The Resistance hits Israel’s rentier economy

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A demonstrator holds a makeshift cardboard rocket reading "Resistance" during a pro-Palestinian demonstration in Paris on August 2, 2014. (Photo: AFP-Dominique Faget)

By: Adel Samara

Published Wednesday, August 6, 2014

Apologies to the Resistance fighters, but our subject today is the economy. This may not be the ideal time for discussing economics when the Resistance heroes are today the center of our world and our memory. Yet what must not be forgotten is that the Israeli assault, if not the Israeli entity in and of itself, would not have endured without the flow of capital – as well as weapons.

Perhaps it is time for many of us and the world to finally understand that the Zionists did not settle in Palestine to fulfill a myth that is supposedly a divine promise, because expelling one people to make room for another has to be a man-made enterprise.

The promise is only a projection by humans upon the Old Testament. It has been fulfilled by capital and supplemented by human promises, beginning with the Balfour Declaration and not ending with the promises of the Arab rulers in their three categories:

-The alliance that comprises Egypt, Saudi, and the UAE.
-The segment led by NATO, the Islamist Turkish Prime Minister Erdogan, and the Qatari Emir Tamim, who have been undermining the Resistance.
-The segment consisting of those whose silence equates to treason.

When Martin Luther called in the 1530s for the creation of a Jewish state in Palestine, he coated his appeal with justifications from the Old Testament. But its true substance had to do with capitalist commercial interests (Dutch and British at the time) in the Arab world. Since then, there has been a renewed drive to achieve for the capitalist Crusaders what the feudal Crusaders could not accomplish.

In other words, the occupation of Palestine was and remains a capitalist scheme in a religious guise. In it, Jewish capitalists found an opportunity to have a permanent base out of which they could consolidate their stake in the global capitalist order. This is perhaps why Rothschild began, in the last third of the nineteenth century, funding pilot settlements in Palestine.

When the Conference of Basel in Switzerland set out in 1897 to implement the project for Jewish settlement in Palestine, the conferees were driven by the deluded belief that the occupation of Palestine would be accomplished with ease, just like the genocide of indigenous peoples of the white settlements in several parts of the planet, especially in the present-day United States, had been accomplished. But despite the dismal conditions of the Arab world today, it can be said that the Arab nations surrounding Palestine were able to prevent the annihilation of the Palestinians, even if they did so passively. We can go further and say that the Arabs during the era of the Arab nationalist tide, then the era of armed resistance, and now, the era of Islamist resistance, fought the Western capitalist enemy and the Zionist entity to the best of their abilities.

The Zionists’ deluded belief was reinforced by the fact that they won over the entire Western imperialist sphere as their metropole, the center of their colonial enterprise, while every other white settlement had only one parent country as a metropole. Is this not evident from the Western arming and protection of Israel, most recently with the United States opening its stockpiles of death for the Zionist entity to continue its massacres in Gaza? In truth, this would be only the second time the United States has established an airlift to resupply Israel after the October War in 1973.

Will Palestinians and Arabs not understand that this enterprise will not allow the emergence of even a Palestinian statelet alongside it? In his analysis of the ethnic cleansing of Palestine, Ilan Pappe – who is miles ahead of many Arab intellectuals and politicians on Palestine – concludes that there may be room for a mini-state for those who were uprooted from their homeland. But within his understanding, there are two taboos in this regard: There can be no dismantling of the Zionist entity in the Palestinian territories occupied in 1948, which in his view is a permanent reality; and there is no link between the Arab dimension and the conflict, or indeed, its future outcomes.

Yet in the project for the full annihilation and expulsion coated with the myths of the Old Testament, there is no room for a Palestinian statelet on fragments of Palestine. Woe to the subservient Palestinian capitalist dream that insists on economic normalization that serves Israel, and woe to the dream of the PLO leadership to establish a mini-state that is nothing more than a pipe dream. But Gaza has laid everything bare.

Our purpose here is not to analyze numbers and figures and corporate accounts, as one would in academic economics. Rather, we will analyze three pillars that represent the backbone of Israel’s rentier economy, which emerged with the rape of Palestine, and the seizure and exploitation of an entire country and its resources and infrastructure. If we do not realize that Israel is a rentier state par excellence, like any white settlement, then we could be led to falsely believe Israel’s is an economic miracle.

But, in order to avoid the kind of empty rhetoric we have often heard from many Palestinians and Arabs, let us admit that this rentier/pillager entity has well exploited its loot. After all, this entity is run by a gang that is well versed in capitalism, and one that has high managerial skills. It is enough to compare it to the management of the Arab oil rentier regimes to see the difference.

The three rentier pillars of the Israeli economy are: foreign aid, foreign investment, and tourism.

