After the Arab Spring in Palestine

Contesting the Neoliberal Narrative of Palestinian National Liberation

Over the past year, as Arab peoples in surrounding countries erupted in protest against dictators, security regimes, and failed social and economic policies, the Palestinian people living in their occupied homeland have remained quiescent. Neither have mass protests targeted the Palestinian “regime’s” policies or negotiating performance, nor has resistance to Israeli occupation escalated or taken more effective forms.

A Palestinian mother and daughter hold a sign with the flags of Tunisia, Egypt, Libya, Yemen, and Palestine with the question in Arabic: When?

In contrast to the turbulence and revolutionary potential of the Arab Spring, has neoliberal ideology, through its economic policy content, created a Palestinian constituency for normalcy and risk aversion that could hold back progress in the struggle for national liberation? In exploring the impact of recent neoliberal economic policies of the Palestinian Authority (PA) on living conditions and popular political consciousness, the burning question is whether these have succeeded in creating a people willing to resist encroachments upon their material gains and the liberal way of life.

Intuitively at least, the eventuality of a neoliberal complacency seems unlikely, if not absurd, for a people struggling for liberation from a regime of prolonged Israeli settler colonialism. Any informed observer cannot but be cognizant of the ravages on social fabric wrought by neoliberal policies in many countries, including within the neo/post-colonial range of experiences. To the extent that the fallout from the world economic crisis may evolve into a backlash that targets neoliberal policies and their impact globally and in the region, even if not necessarily their legitimacy, the need to elaborate a relevant critique in the Palestinian context becomes compelling.

This leads to a re-examination of conventional Palestinian patriotic wisdom. This “consensus,” discursively derived from Marxist revolutionary theory, holds that the Palestinian struggle has yet to reach the “stage” of national liberation, the PA “self-government” notwithstanding. The “national project/program,” led so far by a broad coalition of a national bourgeoisie and salaried middle class, camp-dwelling refugees, rural peasants and urban workers, has been traditionally invoked to postpone or subordinate pressing social agendas within Palestinian society by prioritizing independence and statehood. I enquire as to whether the horizontal range of pending Palestinian social equity deficits (youth, women, workers, farmers, depressed regions, etc.) might yet form a new basis to revive a twin struggle for national liberation and social emancipation in this new (Arab) decade.

A Shifting Palestinian Constituency for Neoliberalism

Seemingly disoriented by the changing regional landscape and the unexpected legitimization of political Islam, PLO political and diplomatic moves have become increasingly tentative and, indeed, contradictory. Over the past year, the PLO moved seamlessly from the announced “completion” of a two year “state building” project in the West Bank to an inconclusive national reconciliation process with Hamas in Gaza, to an international diplomatic “state-recognition” campaign in the UN that was self-aborted just as it was being launched. Most recently, the PLO engaged in an abject return to failed “exploratory” negotiations with Israel. Today, with its ammunition apparently spent, the PLO appears hard put to achieve the national reconciliation and unity that is widely considered a prerequisite for any progress in any direction.

The Palestinian national liberation movement appears weaker than at any time in the five decades since it was launched. It is hamstrung by Israeli occupation, donor funding cut threats, Arab governments’ and peoples’ distraction with the ongoing uprisings in the region, not to mention growing Palestinian disgruntlement with tight living conditions and weak leadership. New forces loom on the horizon, especially an emboldened Hamas whose Brethren are assuming power around the region, but which is also experiencing its own crisis owing to the rapidly transforming regional landscape and recognition that its governance achievements are mediocre, at best.

Of more recent genealogy, a diffuse, more youthful coalition of social forces has entered the scene. They are inspired by and learning from the unfolding revolutionary turmoil among their own young Arab “brethren,” unencumbered by the legacy of PLO factionalism and generally resistant to appeals to national unity under the “Leader” and the ruling party. They could not care less about the supposed gains of twenty years of polite Oslo politics and are singularly unimpressed by their elders’ claim to have kept the flame of national liberation alive.

