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Bizzarely, Romney's gaffe was good for Palestinian cause

One remarkably out of touch observation last week has set off unprecedented, and long overdue, media commentary in the US and Europe about the Palestinian economy.

With one factually wrong, insensitive and patently biased comment, Republican presidential candidate Mitt Romney did more to focus US media attention on the Israeli occupation and its effect on the Palestinian economy than any other development in the past two decades.

Mr Romney's observation last week - "culture makes all the difference" in explaining the disparities between the Israeli and Palestinian economies - was so remarkably out of touch with reality that it set off unprecedented media commentary in the US and Europe. In the following week, the Palestinian economy received thousands of mentions in international media.

Many US major daily newspapers featured articles, commentary and even editorials taking issue with Mr Romney's statement, highlighting repressive Israeli policies, not a purported inferior culture, as the reason for the poor performance of the Palestinian economy.

Most articles included citations from the World Bank - "the government of Israel's security restrictions continue to stymie investment"- and the CIA World Factbook - "Israeli closure policies continue to disrupt labour and trade flows, industrial capacity and basic commerce ... [and] have resulted in high unemployment, elevated poverty rates and the near collapse of the private sector."

What is striking is that it took Mr Romney's remarks to bring these facts into the public discourse. When the most recent World Bank report was published just a few days earlier, it received scant attention. The only point that received a lot of coverage was the Bank's comment that the Palestinians were too dependent on foreign aid and that the "economy is currently not strong enough" to support a state - a line latched on to by opponents of Palestinian statehood.

There is no doubt that there are huge disparities between the Israeli and Palestinian economies. In fact, they are significantly greater than Mr Romney stated them to be. While he cited per capita GDP numbers, giving Israelis a two-to-one edge over Palestinians, the World Bank says the gap is more like 10 to one (and, according to other sources, it may even be double that).

It didn't have to be this way. In 1993, around the time that Israelis and Palestinians were signing the Oslo Accords, the World Bank released a multi-volume study on the Palestinian economy. The study noted the effect of sustained occupation on the West Bank and Gaza, and the consequent harm done to some economic sectors. Nevertheless, the World Bank was bullish on Palestinians' entrepreneurial spirit, saying that investment in infrastructure and greater freedom could lead to rapid growth.

That never happened. Instead of having the freedom to grow and develop, new hardships were imposed on the Palestinians. In 1994, the economy received a devastating hit after Palestinians were cut off from Greater Jerusalem, along with other severe limitations on interaction between Palestinians and Israel. The move was imposed as a temporary preventive measure after an Israeli settler's massacre of Palestinians in Hebron. The "temporary" closure never ended.

Under the occupation, Palestinians have been reduced to a dependent economy. Two of the largest sources of employment are low-paying, day-labour jobs in Israel and small manufacturing enterprises producing items that Israeli companies export with a "Made in Israel" label.

Over 100,000 Palestinians lost their jobs in Israel in 1994, and hundreds of small businesses were forced to close because trade was restricted. With the Oslo peace process underway, Israel prospered, with dramatic increases in foreign investment. Meanwhile, cut off from the economic hub of Jerusalem, denied the ability to import raw materials or export finished products, the Palestinian economy languished.

At the time, I was involved with a project founded by then-vice president Al Gore to promote investment in the Palestinian economy. When I informed the White House of Israeli impediments to investment and the deteriorating economy, President Bill Clinton and Mr Gore were concerned, but their staff countered that raising these issues would only make Israel defensive. The peace plan, not Palestinian prosperity, was seen as the more important goal.

This state of affairs is still being ignored with terrible consequences for ordinary Palestinians. Israeli settlements in the West Bank and East Jerusalem have more than doubled. For nearly two decades, the blockaded Gaza Strip has had a youth unemployment rate of nearly 80 per cent. Most young men in that outdoor prison have no jobs, no prospects to get married and raise a family, and are living in despair.

In the face of all this, the best Congress could do in recent weeks was to propose, yet again, to move the US embassy to Jerusalem, hold hearings on Palestinian corruption and threaten to cut US assistance if Palestinians continue with their feeble threat to seek United Nation's recognition.

Then Mitt Romney went to Jerusalem and helped to shift the focus of the discussion, at least for a few days. And so I say, thank you, Mr Romney.


James Zogby is the president of the Arab American Institute

On Twitter: @aaiusa

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