Palestinian state can tolerate a continued presence of hostile armed settlers in its territory, often occupying strategic sites. Should they remain, they will need IDF protection. While some settlers may opt to live under Palestinian rule without Israeli security guarantees, most will have to be repatriated. They may leave peaceably (through cash buy-outs) or not (a cut-off of Israeli services, possibly even forceful eviction by Israeli troops).
Palestinians have one of the world's highest population growth rates, estimated in 1991-92 at 46.5 per 1,000 for the West Bank and 56.1 for Gaza.13 This results from a high total fertility rate (how many children each woman bears), a rapidly declining maternal and infant mortality, and a very young age distribution. Total fertility was estimated in the late 1980s at 6.19 births per woman, infant mortality at 43 deaths per 1,000 live births, and the portion of the population under age 15 at 45 percent.14 Unless several steps are quickly taken -- the status of women improved, education for women extended, the legal age of marriage raised, family-planning services made more available -- the population will likely double in twenty years. Even if total fertility rates drop by 50 percent over that time period, the momentum of a young population ensures fast population growth and great difficulty in providing health care and education.
Compared to many other Arab states, Palestinian education and skills rank relatively high; still, they are deficient, especially for women, with an emphasis of quantity over quality.15 About 70 percent of adults are literate. While 8 percent of Palestinian men claim a university degree, only 2 percent have a secondary vocational or agricultural degree. The intifada (uprising) that began in 1987 closed many schools until 1989 and resulted in a legacy of disruptions, dropouts, and school divisiveness. The state's meager revenues would make it hard for it even to maintain the educational status quo; to expand primary and secondary education to the entire population would take much more donor aid than can reasonably be expected.
The labor force grows by an estimated 15,000 young persons annually, and generating new jobs for them is the key to improving living conditions. To make matters worse, external opportunities are closing down. Since the Kuwait war, job opportunities for Palestinians in Saudi Arabia, Kuwait, and other Gulf states have been drastically cut. Israel is phasing out its reliance on Palestinian migrant workers: their number has dropped from nearly 100,000 in the 1980s to 25,000 in 1996, and is likely to fall further. Only a small number of Palestinians with professional qualifications will be able to emigrate. This means that 100,000 new jobs are needed by the year 2000.
The contrast between economic expectations and realities may feed rising discontent and political bitterness, especially in Gaza. Political parties and movements may capture some of this discontent; it may also be expressed spontaneously. The poorly trained and equipped police force may be tempted to escalate coercive tactics to deal with open protests.
Economic problems threaten to complicate relations with Palestinians in the diaspora, which includes long-term refugees living in Lebanon and Syria, small-scale merchants in the United States, and dwindling numbers of professionals, technicians, and construction workers employed precariously in the Middle East. They will not return permanently to a failed economy; rather, Palestine will look to the diaspora for remittances and investments while the diaspora seeks homeland jobs and opportunities.
Scenarios for human resources are driven by the pent-up frustrations and high expectations of an overwhelmingly young population. The most realistic scenario is a steady state in which schools, health services, and other human resources neither significantly improve nor deteriorate. A less likely scenario is one of net deterioration of services as resources are unavailable to meet the demands of a growing population. The least likely scenario consists of a modest improvement in human resources based on an increase in personal savings directed at education.
IV. EXTERNAL RELATIONS
Diplomatic recognition, especially by major powers, and membership in international organizations is the modern sine qua non of independence. Unlike other secessionist movements (for example, those of Turkish Cyprus, Kurdistan, and the Western Sahara), the PLO has a particularly successful record of building such recognition. It has some eighty liaison offices and related facilities around the world, all of which pave the way for eventual widespread recognition. Palestine is already a full member of the Arab League and enjoys special access to the United Nations, World Bank, and IMF. It can expect to become a full member of most major international organizations.
