The Palestinian Economy Is a Protection Racket Financed by International Donors

While the current state of the Palestinian economy is nowhere near as bad as one might think from reading the Western press, writes Hillel Frisch, it is beset by serious problems:

According to the standards of the World Bank, West Bankers are middle-class and Gaza residents lower-middle-class. [But] it is a matter of serious concern that neither in Gaza nor in the territory controlled by the Palestinian Authority is [there] a functioning domestic economy. By far the most important element propping up Palestinian economic welfare levels is financial aid [from] donors such as USAID, the EU, and church-related organizations, which underwrites roughly one-third of the [Palestinian] gross national product in the West Bank and considerably more in Gaza. . . .

[T]he substantial economic aid the PA receives from the EU, USAID, and individual EU member states enables it to reward incarcerated terrorists, terrorists released from prison, and the families of terrorists both living and dead with generous stipends and financial support. . . . Such support acts as an incentive to commit acts of terrorism and lowers deterrence against those who would commit such acts even without incentives.

Yet the problem is even broader. The most important group of actors on the Arab side—the PA, its militia Fatah, and Hamas—have perfected a deadly political economy rather than built a functioning one. It is the use of force, or the threat of the use of force, that assures the flow of aid from international actors, many of whom want to pacify the situation. The [donors] thus become accessories to a form of protection racket that demands, “Support me or I’ll attack Israel and its Jewish citizens.” The EU, anxious lest Israel retaliate and create a refugee problem whose imprint will be felt in Europe, plays the game and pays up.

Unfortunately, this state of affairs will only worsen if a Palestinian state comes into being. Why is this? Because manufacturers in the PA and Gaza are shut out from their most important markets: Jordan and Egypt.

Read more at BESA Center

More about: Egypt, European Union, Jordan, Palestinian economy, Palestinians, Politics & Current Affairs

To Stop Attacks from Yemen, Cut It Off from Iran

On March 6, Yemen’s Houthi rebels managed to kill three sailors and force the remainder to abandon ship when they attacked another vessel. Not long thereafter, top Houthi and Hamas figures met to coordinate their efforts. Then, on Friday, the Houthis fired a missile at a commercial vessel, which was damaged but able to continue its journey. American forces also shot down one of the group’s drones yesterday.

Seth Cropsey argues that Washington needs a new approach, focused directly on the Houthis’ sponsors in Tehran:

Houthi disruption to maritime traffic in the region has continued nearly unabated for months, despite multiple rounds of U.S. and allied strikes to degrade Houthi capacity. The result should be a shift in policy from the Biden administration to one of blockade that cuts off the Houthis from their Iranian masters, and thereby erodes the threat. This would impose costs on both Iran and its proxy, neither of which will stand down once the war in Gaza ends.

Yet this would demand a coherent alliance-management policy vis-a-vis the Middle East, the first step of which would be a shift from focus on the Gaza War to the totality of the threat from Iran.

Read more at RealClear Defense

More about: Gaza War 2023, Iran, U.S. Foreign policy, Yemen