The Gaza Strip: The Political Economy of De- development.

Reviewed by Ibrahim G. Aoude

This timely work is a thorough indictment of Israel's destructive policies toward indigenous Palestinian culture and society in the Gaza Strip. Roy's work falls into four parts. Part one, comprising four chapters, gives a flavor of the Gaza Strip under Israeli occupation, especially its economic, social, and political structures, along with a useful comparison between the Gaza Strip and the West Bank. Roy's discussion entices the reader to go on to chapter two where she situates the study in the proper historic context of Palestine's development, in order to expose nefarious British and Zionist colonial policies that created two separate economies: a well-organized Jewish sector; and a peripheralized "non-capitalist" Arab sector. Zionist political objectives had primacy over its economic interests. The slogan, "land over people," summarizes Zionist policies during the British Mandate and after.

Chapter Three divides the discussion of political and economic developments under Egyptian rule into two distinct periods: 1948-1957; and 1957-1967. Two-thirds of the Gaza district became part of Israel when the Gaza Strip was created as a result of the 1949 Armistice Agreement. Israel violated that Agreement by expelling a quarter of a million people from southern Palestine most of whom became refugees in the Gaza Strip. Egyptian centralized military rule offered nothing important to develop Gaza. Later, UNRWA set up relief programs for the refugees.

The second period witnessed the formation of student, trade and women's unions. The Gaza Legislative Council leadership became Palestinian and the Palestine National Union was formed. Increased political activity was also due to the creation of the PLO in 1964.

The economic discussion is more detailed. Roy provides an analysis of the special conditions in the Gaza Strip as compared to the rest of Palestine. Gaza was economically nonviable with a collapsed tax base due to the sudden increase in population. Although Egypt became more active in promoting Gaza's economy in the second period, it did little to alter the existing structures and had no long-term planning to change the status quo. Egypt's strategy was to keep Gaza's economy separate from its own. This constraint on Gaza's development largely explains the low productivity in agriculture, the largest single economic activity, and the neglect of industry. Further, employment had little to do with indigenous development imperatives, and, despite some growth, the economy remained dependent.

While underdevelopment was a clear consequence of Egypt's rule, Gaza has also suffered from de-development under Israeli occupation. Chapter Four discusses the political context of the occupation that rested on the strategic goal of "land over people." Evidence demonstrates how Israel's political policies made Gaza inseparable from Israel through the latter's control of land and water, its denial of any Palestinian political movement, and its fight against the guerrilla movement. Israel's building of settlements and eviction of Bedouins provide further evidence of this point. Despite all that, the Ganzans rejected Camp David because they saw that it reinforced Israel's political policies.

Part two, which comprises the central and most important part of the book, deals with the occupation and de-development. Chapter Five gives a very competent discussion of development theories and argues that Palestinian dependence has its own particularity that is also due to Israel's "land over people" strategic goal. Contrary to existing development theories, which emphasize the economic over the political, Israel's policies emphasized the political over the economic. This leads Roy to conclude that both modernization theory (espoused primarily by Israelis) and dependency theory (espoused primarily by Palestinians) fail to explain the Palestinian situation, especially Gaza's, under occupation.

The critique of both theories is interesting, particularly the discussion on the point of convergence of the two theories. "Paradigm exhaustion" (Kuhn), necessitates the creation of new truths, Roy argues. Having said that, her specific critique of the two existing theories vis-a-vis Gaza remains far superior to her general critique of dependency theory. For example, she does not mention that variety of dependency theory dealing with domestic structures of dependence (Bodenheimer and Dosantos). Her claim that she wants to give primacy to empirical data in construct theory is also claimed by both modernization and dependency theories.

Chapter Six details the book's central thesis and lays the ground work for discussing the economic context of the occupation. Policy roots of dedevelopment are as old as the idea of the Jewish national home (p. 135). The other side of the coin in this endeavor was that to "preclude the establishment of a Palestinian state, the government had to eliminate any foundation on which it could be built" (p. 136). In this regard, the contradictory goals of Israel's economic policies were to raise the living standards of Palestinians (to appease them and to co-opt their national aspirations) but to weaken simultaneously the indigenous economic base. Israel achieved this goal through pacification policies (evictions and denial of return to Gaza); normalization policies (control, not development) to link Gaza to Israel through job creation, trade and subcontracting; and, politically, through "nonpresence" ("the transfer of many administrative and social welfare responsibilities to local Palestinian institutions so that Israeli rule could be felt not seen" (p. 140)). Noninterference and open bridges also relieved political and economic pressures by having Palestinians implement Israeli policies and by giving Israel an opening to Arab markets.