If recognition presents little problem, the site of the state's capital will be exceptionally contentious. Israelis insist that Jerusalem remain the undivided capital of Israel, and of Israel alone. Against this, the Palestinians insist that East Jerusalem, with a population of 150,000, become their capital. They look forward to a two-state, two-capital, undivided city. Both sides reject proposals for some form of municipal autonomy. The Israelis, who since 1967 have physically controlled the city, do not allow any embassies at all in East Jerusalem or new consulates beyond the three (of the United States, France, and United Kingdom) already present. At best, an independent Palestine might be allowed a passport office in East Jerusalem or a minimal semi-official political and cultural presence, such as Orient House. However, Jerusalem more likely will remain a single city under Israeli sovereignty in which Palestinian residents make up a minority of the population. This leaves independent Palestine in a conundrum. It can either designate a West Bank city as an interim capital while insisting on its rights to East Jerusalem, or it can relinquish its claim. Either way, the PLO will be accused by Hamas and other opponents of having sold out.
Such long-term supporters of the PLO as Algeria and Tunisia should maintain excellent relations with Palestine, and relations should also be cordial with Egypt. Saudi Arabia, Kuwait, and the Persian Gulf states have neither forgotten nor forgiven PLO support for Iraq in the 1990-91 war, and have largely reneged on their 1993 pledges of aid to the PLO. However great their vested interest in a moderate, nonradical Palestine, these governments are likely to pursue cautious and austere policies toward the new state. The internal opponents of the PLO will find plenty of external support from such states as Syria, Iraq, and Iran. However, domestic problems and resource constraints will likely limit their efficacy.
Relations with Jordan are likely to be more adversarial than cordial. Jordan's economy, just four times larger than that of Palestine, is highly competitive with that of the West Bank in tourism, agricultural exports, and light industry.16 Economically, Jordan has far more to gain through complementary ties with Israel than through rivalrous ones with Palestine. Politically, Jordan will seek to extend its influence in Palestine. It will continue to compete for the loyalty of the nearly 50 percent of its citizens who are of Palestinian origin. If a Palestinian state falters economically, as is highly likely, Jordan may discreetly resume its goal of a Jordanian-Palestinian political entity. Through his renewed claim to be the spiritual guardian of the Al-Aqsa Mosque in Jerusalem, King Husayn has implicitly restated a dynastic claim to be the spiritual leader of all Palestinian Muslims. The threat from Jordan is cultural and political rather than military or economic; as such, it may be the new state's most serious external threat, for it concerns issues of loyalty and identity. However, there are no examples in modern times of newly independent states that have voluntarily renounced their sovereignty to merge with a neighbor.
Relations with Israel will be incredibly complex, involving as they do a host of economic issues (fiscal and monetary policy, tax transfers, customs, migrant workers, telecommunications, ports, imports and exports, water rights) and many other issues as well (such as Jerusalem, security, terrorism, and fiscal and monetary policies). Continuous, detailed negotiations will be needed to resolve contentious issues. The PA will be negotiating from a disadvantageous position, lacking as it does experts, data, and experience. The Palestinian dependence on Israel, an economy thirty-five times larger than its own and the source of 90 percent of its gross national product, creates acute asymmetry. As a result, Palestinian bargaining power on most of these complex issues is negligible; and the one credible threat, that of violence, will only be counterproductive, for it would prompt massive Israeli economic sanctions or even direct intervention.
While some Israeli political forces will want Palestine to succeed, they obviously will not accept that at Israel's expense; and other Israelis will want Palestine to fail or to be very weak. In combination, this means that every Israeli concession, whether on electricity supply, water rights, tax transfers, or migrant workers, will be bitterly opposed within Israel and only grudgingly granted. While the spectrum of relations between Palestine and Israel can range from limited cooperation to outright hostility, Israel will be neither a partner nor a friend. On a day-to-day basis, relations will be harsh and mired in the nitty-gritty. Technicians will argue over minute details. Knowing that they have little bargaining strength, Palestinians will make maximal demands. An independent Palestine can afford neither to disentangle quickly from its myriad ties to Israel nor to become an Israeli client-state. It desperately needs to reduce its dependence on Israel, which in turn implies increased aid from the Arab world and the West.
Palestinian-U.S. relations are likely to be troubled and problematic. While the PLO wants Washington to bring pressure and influence on Israel at critical junctures in the peace negotiations, the U.S. government cannot deliver Israel; nor can it provide major support to an independent Palestine. Bilateral aid, for example, will be modest, having to run a hostile congressional gauntlet. Rather, the president can (and will) work within the World Bank and IMF framework to promote aid.