Yet this apparently “unorganized” movement seems to be testing the waters, uncertain whether strategies should target the PLO or Israeli occupation, or both, with demonstrations one day outside the Muqata’a (PA headquarters in Ramallah) and on another day “Freedom Riders” challenging the Israeli occupation regime. This movement has yet to reconcile itself with the irony that the mass of Palestinian (poor, refugee) youth are already “factionalized,” street wise and have been long mobilized by the PLO leadership and act separately from the newer youth groups.

Yet these are not the only protagonists in the emerging Palestinian socio-political stand-off. We should not forget the broad swathe of public opinion and material interests linked to maintaining the status quo, either fearful of what change may bring or simply unbelieving in the possibility of positive change. The latter include the Hebron importer who does not want to lose VIP access to Israeli ports, the PA employee in Ramallah who does not want to lose the monthly paycheck needed to cover the housing mortgage, the village worker dependent on the construction job in the nearest Israeli settlement to be able to refill the newly installed pre-paid electricity meter, not to mention the PLO veteran from Amman 1970 and Beirut 1982 who has seen it all go wrong too many times before.

Fattened by a PA governance mode, especially since 2005, that consists of a rich menu of neoliberal social values and economic policies, security-first and the rule of law and normalcy, this Palestinian “silent majority” is not going to be easily persuaded or prodded into any misguided Palestinian Spring. Even if they are not consciously engaged in neoliberal advocacy, they constitute, perhaps unwittingly, a solid constituency for not altering the status quo. One indebted “citizen” summed it up well when speaking to a Los Angeles Times reporter: “Now that I have all this responsibility on me, my main concern is stability,” he said. “I don’t want to see anything happen that might stop my paychecks.” Such self-interested complacency highlights the distinctive nature and impact of neoliberalism, which can at once project an open, forward-looking governance agenda while entrenching conservatism as regards the diminished role of the state vis-à-vis the primacy of the market and property rights.

Simply put, awaiting national liberation and without a mobilization toward that end, many Palestinians seem willing to coexist with, if not defend, the lifestyle under occupation to which they have become accustomed. They may not sense the implications that the embedment of neoliberal values in Palestinian minds and hearts implies for the struggle for national and social emancipation. But in the wake of a second, militarized and failed intifada, most of those living under occupation and PA administration meekly have accepted, if not embraced, the limited focus of the PA on “self-improvement” that has overwhelmingly defined the Palestinian reform and governance narrative for the past five to ten years.

Simultaneously, many Palestinians also remain wedded to the premise that only after national liberation can struggles for democratic representation and social justice proceed apace. This presumes – or does not challenge head-on – the need for obedience to a national liberation leadership and the supremacy of its definition of “national interests.” There has been a clear public acquiescence with the PA leadership’s demand for improved “self-governance” in the post-2005 period. But this was largely conditional (in public reasoning) on a resolution sooner rather than later of the national question, amounting to a sort of Palestinian national/social contract. This “demobilization” of a militant popular resistance movement into a body of compliant and entitled “citizenry” is a familiar reminder of how, in other places and epochs, pre- and post-nationalist leaderships successfully delayed accountability for social or political governance results.

The confluence of the moment between the unfulfilled national self-determination aspirations of the Palestinian people, the increasing audacity of the occupying power, the emerging social and economic transformation agenda in the region, and, the growing popular contestation of the PA regime all provide rich material for reflection on the possible ingredients and shape of a Palestinian Spring, if indeed one is in the making.

PA Neoliberalism Surges Past the Finish Line

In our work published in the Journal of Palestine Studies a year ago, Sobhi Samour and I attempted a first assessment of the progress made and risks engendered by PA neoliberal economic policymaking under prolonged occupation, which have intensified under the current regime. Since 2005, the PA embarked on a series of post-intifada, post-Arafat institutional and policy “reforms” targeting security and rule-of-law measures, enhanced public finance transparency and efficiency, and the provision of improved public services and utilities. In doing so, the PA followed Washington Consensus conventions that severely limit active state intervention in the economy beyond the protection of property rights so as to release the full potentials of the market. In the Palestinian case, this is particularly curious, as if too much government regulation or fiscal preponderance was the real ailment of the Palestinian economy under occupation.

