Mitt Romney, the Republican presidential candidate, recently stirred up controversy when he said the economic gap between Israel and the Palestinian territory derives from Jewish culture and the “hand of Providence”. He was criticized for ignoring the facts – for example, that Israel is a sovereign, independent state while Palestinians in the Occupied Territory live under military rule of one kind or another. It’s worth mentioning that the Palestinian economy itself is in the process of splitting in two (Gaza and the West Bank) and there is also a significant gap between the two areas. The gap proves, to those who require more proof, that the state of the economy reflects the political and, in this case, military reality and, to no lesser degree, the extent to which people and goods are able to move. So, for example, the Kerem Shalom crossing was closed yesterday following an attack on Sunday. Kerem Shalom is the only crossing that allows goods to be transported into and out of the Gaza Strip. Rafah Crossing and the tunnels were also closed until further notice. Events like these have a dramatic impact on Gaza’s economy.
This graph shows the changes in Gross Domestic Product (GDP) per capita in the West Bank and the Gaza Strip from 1994 to 2011. If Romney’s explanations for the gap between the Israeli and Palestinian economies are correct, the changes in the graph represent shifts in Palestinian culture and in God’s will. Perhaps it might be useful to look at what other conditions were in place over that time period that may have influenced the economy; things like political processes, violence and restrictions on movement. We see in the graph evidence of the direct link, which few dispute exists, between freedom of movement and economic development.
Take, for example, the sharp decrease in GDP per capita in 2000, following the start of the Second Intifada and tightened restrictions on movement in Gaza, the West Bank and between the two areas. In 2002, the GDP per capita began to rise again, continuing unabated in the West Bank, while in Gaza it started decreasing in late 2005 and dropped off more sharply following the 2007 Hamas takeover in Gaza and the imposition of the closure there. In 2010, with the lifting of some aspects of the closure, the GDP per capita in the Strip began slowly climbing once again. True, divine intervention is still preventing it from approaching the level of GDP per capita in the West Bank, but maybe if the ban on selling goods from Gaza in the West Bank and Israel were lifted, this too could come to