In all, the prospects are for an independent Palestine's maintaining reasonable, if occasionally turbulent, external relations. Its enemies are likely to have their attentions directed elsewhere, while its friends are fickle. Ultimately, its future will depend on stable relations with Israel and Jordan.
The future of independent Palestine can be seen in terms of four main scenarios. In order of probability from highest to lowest, we rank them as follows:
1. Palestine is a shackled, highly dependent state. The economy is in recession or stagnation, the authorities rely on coercion to suppress opposition, donors disengage, and adversarial relations develop with Israel and Jordan over such matters as water. Disillusion and disenchantment prevail. This scenario is most likely because Palestine's aging leadership lacks the ability to respond to the massive expectations of a young society insistent on rapid change.
2. Palestine achieves modest economic growth, a vocal civic society provides some checks to government power, and human resources improve, including the status of women. This scenario is feasible but poor economic prospects and high societal discontent make it difficult to achieve.
3. Palestine achieves a democratic transition, rapid economic growth, and institutionalized guarantees for human rights. Donors and Israel respond accordingly as Palestine becomes an economically successful, open state and society. The economics of Palestine make this a low probability reinforced by the drift toward an authoritarian polity that exhibits low tolerance for opposition in any form.
4. An independent Palestine becomes a military, political, and terrorist threat to Jordan and Israel as well as a conduit for support from Iran, Iraq, and Syria. This is highly unlikely due to the ability of Israel to bar Palestinian migrant workers, plus its readiness to intervene in Palestinian internal affairs; and to the low-risk policies of Palestinian leaders seeking to collaborate with Israel.
Palestine can become a viable independent state and society; and its doing so depends more on internal efforts than on the vagaries of external relations.
1 For a pioneering effort to justify the legitimacy of a Palestinian state from an Israeli viewpoint, see Mark A. Heller, A Palestinian State: The Implications for Israel (Cambridge, Mass.: Harvard University Press, 1983).
2 Ziad Abu-Amr, Islamic Fundamentalism in the West Bank and Gaza: Muslim Brotherhood and Islamic Jihad (Bloomington: Indiana University Press, 1994), chap. 1.
3 The New York Times, Jan. 21, 1996.
4 George E. Bisharat, Palestinian Lawyers and Israeli Rule: Law and Disorder in the West Bank (Austin: University of Texas Press, 1991).
5 IMF Staff Country Report No. 95/106, "West Bank and Gaza Strip--Recent Economic Developments and Progress in Institution Building," background paper issued in connection with the 1995 Article IV consultation with Israel, p. 21.
6 Ibid., p. 10.
7 World Bank, A Strategy for Managing Water in the Middle East and North Africa (Washington, D.C.: World Bank, 1994); Daniel Hillel, "The Struggle for Water," Palestine-Israel Journal (Jerusalem), Summer 1994; and idem, River of Eden (Amherst: University of Massachusetts Press, 1995).
8 IMF Staff Country Report, pp. 5-6.
9 Ibid., p. 27.
11 Marianne Heiberg, Geir Ovensen et al., Palestinian Society in Gaza, West Bank and Arab Jerusalem (Oslo: FAFO, 1993) is an invaluable source; it relies on detailed survey research as well as data from Israeli statistical sources.
12 Ibid., pp. 255-61. The number of Christians there is diminishing with time; for example, John Melkon Rose, The Armenians of Jerusalem (London: Redcliffe Press, 1992) tells how a small Armenian community in Jerusalem has mostly emigrated.
13 Comparable rates are 37 per 1000 for Jordan, 29 for Egypt, and 21 for Israel. See World Bank Development Report, 1995.
14 Heiberg, Ovensen et al., Palestinian Society, pp. 35-75.
15 Sami N. Anabatawi, Palestinian Higher Education in the West Bank and the Gaza Strip (London: Routledge, 1987).
16 World Bank, Peace and the Jordanian Economy, (Washington, D.C.: World Bank, 1994).