Foreign aid

The population of Israel is slightly less than eight million, of which six million are Jewish settlers, and less than two million are natives. The average annual per capita income in this entity is $28,000.

The Zionist entity has always been supported by global capitalism, even before it became a state that expelled our people from their homeland. Cutting edge civilian and military technology from the imperialist West has always been shared with Israel, without the latter ever paying any “royalties”. It was given nuclear weapons early on by France.

It is worth noting here that up until 2008, US aid and German reparations given to Israel had amounted to $134 billion. These funds are “rents” from the United States in return for Israel’s role as a strategic investment in the Arab world, and blood money from Germany for the Jewish victims who perished at the hands of the Nazis. In other words, the first part of these rents were in return for Israel’s services in killing us and preventing the emergence of a free and united Arab word, while the second part were in return for Jewish deaths. What a paradox.

But why has the capitalist West created and nurtured this entity? Does the West make direct profits proportional to what it pays in aid to Israel? Of course not, if we go by the classical “cost/benefit” calculations.

However, funding Israel has a different purpose. Israel is a strategic investment for the capitalist metropole whose goal is not confined to the plunder of Palestine, but which also has to do with the subjugation of the Arab world, to facilitate the plunder of its resources, which are immeasurably more valuable than the cost of supporting Israel. If there are still people who do not understand Israel’s role in enabling this subjugation, then it suffices for them to mull over the attitudes of the Arab regimes regarding the atrocities in Gaza, the reports about Saudi-Emirati support for Israel, and the silence of the street thanks to normalization. After all, normalization with Israel means its integration through domination into the Arab world.

This is the meaning of subjugating the Arab world and Israel’s role in it, whether through its aggression supported and covered by the West, its role in protecting subservient and collaborationist regimes, or normalization with many Arabs who have been, as a result, not only driven away from issues of common national interest, but even from local concerns in their respective countries.

However, there are implications in this regard and questions from the public opinion and even governments in the West regarding whether the defeats Israel suffered in 1973, then 2000, 2006, 2008, and 2012, and now, 2014, mean that Israel can no longer serve its purpose. This will require the West, whether at the level of governments or through popular pressure, to reconsider its calculations, especially as it involves the US taxpayer.

In effect, such reconsideration would deny Israel huge rentier revenues. No doubt, this is one of the reasons why Israeli leaders have been working incessantly to deepen normalization with the Arab world, with a view to undermine resistance and secure huge profits at once. This is the gist of what Shimon Peres was trying to say in his sinister book about a new Middle East. The fixation Peres and his ilk have always had was this: Israel must attain a position of self-reliance. Since there are no indications Israel can achieve this without normalization with the Arab world and collaboration with Arab rulers, this is exactly what we should fight to prevent.

Foreign investment

It is not simple to state for sure that foreign investments are rents in the literal and direct sense, though their returns can be seen as such, because they cannot be reaped by investing local surpluses alone. However, we are tackling this issue from another angle.

Capital in Israel is enmeshed with globalized international capital. Yet investing in Israel is in part driven by political and ideological calculations that give Israel preference over other parts of the world, by virtue of its association with the fact that the entity is a strategic investment, and with the belief that the stronger Israel becomes, and the broader normalization with and the defeat of the Arabs are, the companies that beat others to investing in Israel would have the lion’s share of future investment opportunities. This is what underpins the rentier aspect of investing in Israel.

The above means that foreign direct and indirect investment in the Zionist entity are strongly linked to so-called peace. Hence, foreign investments flocked to Israel in the wake of the Madrid Conference in 1991, growing even more in the wake of the Oslo Accords in 1993, with the volume of these investments rising to $104 billion between 1991 and 2004. This flow itself, and being linked to so-called peace, makes it a rentier investment, because its direct motivation is the belief among corporate executives that this “peace” equated to an opportunity for higher profit margins at the time, and much higher margins down the road.

Naturally, the implication here is that the Resistance would become the enemy of investors, i.e. the countries from which these investors come, which translates into war with corporations. Naturally as well, the wars waged by the enemy seek to reassure these corporations that “peace” is solid and expanding, and that they only need to be patient.

Among the types of rents as well are the investment by Jewish capitalists in Israel. These investments give Israel preference over any other place. It is not exactly true that these investments, even if they were donations, are based on religious beliefs. Rather, they are based on the fact that Zionist capital both within and outside Israel is a shared pool. Therefore, real power in Israel is the power of this capital, in its mainly Ashkenazi form.

This rentier level can be discerned from the privatization policies adopted by the Zionist entity since 1985, as discussed by then-Foreign Minister Shimon Peres. Privatized companies were classified according to three levels:

-Companies that may be privatized to Jewish capitalists.
-Companies that may be privatized to Western capitalists
-Companies that may be privatized to public investors. (For more details, see Adel Samara, The Political Economy of the West Bank: From Peripheralisation to Development, 1988).

