Romney Versus the World Bank

Republican candidate Mitt Romney's visit to Israel was marked by a series of largely boilerplate comments about the special relationship between the United States and Israel. And, like Prime Minister Benjamin Netanyahu, he almost entirely avoided the question of peace and the two-state solution, preferring to focus on the threat posed by Iran's nuclear weapons. In his speech in Jerusalem, the word “Palestinian” did not once cross his lips.

But certainly Romney's most striking remark, from a Palestinian point of view at least, came when he spoke to the in-crowd.

Romney explained to some 40 wealthy donors at Jerusalem's King David Hotel that he was putting the economic puzzle together:

As you come here and you see the GDP per capita, for instance, in Israel which is about $US21,000, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality.

Not only did Romney get the economic figures entirely incorrect—Israel's per capita GDP is about US$31,000 while the Palestinians' is at US$1,500—he attributed this difference to “culture.”

Romney reportedly told the group—which, by the end of the night had given him around $1 million for his campaign—“Culture makes all the difference. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things.” He also bizarrely attributed Israel's relative prosperity in contrast to Palestinian impoverishment to “the hand of providence.”

Romney and his team would be well advised to consult the latest World Bank report on the state of the Palestinian economy released July 25^th of this year. The report emphasizes the need for the creation of a more robust private Palestinian economic sector and education reform and named the major constraints to private sector activity as tight Israeli restrictions on movement and resources. It’s quite straightforward:

The Government of Israel’s (GOI’s) security restrictions continue to stymie investment…Despite the easing of some [Israeli] restrictions, most of the constraints on movement of people and access to resources have remained in place, constraining investment and productivity growth.

These restrictions, along with a dependence on international aid are a function of not providence, but, well, the occupation. The report notes that the occupation “has skewed the economy towards the public sector and non-tradables."

The bottom line: “The major constraints to private sector activity are the tight Israeli restrictions, and growth will not be sustainable until Palestinians have access to resources and are allowed to move freely.” To be sure the report notes that there is much the Palestinians need to do, particularly in shifting education reform to produce a more dynamic and employable workforce geared towards a robust private sector. But it also makes clear that the development of such a sector depends even more on the easing of Israeli restrictions that are the consequence of its occupation policies.

So much for “culture” and the “hand of providence.” It's not surprising that Gov. Romney went to Israel to pander to the myriad American constituencies that are committed to uncritical support for Israel. But it's indefensible that he would seek to blame Palestinian impoverishment entirely on Palestinian culture and policies while ignoring the obvious, inescapable and undeniable onerous effects of the occupation, which he did not in any way mention. These have been identified not only by the most recent World Bank report but by all serious investigations into the state of the Palestinian economy as central to its most pressing problems.

Denying and ignoring the occupation has become a parlor game in much of American political culture, and an active, powerful political movement in Israel that seeks to establish a greater Israeli state. There is no doubt that if Romney wins the presidency, his policies will reflect traditional American approaches to two states and not, whatever it may mean, “the opposite of what President Barack Obama has done."

But seeking to curry favor with Israel and its American allies by gratuitously insulting the Palestinian people and ignoring, and in effect denying, the reality and effects of the occupation Romney does no favors to Israel or the Palestinians, and certainly doesn't enhance the national security interests of the United States. Don’t try your hand at foreign policy without doing your homework first.