Integration was the method to normalization and both provided the structural framework for Israel's economic policy in the Occupied Territories. Chapter Six demonstrates very well the dialectic of segregation through integration. Roy further argues, quite convincingly, that Palestinian policies complemented Israel's in the creation of de-development. The PLO assumed that development was neither attainable nor desirable. However, the Intifada, temporarily challenged de-development through sumud muqawim (resistant steadfastness) instead of simply sumud (resistance). But sumud muqawim was along factional lines.

Chapters Seven through Nine, the crux of part two, detail how Gaza's de-development occurred due to policies that may be conceptualized by expropriation and dispossession; integration and externalization; and deinstitutionalization. In chapter Seven, Roy demonstrates Israel's aims of expropriating Arab resources and making them available for Jewish use. Water, land, settlements, housing, and investment policies compromise an integrated, overwhelming effect in permanently dispossessing Palestinians of economic resources. Such dispossession occurred without compensation. Roy refers to the 1986 Gaza Plan that "reveals official Israeli thinking and strategies on a variety of critical issues that fundamentally remain unchanged in the Gaza-Jericho Agreement" (p. 162).

Water problems are both quantitative and qualitative (sewage seepage and salinity). They also impact heavily on other factors of production. Arab agriculture, which consumes more than 80 percent of Gaza's water consumption (allocated to Arab use), was effectively devastated. However, Israel's water policies were supportive of Jewish agriculture in Gaza. Water shutoff was also utilized as a form of collective punishment, especially during the Intifada. Roy proves that "[w]ater is part of the ideology of nation-building so central to Zionist thought and to its practical application, land settlement" (p. 174).

All Israeli laws pertaining to Arab land expropriation are in violation of the 1949 Geneva Convention. Land expropriation was central to strategic settlement planning, which also physically isolates Palestinian communities to prevent united Palestinian action or the formation of a Palestinian state. Land policies did not change fundamentally under Labor or Likud. These policies increased Arab population densities by displacing people. They also exacerbated the social gap "between the haves and have-nots in the Gaza Strip" (p. 182). Furthermore, "far from being a benevolent effort in the public interest, official refugee resettlement programs in fact represented just another form of dispossession" (p. 183).

Israel's expenditure (expressed in the ordinary budget) and investment (expressed in the development budget) in Gaza are other measures of expropriation and dispossession. The ordinary budget had hardly allocated expenditures for agriculture, industry, or water exploration. Arabs paid more in taxes than Israel expended on or invested in Gaza. The aggregate of these policies denied Palestinians their national identity. Dispossession represents "an attack on the internal capacity of a community to remain integrated, cohesive and resilient" (p. 199).

Chapter Eight speaks of integration and externalization as "compensation" by Israel for externalization and dispossession. Roy is clear, however, that this "compensation" is contorted and costly in terms of "structural dependence, sectoral disarticulation, and occupational reorientation" (p. 199). Roy sets out to discuss these costs and how they contributed to de-development through an examination of labor and unemployment, agriculture, industry, and trade.

A thorough analysis of labor and unemployment shows that the Gaza labor force serves Israel's economic interests with the result of eroding Gaza's productive capacity. Consequently, the lack of opportunity (menial work) and the immateriality of educational attainment to getting jobs, contribute heavily to the downgrading of skills in the labor force. Further, Arab labor became an institutionalized "caste structure in the Israeli labor system" (p. 216). This resulted in the further proletarianization of the Gaza work force and the deterioration of its society and economy. Whatever the economic "benefits" that Israel refers to in speaking of Gaza, they pale in comparison to the damage that this Occupied Territory has sustained. GNP indicators are not meaningful for measuring development in Gaza because they measure largely transferred resources. While Roy does not refer to them as such, she shows that opportunity costs do not justify Gaza's integration into Israel's economy. In fact, integration and externalization are forms of "expropriation and disinheritance" (p. 219).