The zeal, indeed exhibitionism, with which the PA pursued these reforms, coupled with the international attention they attracted, implied that the PA needed to successfully navigate the two-year homestretch to freedom through its “state-readiness” program. In line with some of the more dated World Bank notions about good governance, it became commonsense that only by being certified as institutionally ready for statehood by the World Bank, IMF, UN and the AHLC of donors could parallel political negotiations possibly lead to an actual Palestinian state.

Within the constrained economic policy-making space available to the PA, the only macroeconomic policy option it really ever has had was to stimulate aggregate demand through public expenditure fuelled by increasingly high levels of international aid. Ironically, while the PA program aspires to be a model of “sound” neoliberal policies, within the confines of the Paris Economic Protocol between Israel and Palestine it is by definition unable to pursue the full range of such policies, except by tracking Israeli economic policy. Nevertheless, PA trade policy, such as it is, aims to build an economy even more liberalized than Israel’s, with lower tariff and other barriers to trade and financial flows.

The dedication of the PA to liberalization is undeniable, and earned fulsome praise in 2011 from the international financial institutions. But even along this trajectory, success in the full pursuit of such policies is by no means assured. Even if the PA had assessed the possible economic impact of its policies when designing and launching them, it is dubious that they could have realistically predicted how such measures might play out in a distorted, fragmented and occupation-throttled economy. In such a laboratory environment with unstable substances, untried formulae and uncontrollable internal and external pressures, any number of things could go wrong from the perspective of IMF-inspired prescriptions for fiscally vulnerable developing countries.

Needless to say, the most uncontrollable substance in this peculiar situation, Israeli occupation, is the elephant in the room of the achievements of Palestinian neoliberalism. In its latest move, Israel waded into the PA “state-readiness” scoring game with its report to the March 2012 AHLC meeting by denying its rating, citing stalled growth in 2011, fiscal weaknesses and aid dependence. Not surprisingly, Israel insists on yet “further reform in order for the PA to meet the standards of a well-functioning state.”

Looking at recent economic developments, it appears that indeed something is going awry. Policy-makers appear to have reached the end of their tether, except in proposing yet further austerity. Their core constituencies are increasingly questioning the peaceful coexistence between the promise of national liberation and the neoliberal life, while in reality neither is assured. As for the important global function of neoliberal policies, namely to “level the playing field” of the economy to enable the free movement of financial capital, the PA project is hardly significant in regional or other terms. Hence the sustainability of financially profitable capital accumulation in the Palestinian conditions is dubious, even if for the moment the Palestinian Securities Exchange is reportedly a bright performer compared to other regional Exchanges badly shaken by the Arab Spring.

The PA completed its two-year, institution-readiness program in September 2011 with no state in sight. Facing an apparent breakdown in negotiations, the PLO was challenged by growing public dissent and, in terms of its own strategy, a lack of clarity as to where to go next. This “finish line” was crossed without the Palestinian people actually being any freer than they were two, five, or twenty years ago, even if for some in the West Bank the “quality of life” under occupation has never been better.

The PA has been quick to blame Israeli intransigence and the failed political process, not to mention Palestinian internal divisions, for not delivering the results that would have allowed it to morph into a new state. PLO officials might admit in private that they had no serious expectations to the contrary and were hoping to buy time with the state-readiness program so as to prolong the “peace process.” But few are willing to recognize the extent to which five years of “reform” have locked the PA into a sub-contracting role for a continuing, increasingly sophisticated and cost-effective occupation regime.

Apparently the PA will not accept that its economic policies should be derailed just because there is a political stalemate (or collapse). Nor, judging from Jordanian, Arab and donor responses, does it appear that the PLO will be allowed to consider downgrading the PA, even if it wanted to. In the past months as the PLO diplomatic campaign came to a halt amidst looming donor financial sanctions, and as Israeli colonization intensified, the PA oddly enough opted for further deepening of its neoliberal measures in the most narrow domestic policy area that it could tinker with, namely fiscal austerity measures.

