The Rand Corporation, an independent American NGO, has created a plan to develop the infrastructure, communication and transportation in the post-occupation, independent Palestinian state. The idea is relatively simple and is based on the concept of building a large high-speed rail line along the mountain ridge that runs from the north to the south of the country, connecting Gaza with the West Bank. Along with a high-speed train, Rand suggests the creation of a freight toll road, boulevards linking regional cities with the ‘arc,’ new business districts and a slew of other wonderful sounding ideas. Unfortunately, Rand’s proposal faces two major obstacles: the occupation and finance.
While the idea of the ‘arc’ would inevitably make the Palestinian state economically viable – specifically by easing transport, connecting Gaza to the West Bank and creating a link between Palestine, Jordan, Israel and the rest of the world (via air and sea transport) – it assumes that the future Palestinian state will be based on the pre-1967 borders. Rand admits that this is a very large assumption and is one that could have very damaging effects on the entire plan. The ‘arc’ plan assumes that Palestine will control the Jordan Valley (not if Netanyahu or Obama get a say, apparently) as well as free and/or easy access through Jerusalem (ditto).
[tweetmeme] The second problem here is that, unfortunately, major projects such as this plan cost money. Rand argues that such a project would be able to be completed for the mere sum of almost $20 billion dollars. While if such a plan were adopted, donors would most likely line up to pump money into Palestine (particularly if it made peace with Israel), it is unlikely that the fragile Palestinian economy would be able to deal with such a project immediately after independence – or, if Rand is to be believed, now. From 2008-2010, Palestine received around $7.7 billion dollars in international aid, yet despite this generosity, the Palestinian government will be running a $300-$400 million dollar deficit at the end of this fiscal year. This deficit stems from the fact that Palestine’s economy is driven mainly by government initiated and donor-funded projects, without much private sector involvement.
Due to the limitations imposed by the Israeli occupation, he growth of the Palestinian private sector – the true mark of development and sustainability – has been minimal. The inability of Palestinians to exploit – let alone access – the resources in the Jordan Valley or the markets of East Jerusalem and Gaza has been incredibly detrimental to the economic development of Palestine. Currently, the PA is having a tough enough time lowering unemployment, paving roads and improving schools. The extra expenses building the ‘arc’ might look good for the long-term, but it would include conceding projects that are more immediately demanding.
Finally, considering the levels of corruption within the PA, it is highly likely that a $20 billion estimate is considerably low. In a poll in 2009, 65.6% of interviewees considered the PA to be corrupt and this figure never dipped below 50% between the years 1998 to 2009, reaching highs of over 90%. The perceived corruption of the PA also paved the way for the Hamas electoral victory in 2006 and the current Palestinian schism which is further hampering the development of the state. Finally, between the years 1998 and 2008 (with the exception of 2004) 75% – 90% of countries ranked as less corrupt than Palestine.
Mohammed Dahlan, the former Minister of the Interior for Palestine once said: “of all the funds which foreign countries had donated to the Palestinian Authority, a total of five billion USD ‘have gone down the drain, and we don’t know to where.'”
Admittedly, the end of the Israeli occupation would relieve the Palestinian economy of many burdens and allow and encourage more private investment – meaning a less government-driven economy. It is difficult to say, however, that the level of corruption would be lowered by the implementation of the ‘arc’ plan and by independence. Unfortunately, while creating jobs and helping the long-term sustainability of Palestine, such a large presumably donor-funded project offers many opportunities for corruption.
Watch the video (short or long) and judge for yourself. If such a project were to be implemented, it would have to deal with the realities of a Palestinian state whose borders are unlikely to match those of 1967; however, such a project connecting the West Bank and Gaza and easing land, air and sea transportation would be transformative, to say the least. While I think that such a project should be implemented, the steps that can be taken now – as Rand suggests – are quite limited, due to Palestinian inefficiencies and budget constraints as well as the burdens of the Israeli occupation.
Photo from TPM; H/T to Bernard Avishai from TPM