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Thursday, April 3, 2003

1) Palestinians Found to Admire Israeli Democracy. 2) Israel: A Democratic State with a Rule of Law, Unique in the Middle East. 3) Why Israel Is a Rich Advanced Country and the Arab Countries Aren't.

The New York Times has carried a fascinating story about the growth of democratic institutions, however imperfect, in the areas of the Palestinian Authority . . . where an elected legislature, elected president (corrupt through and through), and a constitution have been in existence for four years, with the Palestinians themselves responding to the pressures exerted on the PA by the Bush administration, forcing Arafat, among other things, to select a powerful Prime Minister. How is this possible, given the despotism of the PA and throughout the Arab world, with two or three small Gulf states making some progress in some degrees of media freedom and elections that aren't totally manipulated and gerrymandered?

The answer: the Palestinians have learned from the Israelis even as they had been under Israeli occupation and 25% of West Bank men worked inside Israel. In particular,

Lacking authority themselves, stateless Palestinians were free to criticize how others wielded it. "Palestinians under occupation had the luxury of being able to criticize everyone else without having to worry about what would happen to their heads the next day," said Khalil Shikaki, a Palestinian political scientist. He said that Palestinians developed a "culture of criticism," scorning Arab presidencies that functioned like monarchies and telling themselves they would do better if they had the chance. Palestinians also worked in Israel and watched Israeli television. They saw that, for its own citizens, the Israeli system had distinct virtues. This is not easy for even ardent Palestinian democrats to acknowledge.

Yet since 1996, Dr. Shikaki has been polling Palestinians about what governments they admire, and every year Israel has been the top performer, at times receiving more than 80 percent approval. The American system has been the next best, followed by the French and then, distantly trailing, the Jordanian and Egyptian.

In its early days, the Palestinian Authority held fourth place, with about 50 percent approval. Now, it is dead last, under 20 percent. Corruption, mismanagement and the stagnation of the Palestinian predicament have turned the culture of criticism against the Palestinian rulers.


Two extraordinary incidents in the last year underscore the reasons why the non-members of the Palestinian Authority --- itself rotten to the core, full of despotism and corruption and arbitrary internment of Arafat's political rivals --- are right to regard Israel as a model . . . especially in the Middle East. All 22 of the Arab countries are autocratic despotisms, ruled by the secret police. They differ mainly in the degree of brutality and harshness of their hold over the population. By contrast, Israel --- a democracy where one-sixth of the 6 million citizens are Arabs, the only Arab population in the Middle East with democratic rights and represented in the Israeli parliament --- also stands out as a country where the politically powerful are subject to the same laws as ordinary citizens. Consider:

  • Last year at this time, as the Israeli military was fighting its way into Jenin on the West Bank to destroy terrorist strongholds, Israeli Arab legislators went to the Israeli supreme court and petitioned the court to have the Israeli military command stop removing bodies from the city. The court did exactly that; more, the Israeli military commanders obeyed its decision. The notion that Arabs anywhere in the 22 Arab countries could petition any court to issue any orders whatever to the military commanders there --- never mind in the midst of a battle --- is so deliriously madcap that it would send any laugh meter rocketing right through its upper barriers into cosmic space.

  • Earlier this year, the Israeli government --- faced with an electoral campaign --- ordered two small Arab political parties disbanded, claiming they had supported terrorism against the Israelis. Their leaders complained to the Israeli supreme court, and the court found in their favor. They were re-instated and ran their candidate in the parliamentary elections.


    There are plenty of other sources about the rule of law in the Middle East (and elsewhere), or its absence.

    The best studies are carried out annually by Transparency International, a non-government organization that collects data based on systematic interviews with business and other non-political or non-administrative citizens in 99 countries. Israel in 2002 ranked 18th in the world, tied with Germany. By comparison, the US ranked 16th, and the only large country to rank better in the degree of corruption was Britain (10th). The first Arab country ranked was Jordan, 40th in the world, and from there the degree of corruption begins to soar. Keep in mind that the problems of corruption are no doubt worse in the most tyrannically cruel of the Arab states: Syria and Iraq and Libya and the Sudan, where people are sufficiently terrorized or fearful of the regime they are reluctant to answer honestly any questions. Iran (non-Arab) is rife with corruption too. See 2002 Corruption Perceptions Index

    All of which leads immediately to a related topic:



    Yes, even the oil rich Saudis, Algerians, Libyans, and others --- with the exception of the tiny, oil-laden Gulf States (Kuwait, Qatar, UAE) --- are poor and non-industrialized . . . for that matter, scarcely even near to being so. Saudi Arabia, with 20 million people, has one-third the per capita income that it did in 1980 despite trillions of dollars of exports. What's more, unemployment among men --- women scarcely work --- is 25-30%, an astounding figure. It's even worse in Libya and Algeria and the other petroleum-producing Arab countries.