The Discrete Charm of Fiscal Austerity and
Structural Reform under Occupation

Two recent austerity measures are especially indicative, because of both their policy content/impact and the popular response they provoked, namely the revised Income Tax Law, and the plan to reduce the public sector payroll by early retirement of the oldest segment of the PA civil service. The Law was criticized for poor design, inadequate public consultation, and possible adverse social impacts on marginal groups, but mainly for the perceived tax burden it would have created for small and large businesses alike. This Law is notable for being the most significant, if not first-ever, economic measure since 2005 to be rejected by public outcry. In January, the PA was obliged to announce its suspension and reformulation after a “public dialogue.” While a parallel domestic austerity plan to abolish thousands of public sector posts through early retirement was considered, anticipatory public opposition led the PA to announce that it was never seriously studied. Meanwhile, a series of sarcastic, graphic postings and humorous songs on Palestinian youth internet/facebook networks depict a series of accusations against the PA encompassing grievances about Ministerial privileges, urban and rural poverty, runaway prices, and political dysfunction.

The strong public reaction to these proposals cannot be simply ascribed to populist discontent or frustration with lack of progress in the political process, although these are not negligible factors. Some public criticism may have confused the increased burden from taxation with the separate problem of a Palestinian inflation rate that is systematically higher than in Israel. But across the middle-to-low income spectrum, there are signs of a looming socio-microeconomic crisis in the Palestinian economy that mirrors its chronic macroeconomic crisis. Inflationary pressures, conspicuous consumption, imports fuelled by stable income expectations, and rising household indebtedness are combining to squeeze many households. For now, that is the most clearly “evidence-based” factor fuelling discontent that goes beyond PA politics.

For example, the most common indictor of “financialization” of an economy (or the preponderance of the financial economy over the real economy) is the ratio to GDP of credit extended to the private sector. In the case of the PA, this ratio has grown to an all-time high of twenty-nine per cent in 2011. While such a ratio is actually several points above the average for comparable economies, it is well below the critical level (of over 110 per cent) that is the threshold over which financialization is considered to become destabilizing. However, with Palestinian private credit growing annually by thirteen per cent, the critical comparative figure to highlight is that of real per capita GDP, which has been growing at two per cent annually since 2006, or less than one-sixth the growth of private indebtedness. No wonder the average household is feeling the pinch.

Now that the proverbial chickens of the past five years’ private consumption boom are coming home to roost, the official PA narrative is explaining that it is payback time for past excesses, while the sound of international cheerleading has somewhat subsided. The PA is faithful to neoliberal expectations, evidenced by the Prime Minister’s statement that the government cannot be held responsible if people irresponsibly incurred debt for consumption loans that they cannot repay. But if the PA’s repudiation of its most provocative austerity measures does not in itself mean a roll-back of Palestinian neoliberalism, it at least suggests that its policy thrust has reached the limits of the envelope within which it has been contained since Oslo.

Palestinian banking sector credit aggregates, 2006-2011. 2006-2010 data from Palestinian Monetary Authority. 2011 data based on author estimates.

Popular contestation, a fledgling business class chafing at the new tax burdens, and critical review by some experts together underscore the risks of pursuing further belt-tightening in order to attain an impossible fiscal balance and aid-independence under an occupation which is constantly undermining the fabric of society and the economy. From a developmental angle, this is especially futile as the occupation regime by definition negates sustained growth or development and sits astride the most important channels of potential public revenue (from external trade). From the perspective of national liberation, such a PA policy effectively plays party to Israeli “economic peace” and ensures maximum extraction of Palestinian “national” resources to share the costs and administrative burdens of administering an open-ended occupation and orienting Palestinian economic policy (and most debate) around that function. This is the effective, if not intended, outcome of Palestinian neoliberalism.