And, of course, it was American pressure that led Israel to expedite this privatization drive, which in turn led to deeper and broader control by the capitalist class over the Zionist entity. This brings into question the claims of Zionist ideology that Israel is a state for all the people.

Here, too, the Resistance was able to withstand, triumph over, and deal harsh blows to these investments on the near, medium, and long terms. But perhaps the long term is the most important, because it involves capitalists factoring in the possibility of receiving major blows in the future, after having poured in huge amounts of capital into Israel.

In this context, let us consider the following paradox: Despite Israel’s weakened position in the series of aggressions it initiated from 2000 to 2012, the flow of investments into Israel, especially in 2006, did not stop.

For example, Israel’s economy grew by 5.9 percent in 2000, but dropped in 2001 and 2002 to less than one percent because of tensions with the Palestinians and the second intifada, before returning to growth in 2005 to the tune of 5.2 percent. In 2006, despite the assault on Lebanon, growth reached 5.1 percent, with foreign investments flowing to the Zionist entity amounting to $22.5 billion that year.

What can explain this, especially in regards to 2006? The statistics may have been manipulated. It is possible that the six months before the war saw the largest amount of investment. But if we assume that the war did not influence the rentier-political dynamics we explained above, then the current war, which is taking place within Palestine, raises many questions among investors, questions whose definite answer is: There is no room for a safe investment in Israel.


While the issue of whether or not strategic investments and investments in “peace” are rents is debatable, the tourism industry is without a doubt a rentier sector.

It is also an industry that is very sensitive to war. If capital may sometimes take on risks to achieve high profits at some point, tourism, as far as individual tourists are concerned, requires full security. This has a huge impact on tourist activities in periods of instability.

The Palestinians were alerted to the importance of tourism in occupied Palestine during the first intifada, even though the latter was not violent in the sense of armed struggle. In the first year of the intifada, Israel’s economic growth slumped to one percent. Industrial output fell by two percent, agricultural output by eight percent, while revenues from tourism dropped by 12 percent. In 1989, the number of tourists visiting Israel in April and May dropped by 23 percent compared to the first two months of the same year.

But the current level of violence brought to bear by the Resistance has had a tremendous impact, since its covers all of Palestine compared to the first Intifada, which was confined to the West Bank and Gaza, but not the territories occupied in 1948.

In 2013, the number of tourists visiting Israel was 3.54 million, compared to 1.2 million in 1988. No doubt, the increase had to do with the so-called peace process, which brought in billions in foreign direct and indirect investment.

The largest number of tourists visiting Israel in 2013 came from the United States, with Americans accounting for 18 percent of the total number of tourists. Revenues from tourism in 2013 were to the tune of $3.3 billion.

Two weeks before the latest assault on Gaza, Israeli forecasts predicted the number of tourists who would visit Israel between June and September this year to be in the vicinity of 800,000. However, in light of the war, where the Resistance was able to launch rocket attacks at various parts of the Zionist entity, the number dropped to 280,000, or by two-thirds. If we extrapolate this figure to the entire year, the loss in revenues would be nearly equivalent to $2 billion.

There is no need to list here the effects of the war and the Resistance’s endurance on the economy of Israel. The point here is the strategic war. Let’s consider what Uzi Landau, the Israeli minister of tourism, said on August 2. Landau argued that the lesson from Gaza is but a sample of what would happen in the event of war with Hezbollah. Furthermore, the latest war shatters the Israeli hopes regarding turning Israel into the region’s Silicon Valley, because the war will end up impeding the bid for official Arab normalization.

In conclusion, the Resistance within Palestine can dry up the channels of rentier revenues flowing to Israel. Meanwhile, the Arab regimes’ blessing of and participation in the assault on Gaza, in an even broader way than they did during the war on Hezbollah, can only lead to a different popular consciousness that would set out to end normalization and the internalization of defeat. Indeed, despite all the death, popular memory will build up a response that will no doubt be explosive.

Adel Samara is a Palestinian writer and researcher

This article is an edited translation from the Arabic Edition.


SIMPLE LAYMAN ANALYSIS IS THAT this invasion by zionist created
Nearly 500,000 internally displaced zionist within zionist entity
Economic activity came to nearly standstill not only this other domino effect took place ie those visiting the zionist entity cancelled
Most important is zionist could not absorb the physoclogical blow
What I see is from here onwards the paraity has reached ie Hamas
And Hezbollah have ACES in their hand once they coordinate
And work togather we shall see Begining of the end of zionist
Further simple accident happened and GRID LOCK ROAD SYSTEM took place
ire cent crane fall down over the road and see how car accidents have grid locked the roads

This is the most informative article on the subject. Thank you Mr Adel Samara.

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