Trump’s helping Israel push the Palestinians to the edge (and so destroy itself)

October 16, 2018

In the quest to change Israel’s very nature, the Netanyahu government is pushing Palestinians to the edge – with the support of the Trump White House, says Dan Steinbock.

By Dan Steinbock
Special to Consortium News

The Trump White House and the Netanyahu government are fostering an extraordinary time bomb between Israel and Palestine in the name of “peace and progress,” warned a recent report by the International Monetary Fund (IMF). The report unsurprisingly said that “deepening rifts between key stakeholders and surging violence in Gaza further imperil prospects for peace.”

While economic and strategic polarization is steadily deepening between the two sides, the “peace initiatives” of the Trump White House are undermining half a century of American diplomacy and pushing the region closer to an abyss.

In the past, the Netanyahu government has vehemently opposed all parallels with South African apartheid. Unfortunately, new data suggests that under apartheid South African blacks had more to hope for than Palestinians today.

Unsettling Parallels

Between 1994 and 2017, Israeli GDP per capita, adjusted to purchasing power parity, increased by 150 percent; in the West Bank and Gaza, the comparable figure was 160 percent. Yet, the Palestinian starting-point is so low that progress in living standards is largely fiction.

Figure a: GDP per Capita PP: Israel Vs West Bank and Gaza (1994-2017) (World Bank).

In 1994 – amid the peace talks in Oslo – Palestinian living standards were only 6.4 percent ($1,526) of the Israeli level ($23,693) (Figure a). At the time, the hope was that peace would bring increasing stability, which would foster prosperity and rapid catch-up growth – until the radical-right assassination of Prime Minister Yitzhak Rabin triggered still another cycle of violence.

Last year, Palestinian living standards were about 7.3 percent ($2,494) of the Israeli level ($34,135). After more than two decades of new wars and friction, terrorism and restrictions, the catch-up has amounted to less than a percentage point.

Let’s set aside political debates about the causes and only focus on economic facts; i.e., changes in income polarization. And let’s compare the last two decades of apartheid South Africa with the past two decades between Israel and Palestinians. In the mid-70s, black South Africans’ annual per capita income relative to white levels was about 8.6 percent; that is, two percent higher relative to the Palestinian level vis-a-vis the Israelis.

As the apartheid came to an end in a series of steps that led to the formation of a democratic government in 1994, black South Africans’ annual per capita income relative to the whites climbed to almost 14 percent whereas the comparable Palestinian level remained only half of that figure last year (Figure b).

Ironically, South African apartheid was more conducive to economic progress in its last two decades than life in the West Bank and Gaza in the past two decades.

Moreover, the Netanyahu government’s economic policies have also dramatically increased economic polarization in Israel. In the early 1990s, the Gini coefficient, a measure of inequality, was around 35 in Israel, at the level of Portugal and Italy. Closer to 43 today, it is among the highest in OECD countries, and at the level of Nigeria and Zimbabwe. But there may be still worse ahead.

Leave a Reply

Your email address will not be published. Required fields are marked *