Looking at the broader implications of the now abandoned PA structural reform measures, pushing through the income tax law would have meant a major shift in PA business-friendly policies toward a private economy hardly able to cope as it is. And had the PA gone ahead with public job cuts it would have has to abandon the one macroeconomic policy goal that it could target, and did with some success since the second intifada, namely sustaining aggregate demand through payroll stimulus. So the successful contestation of these measures represents a small victory for common-sense economic policy and recognition of the real limits of any “policy-making” under occupation. Despite the PA’s uncertain policy making performance, it can only be hoped that this episode may have had some sobering effect on the plans of Palestinian “reformers” and their international sponsors who have helped perpetuate the suspension of disbelief that the PA economic program amounts to.

States of Liberalization and Stages of Liberation

It is increasingly apparent that continuing “embedment” of neoliberalism in Palestinian society and economic thought has effectively created a real constituency willing to live with Israeli “economic peace.” One Arab Spring after we first explored these questions, I would contend that recent economic developments have accentuated inherent contradictions upholding the PA program and Palestinian national alliance sustaining it. The first cracks in the PA’s external image may be showing in an economic policy package that has run out of steam, if not begun to reverse.

Certainly, the PLO faces critics on all sides over political paralysis/disunity and its inability to deliver a national solution through negotiations. But there is little concrete evidence that the broader liberal philosophy and lifestyle which frame its economic policies is being questioned. Nor are the financial and commercial interests and joint security regime with Israel that underpin it threatened by popular discontent. Indeed as my co-author has stressed to me, protests notwithstanding, it might still be the case that many believe in market primacy, define success as working in a bank in Ramallah, think that the poor contribute inadequately to their electricity costs, that drinking an expensive coffee in a Ramallah café is a sign of status, or that kids from refugee camps should be barred from selling their fake CDs in restaurants and night-spots.

However, I find it difficult to see how, or why, the broad socio-political alliance that sustained the PLO’s strategy for the past five years would or should remain bound by the comfortable narrative of “reform and institution-building” that replaced the appeal to patriotism practiced by the PLO under Arafat. For several decades, that alliance more or less successfully married the interests of private Palestinian capital, labor and public policy within the broad pluralist political system of the PLO and its national/social contract. But today that consensus cannot be taken for granted as the Palestinian social fabric is stretched to its breaking point. The confluence of class and political interests the PLO symbolized cannot but be undermined by growing PA economic policy incoherence under pressure from popular and corporate dissatisfaction.

Furthermore, Palestinian history tells us that no growth or prosperity bubble has ever been sustainable. Since the 1930s, popular resistance to colonialism, surges of national self-determination, or the impact of economic shocks have repeatedly forced a retreat from “normalcy.” Notwithstanding neoliberal successes in neo-colonial situations elsewhere, its victory is not necessarily imminent in Palestine. This is not only because of the pending challenge of decolonization but also, I believe, because its core constituency never really coalesced in its favor, and could not attain “class consciousness,” so to speak.

The PA strategy of state-building by policy and in lieu of resistance/liberation encouraged a focus on “domestic” concerns of “citizens,” rather than the “national” concerns of “militants.” This constitutes an important deviation from the manner in which PLO hegemony was sustained since its inception. That entailed nurturing a broad consensus that the imperatives of an overarching national liberation project justified tolerating compromises on, or at best lip-service to, deeper social transformation and economic development agendas. Ever since the 1970s when Palestinian Marxist factions flew red flags from minarets in Jordan, the PLO mainstream maintained that until completion of the “stage of national liberation,” social conflict must be postponed for the sake of national unity. And in the earliest stages of the struggle against colonialism before 1948, traditional nationalist elites were at odds with the Palestinian socialist and labor movements which gave national and social agendas equal footing.

“Domestication” of Palestinian national politics was underway well before the Arab Spring, indeed beginning with Oslo, wherein socio-economic priorities acquired increasing significance alongside the struggle for national liberation in public opinion. Yet it is too early to discern if popular discontent implies a repudiation or abandonment of neoliberalism or simply an attempt to create a kinder, gentler, reformed version. In Palestine, the potent mixture of socio-economic conflict and a repressed aspiration for political empowerment and national self-determination could lead developments either way.