Roy then discusses official Israeli strategies in agriculture and that sector's key characteristics and constraints in Gaza. Agriculture's growth from 1967-1977 was a result of strategies that linked production to Israel's technology and market. Sectoral growth was not due to structural reform. Growth of Arab wage labor in Israel eventually contributed to a decline in agricultural productivity. The decline was also due to factors such as dependence on Israeli markets, lack of finance, and inadequate infrastructure. Water, land reclamation prohibition, and tax policies were further constraints on agricultural development.

Industry, too, experienced several constraints that led to and further exacerbated its weak characteristics that included low levels of output, productivity and investment; and small markets. Industrial growth was in traditional industries and those complementing Israel's economy such as, textiles, food, and garages. However, textile production, for instance, eventually declined due to economies of scale enjoyed by Israeli firms. Subcontracting, the major source of industrial investment in Gaza, transformed industry into a free zone benefiting Israel's economy. Government policy was the major constraint that impacted other factors affecting Arab industrial development.

Finally, Roy's review of domestic resources and uses reveals measures of de-development, most notably consumption that has usually been greater than GDP in value. More importantly, perhaps, was that improvement in the Palestinians' standard of living was simultaneous with the weakening of their economy.

Chapter Nine deals with deinstitutionalization which "refers to direct or indirect restriction and undermining of institutions that could plan for and support productive investment over time" (p. 263). Roy focuses on the formal (government) institutions and the effect of Israeli policies "because they have had the most direct impact on deinstitutionalization" (p. 265). Israel attacks both public and private institutions as well as those extra institutional linkages. Foreign assistance (both Arab and non-Arab) also contributes to deinstitutionalization because of the goals and funding priorities of foreign donors. But the effects of these donors on deinstitutionalization are minimal compared with Israel's intentional policies in this regard.

Part three, "Continued Economic Dislocations," has two chapters. Chapter Ten shows the Intifada as a "revolt against Zionist colonization" and military occupation(p. 291). Israel responded by measures such as curfews, heavy taxation, and levies and fines. Economic conditions in Gaza were also affected by: Jordan's disengagement legally and administratively from the West Bank; and the devaluation of the dinar in 1988-1989, and the Israeli shekel in early 1989.

The Intifada and the Gulf war were devastating to Gaza's economy. They exacerbated Israel's policies directed at creating and deepening dedevelopment. While the Intifada was initially a challenge to de-development and a way to end the occupation, the lack of resources and erroneous strategies made this challenge ineffective.

In the Gulf war, covered in Chapter 11, Palestinian sources of income (aid and remittances) ceased altogether and employment in Israel plummeted. Also, in March 1993, Israel effected a closure of the Occupied Territories and essentially isolated them from one another. Consequently, Gaza's unemployment rose to 55 percent and de-development rendered Gaza ill-equipped to deal effectively with the closure.

Part four, "The Face of the Future," deals with the Gaza-Jericho Agreement. After a quick summation of the book, Roy wonders whether dedevelopment would end with the Oslo Agreement. She doubts this given the structure of the Agreement, which keeps the Palestinian autonomous areas tied to Israel. Roy concludes that de-development would not end by giving Palestinians control, but by dismantling the system of constraints "and the defining ideological strappings to which they are tied. . . . The Gaza-Jericho Agreement does not remove those constraints; it merely reshapes them" (p. 330).

Undeniably, removing those constraints would improve Gaza's economy immeasurably. However, Roy may have overstated the case when she assumes that Palestinian access to "free markets" (a debatable concept, to say the least, in the age of the multi-national corporations) is the solution. In the face of much evidence to the contrary (Africa, for example), this is a curious contention.

The bulk of the book appears to have been written before the Oslo Agreement. References to Gaza under Arafat are interspersed throughout the work and seem to be grafted on the chapters in which they occur. It would have been better, in this writer's opinion, to integrate those references into the last part of the book where they belong.

Finally, despite these problems, the work is all the more important now that the Palestinian Authority is in Gaza and nothing can detract from Roy's powerful indictment of Zionism.

Ibrahim G. Aoude is an associate professor in the Ethnic Studies Program, University of Hawaii at Manoa.