    Why All This Backwardness? To answer, return to the topic of a rule of law . . . essentially non-existent in a far-reaching sense anywhere in the Arab world, where the ruling despot --- whether a king or a sheik or a prince or a President --- either rules for life, then hands over power to a son, or is killed in a coup, with a new despot and clientele-clique taking his place. Where, too, power ultimately depends on a pervasive secret police, with only the degree of cruelty the major difference across the 22 Arab countries.


    Spefically, Consider Why Corruption Matters, Not Just Politically and Morally, But As A Block To Development

    Countries that suffer from large degrees of corruption, nepotism, and the arbitrary exercise of law will very likely all remain backward and under kleptocratic rule until energetic wide-sweeping institutional changes happen to be made: in legal systems, in political institutions and bureaucratic agencies, in financial institutions, in education, and in business-organization and regulations (protection of property, accountability, transparency, corporate governance, bankruptcy laws, intellectual property rights) . . . along with the cultural habits of cronyism and clientelism and nepotism and corruption that amount to huge diversions from productivity economic growth and technological advance.

    Can we be more specific? Yes. Remember what we've said before about development in earlier commentaries: the reasons that countries are rich --- the industrial democracies of Euroe and North America and the English-speaking world, Japan, Israel, South Korea, Taiwan, Singapore --- reduce to three sets of interacting variables over long periods of time. Oppositely, they are poor if they do badly on these three sets. Specifically,  

    1. Rich countries invest more, over a long period of time, in physical and human capital, and they do so PRODUCTIVELY, EFFICIENTLY, in line with standard market theory.

      2. Rich countries invest productively because they have a good SOCIAL and POLITICAL and ECONOMIC INFRASTRUCTURE conducive to hard work, personal initiative and accountability, and rewards for accomplishments: specifically, legal, political, bureaucratic, financial, educational, and business institutions, along with sound government policies and regulations that create an effective investment climate at home and encourage competitive markets and openness.


    --- Oppositely, countries remain poor because, even if, like the Soviet Union for 7 decades or Maoist China for 3 decades, they invest a lot in human and physical capital (firms, machines, transportation, communications etc), they have largely wasted the investments because of bad or heavily distorted institutions and policies and rampant corruption and nepotism, all compounded by a lack of transparency and accountability by key policymakers in both the economic and political realms. The upshot? Their social, political, and economic infrastructure amounts to huge DIVERSION of investment and human resources.  

    3. Rich countries with effective political, administrative, financial, legal, and economic institutions --- not to forget the educational system at all levels --- can advance and use knowledge, reflected in progressive technological innovation, imports, and diffusion. Long-term economic growth rests on such technological and knowledge-advance . . . provided there are good institutions and policies and properly allocated investments in human talent and physical plant. Plus, of course, rewards for successful innovation.




    High levels of corruption, nepotism, clientelism, cronyism, and discrimination against large numbers of the population in education and the job market are all signs of economic backwardness . . . as is the lack of a rule of law over political power-holders, the military, the police, the top bureaucrats, and powerful economic interests. And --- the key point --- not just signs of backwardness, but major causes. In such societies, cynicism and mistrust prevail among the population, whether across tribal or ethnic lines, family lines, religious lines, or regional divisions. Advancement, socially and economically, depends on who you know and what kinds of mutual services are involved in the relationship --- instead of being based on education, hard work, and achievement. Conspicuous consumption not only flourishes, but is vaunted --- a sign of success, along with contempt for others.

    Nor is that all.

    Education is usually skewed badly as well --- skewed and poor in quality, with the sciences and technological training neglected . . . often severely so. In the Arab countries the problems here are compounded by severe discrimination against women --- the actual degree on this score varying somewhat across countries, but pervasive all the same. One serious consequence? illiteracy in the Arab countries is the worst in the world . . . worse even than in much poorer tropical Africa. By insulating themselves from most modernizing forces for centuries too --- until the last few decades, where the trappings and glitter of industrialization have made inroads, but not the institutions and policies and work-ethos that mark industrial societies --- the Arabs have shut themselves off from the rich scientific, technological, philosophical, and literary achievements of the Europeans, English-speaking peoples, and the Asians. As the UN's Arab Human Development Report 2002 noted last year, the 280 million Arab people have translated fewer books into Arabic over the last 1000 years --- that's 10 centuries --- than Spain does yearly for its 40 million people.

    Add all this up --- a lack of institutionalized political legitimacy (usually democratic) and despotism, the lack of an effective rule of law, pervasive corruption and nepotism and cronyism, pervasive cynicism and mistrust and flare ups of violence, a lack of a strong work ethos among the rich and powerful, distorted financial and economic institutions, marked female discrimination and at times outright oppression, and big blockages when it comes to knowledge and education --- and the backward nature of Arab societies is essentially illuminated.