The possibility should not be dismissed that a broad public would opt to cling to the PA way of life and its entitlements instead of risking a perilous resumption of (even non-violent) resistance or even national reconciliation. At this historic juncture, a fractured and exhausted national movement stands at the precipice of possible reconstitution in the wake of an announced death of a morbid “peace process” or, alternatively, disintegration and collapse under the weight of settler colonialism. In the wary and time-tested perceptions of most Palestinians, preserving the status quo is inevitably the preferable option.

But can Palestine remain immune to the contagion of change sweeping the region, and will a younger, impatient and exigent generation simply defer to the “national leadership” in defining its agenda of social change and anti-colonialism? It would seem intuitive that the weight of the Arab Spring would only hasten and shape events, if not through the channels of its revolutionary undercurrents, then through the influence of the “counterrevolutionary” forces in the region and internationally.

So, with the achievements (in hearts and minds at least) registered by Palestinian neoliberalism, the diversion of public attention from occupation to inflation, taxation and indebtedness, and the fracturing of the national/social contract, a new configuration of forces ensues. Could this open a path to a new phase of social and economic contestation of the PA regime that is as valid, compelling and urgent as, if not indistinguishable from, resistance to occupation?

As early as V.I. Lenin’s endorsement of the national struggles for self-determination by colonized peoples, through Mao’s strategies of alliances with nationalist forces, to the Vietnamese and African experiences of broad anti-colonial fronts, national liberation struggles always have entailed coalitions between different class forces and their political formations. Depending on the strength of the national bourgeoisie (and the degree of its common interests with colonialism), it usually has assumed a more or less prominent role in active leadership of the liberation movement and secured for itself a significant (if not dominant) role in post-independence periods.

Left to right: Basel Aql, Hasib Sabbagh, Yaser Arafat, and Walid Khalidi. Beirut, 1978.

The Palestinian national liberation movement appears to be no exception to that broad trend. Without going into the historic evolution of the social alliances that sustained Palestinian nationalism over the past century, suffice it to say that since 1948 at least one major shift occurred. After the Nakba the leadership of the Palestinian national movement, hitherto held by the urban notable elites and proto-capitalist class with a wide peasant and working class constituency, passed to a new generation. Since the 1960s, the PLO breed of refugee/middle-class nationalist militants, intellectuals and guerrillas allied with a “national bourgeoisie” dispersed between Palestine and throughout the region and beyond, together built a legitimate constituency for most of their existence.

In the analysis of the preeminent narrator of neo-colonialism, Frantz Fanon in his Wretched of the Earth, the “national bourgeoisie” is little more than a “national middle class” with an “historic mission: that of intermediary.” In the Palestinian case, these would include strata such as Fanon’s “university and merchant bourgeoisie,” “army and a police force,” “the young national bourgeoisie,” “the party,” a “profiteering caste,” a “native bourgeoisie,” “honest intellectuals,” and a “bourgeoisie of the civil service.”

In Fanon’s view of this parasitic, non-productive and generally “useless” bourgeois/petit bourgeois class elaborated in the “Pitfalls” chapter, there is no particularly important role for domestic and expatriate industrialists and masters of finance. Their weak industrial and technological base and “comprador” links to global capital determine their objectively hostile position toward the national liberation project, even if they may be willing to strike an accommodation with it. In a departure from Fanon’s typology however, in the Palestinian case, these “diaspora millionaires” are not hostile to national liberation; indeed they are important players who always have been closely aligned with PLO economic interests and political program, underwritten it financially, and invested in productive sectors and development in Palestine. Combined with the other strata of the national middle class, I would describe this social formation as the core potential constituent of a Palestinian “neo-colonial, national liberalism.”

This strange Palestinian brew implies a hitherto unknown hybrid that interweaves a Fanonist scenario of post-colonial revolutionary failure (which usually takes place post-independence) with an unachieved national liberation project (which usually is not mortgaged to neo-colonialism). For example, the (usually) post-colonial “de-mobilization” of the previous militant leading cadres vividly described by Vijay Prashad with respect to the Algerian experience in The Darker Nations, has been pursued with vigor by the PA since 2005. A new “entrepreneurial” technocracy has taken the place of PLO and Arafat-era PA administrators, disinheriting the PLO military cadres whose “struggle” since the 1960s made the PA self-governance project possible. But such a deformed neocolonial governance pattern has not been witnessed while de-colonization is still unachieved or in the absence of sovereignty. In that regard, Palestine presents a unique situation.

The Palestinian National Bourgeoisie: Progressive? National?

Throughout the Arafat era, the “national front” shared political decision making powers and co-managed, more or less, “national wealth” to the extent that such a public good was nurtured, mobilized or otherwise created by the PLO. From the taxation levied by the PLO on Palestinian workers in the Arab states since the 1970s, to the mobilization of the expatriate Palestinian capitalist classes in the 1980s and the generous sharing of rents from public utilities franchises and selective commodity supply monopolies under the PA in the occupied territory since 1994, there has usually been a common ground, material interests and good “national” political sense for such an alliance.

Such a political-economic consensus has always united the material forces of Palestinian capital and the national bourgeoisie with the national liberation movement. The latter has historically mainly represented the dispossessed and deprived masses of Palestinian refugees in exile, peasants, urban poor and a growing middle class of educated professionals. To the extent that a recognized and re-legitimized PLO leadership might still command political influence among the Palestinian people inside and outside Palestine, this national front could yet survive. The rise of a Palestinian Islamist national liberation movement which is bonded together with faith and tradition may appear to have rendered such an alliance obsolete. However, the recent governance experience of Hamas in Gaza suggests that the movement’s alliance with its own capitalist support base inside Palestine and in the region also has been vital to its economic and financial survival. Indeed it entails a “national front” of a greener color perhaps, but nevertheless effectively comporting with the tradition of the secular national liberation movement.

In his timeless indictment of the (inevitable) treachery of the post-colonial national bourgeoisie, Fanon defines its essentially middle class traits. These include its readiness to abandon the social emancipation goals of the pre-independence stage, the scramble to assume the functions vacated by the colonial bourgeoisie and to apportion national resources among party, security and affiliated elites, the lack of indigenous productive power, and its ultimate reliance upon and integration with colonial capital. I would not be the first (and indeed I am a latecomer) to argue that this typology became evident in the post-Oslo configuration of power that has been entrenched in the past years.

As Fanon bluntly puts it:

“The national bourgeoisie of under-developed countries is not engaged in production, nor in invention, nor building nor labour; it is completely canalized into activities of the intermediary type… The psychology of the national bourgeoisie is that of the businessman, not that of the captain of industry…. Seen through its eyes, its mission has nothing to do with transforming the nation; it consists, prosaically, of being the transmission line between the nation and a capitalism, rampant though camouflaged, which today puts on the mask of neo-colonialism… In the colonized territories, the bourgeoisie draws its strength after independence chiefly from agreements reached with the former colonial power…”

Today not only do PA economic policies fail to elicit the public acquiescence enjoyed in the past, but the PA is fiscally bankrupt and the PLO appears incapable of leading or unifying its ranks. This threatens the cohesion of the national bourgeois alliance as a whole. Of special concern is whether the neoliberal project in Palestine has advanced as if it were operating well into a “post-conflict” phase, while settler colonialism has reached so deep, that there is no more “nation” to liberate in the traditional understanding. Instead, are other forms of (post)neo-colonial struggles in order?

In a moment of rosy-scenario reverie, let us imagine that indeed somehow a Palestinian state had been willed into existence by the grace of good governance and a lot of Israeli goodwill. In a converse, if equally bold leap, let us accept that Fanon’s downside, or “pitfall,” analysis of Third World post-colonial governance experience accurately depicts how history has played out in most cases. And let us concur that we have no evidence that Palestine is an exception, despite not actually having a state. From this vantage point the PA and its economic policies appear like just another failing post-colonial development governance experience, bereft of the usual vestiges of formal independence that most neo-colonial states elsewhere have attained. Indeed, with neoliberal medicine as a guide, the PA has evolved quite a way along the plane of post-liberation, middle-class, capitalist governance in all but the usual reality of sovereign statehood.