    The Rich Countries Again

    Rich countries, it needs to be stressed, can have different kinds of market-dominated structures: eg., the Anglo-American model that prefers free markets generally compared to the Continent welfare-state. But note: the differences between these two systems -- or even the East Asian model (possibly) --- pale into obscurity when they are compared with the organized kleptocracies found pervasively in the Middle East, Tropical Africa, parts of Asia, and parts of Latin America and East Europe. All the rest --- fulminations in the Arab world or elsewhere against globalization, or the capitalist world system, or dependency --- amount to so much piffle whistled into a void when it comes to the fundamentals of development. And those who want to blame outsiders for their backwardness -- the West, the US, Hindus, Jews, capitalism, globalization, George W. Bush, maybe even Mickey Mouse --- and get even somehow are asking the wrong questions and shifting responsibilities. In doing so, they are helping to keep their societies backward, despotic, corrupt, and full of arbitrary secret police rule, with the state-controlled media given over to know-nothing conspiratorial fundamentalists.



    In the 6 Day war of June 1967, while Israel was fighting Nasser's Egypt that had ordered UN peacekeepers off the Sinai Peninsula and blockaded Israel's access to the Red Sea, Jordan and Syria attacked Israel from the east. At the end of the war, the Israelis pushed the Jordanians out of east Jerusalem and the West Bank that they had ruled since 1948, when 5 Arab states attacked the new Israeli state. When the Israelis took over the Palestinian area, the latter was a backward region of the backward Jordanian economy. Over the next 29 years --- until the Palestinian Authority took control of the Palestinian West Bank cities and all of Gaza under the Oslo Process in 1996 --- the Palestinian economy flourished: the more it integrated with the Israeli, and the more Palestinian workers labored in Israel (about 25% of the labor force), the more it developed into one of the two most prosperous in the Arab world among all the countries that have no oil resources.

    In particular, according to a World Bank consultant, a labor economist who has worked for decades in the Arab world, Keith Marsden:

    " . . . According to the World Bank, the living standards of Palestinians in the West Bank and Gaza were higher than in most Arab countries in 1999. Palestinian income per head was nearly double Syria's, more than four times Yemen's, and 10% higher than Jordan's (one of the better off Arab states.) Only the oil-rich Gulf States and more Western-oriented Lebanon were more affluent.

    ""Average life expectancy for Palestinians, 72 years, equaled Saudi Arabia's, and easily topped the 68-year average for all the countries of the Middle East and North Africa region. The illiteracy rate among Palestinian women had dropped to 23%, compared with 69% in Morocco, 61% in Egypt, 45% in Tunisia, and 44% in Syria."

    More specifically, Marsden noted:


    Wall Street Journal

    -The Palestinians had made great economic progress under the occupation; much of that is now destroyed

    "The Viability of Palestine"


    (Mr. Marsden is an economist in Geneva. He has worked in several Arab countries for the ILO and the World Bank)

    It should by now be clear that a sustainable Mideast peace can only be built on two firm foundations. First, Israel's right to exist behind secure borders must be recognized. Second, a viable Palestinian state should be created. Though all these achievements appear unreachable right now, it's the viability part that looks the hardest at this point . . .

    More Diversified

    Nearly twice as much was spent on health in Palestinian lands, 8.6% of GDP, than in the neighboring region as a whole. Housing standards were good in 1999. Over 80% of the Palestinian population owned their accommodation, 70% of them in houses or villas, including those built within what are still called refugee camps. The Palestinian economy is also more diversified. Manufacturing accounted for 16% of GDP and services 62%. Both exceeded the 14% and 48% averages respectively for North Africa and the Middle East. Yet the West Bank had been a relatively backward region of Jordan until 1967, when Israel took over. Several factors explain the subsequent transformation. Closer integration with the Israeli economy has been a major contributor. The U.N. estimates that 25% of Palestinian workers were employed in Israel in 1998, and the proportion rose to 27% in 1999. Moreover, 75%-100% of direct taxes levied on Palestinian workers in Israel, and indirect taxes on Palestinian imports through Israeli ports, are transferred to the Palestinian Authority through a revenue-clearance system. This unique arrangement provided more than 60% of total PA revenue from 1995 to 1998. Net transfers from the Israeli Treasury to the PA amounted to $542 million in 1998.

    A de facto customs union between Israel and the territories has existed since 1967, and was formalized by the 1994 Paris Protocol. This gave preferential access to the Israeli market for Palestinian goods, and to the EU and the U.S markets. Israel has concluded free-trade agreements with both . . .

    These favorable trends began to turn sour toward the end of 2000. The intifada expanded to involve shooting by various militia groups, using weapons paid for with EU aid to official PA police and security forces. Suicide bombing attacks on civilian targets within Israel soared . . .

    The inevitable response was the temporary closure of transport [and workers'] links between the territories and Israel. Policy reforms and resource reallocations along these lines will surely yield greater benefits to the "Arab Nation" than a continuation of its present confrontation with Israel."

    Replies: 1 Comment

    In response to your article from Thursday, April 3rd, I wanted to say thank you on behalf of the Israeli community. I was astounded that there was not only a profoundly interesting and eloquent verse on the state of the Arab world in relation to Israel, but also the truth. that is rarely found in Middle East or American politics.

    Posted by Jenny @ 04/06/2003 02:42 PM PST