And that is where we realize that in fact the dream is a nightmare: More than ten years after Camp David II and twenty years after Madrid, indeed thirty-five years after Camp David I, the worst possible conditions for prolonged neo-colonial dependence have been created and indeed flourish. By virtue of its neoliberal program and its inability to lead a struggle that delivers independence, the PLO and its allied national bourgeoisie have effectively broken the “national-social contract” and, in a sense, betrayed their historic role.

It might well be argued that owing to the inherent flaws in the fabric, interests, and wealth of the national bourgeoisie in post-colonial countries, there can be no “progressive” nationalist bourgeoisie in any case. Going further, Alec Gordon and Radhika Desai have insisted that there is no empirical basis for a credible theory of its leading role in an independence struggle, effectively repudiating the core Leninist assumptions. But what we do know is that there are a range of alternative anti-colonial experiences – from those failed revolutions described by Fanon (and aptly analyzed by Prashad in the Algerian context), to those (e.g., Vietnam, southern Africa) where national fronts were communist-led.

In more nuanced outcomes as in countries like Brazil, Argentina, South Africa, India, China, and other “emerging economies,” there it may be argued that somehow the worst pitfalls of neo-colonialism have been passed or avoided. A tentative alliance (and social contract) between capital, labor, and the state has been maintained since independence, however far they may still be from the promises of development that non-alignment and the rise of the so-called “Global South” have entailed.

No doubt, mobilizing a broad national front in a relatively short war of national liberation from foreign, non-settler, military occupation as in the cases cited above is not as great a challenge as sustaining a movement for national self-determination and de-colonization over a century as in Palestine. And even with the best intentions and policies, success in building a productive, self-reliant and socially equitable economy in today’s globalized, financialized and still largely neoliberal economy is not an assured thing.

Certainly it should not be assumed that the Palestinian national bourgeoisie will discover its inner progressive tendencies at this late date and reinvigorate a flagging national liberation struggle. But I cannot yet perceive on what “consensus” the national alliance and its “leading class” can credibly and conscientiously sustain engagement with an increasingly incoherent PA neoliberal project in the absence of national liberation.

While the (former) path of reassertion of its “historic mission” could still ensue in case of a national reconciliation that reinstates the primacy of ending colonial occupation, it would not necessarily entail a turn away from neoliberalism. Indeed, sharing the spoils of Palestinian financial and political power is central to the Fatah-Hamas dialogue. On the other hand it is not implausible that we would continue to witness a gradual weakening of the hold of the PLO and “nationalist politics” on public debate and expectations, and even that of neoliberal goals on economic decision-making.

In its place, another discourse and another set of struggles for social justice and economic equity could find greater resonance and emancipatory potential than the flailing and failing national liberation narrative. There is little doubt that distinctive social and economic demands of Palestinian workers, women, youth, unemployed, disadvantaged and marginalized sections of society will become increasingly mainstream in the broader regional context because of the Arab Spring. Similarly, resistance to unjust, misguided or poorly designed PA policies, neoliberal or not, could acquire legitimacy as part of a broader struggle to mobilize the Palestinian people in determining their future, without demeaning confrontation with occupation and colonization.

Bottom line: all bets are off. •

The views expressed here are those of the author and do not necessarily represent those of the United Nations secretariat.

A brief summary of this paper was presented at the SOAS Palestine Society Conference “Palestine and the Uprisings” on 17 March 2012. These reflections have benefited from an ongoing dialogue with a number of scholars and practitioners of development whose encouragement the author gratefully acknowledges. This article originally published on the website.

Raja Khalidi is a Palestine refugee and U.S. citizen, originally from Jerusalem, who has lived mainly in the Middle East and Europe. He currently serves as Senior economist with the United Nations Conference on Trade and Development (UNCTAD), Geneva.