Palestine - Wealth, Income and Purchasing Power

While a textbook may say that Israel is an economy of the first world and the occupied territories of the third world, the truth is that within both Israel and the West Bank there are elements of both the first world and the second world. There is no poverty in Israel and the West Bank that one could not find in the United States or Europe, but the distribution is a bit different, and the immigration and high birth rates give an appearance of growth - new buildings, new cars - while the conflict sometimes gives an appearance of dysfunction - abandoned buildings, walls and graffiti.


Villas and more in a village outside Jenin, and evening traffic at the Matam technology park in Haifa.

There are wealthy people from Israel and the West Bank, and people making fairly high incomes in both, but there are many working poor people in both. Money from the diaspora plays a massive, massive role in the whole economy, with the net effect of making the standard of living perhaps higher than the income earned in it would suggest, with some random holes in quality of life because of the conflict. It's hard to compare the quality of life of someone who is in massive debt but can travel from California to New York without a passport to someone who owns a villa outright but occasionally gets detained and strip searched on his way to work - people in the West Bank and in Israel are poor in peace of mind and freedom of movement, but their lifestyle of family, friends, restaurants, music, history, culture, sport, relaxation and good weather is generally enjoyable - they are anything but unhappy people, perhaps they are even happier, at least during the good years.

Some numbers: it's possible, living in Ramallah, to earn $50000 per year as a skilled software engineer. (The maximum income tax under the Palestinian Authority is 15%, in Israel it's about 50%.) An accountant earns about $11000 per year. On the other hand, a student doing two or three hours of computer repair - coming to an office, doing diagnosis, saving off the hard disk of a machine with a malfunctioning OS, reinstalling a hacked version of Windows XP and a hacked version of 3D Studio Max with which the office does its work - charges only about $12 for the whole service, because otherwise someone else will do it for less. (No taxes are paid on such work, of course, and the costs other than time and transport are negligible.) So in the private sector of the West Bank, skilled workers earn between 1/2 and 1/4 of what they could earn in the USA or Western Europe. Professors at public universities and anyone else who depends on the state are occasionally not paid at all, for years. Any professor in the West Bank is by definition an emigrant that studied and worked abroad and has returned for personal reasons, because there is no doctoral programme in the West Bank.

The other side of this equation is, of course, purchasing power. "The conflict" defines the economy, making time cheap, and long-range movement - of people and of products - expensive or impossible, but in any case unreliable and varying widely between different cities and people with different documents - a Jerusalem ID or an Israeli passport is a huge advantage for someone in the right part of the West Bank. Everything produced in a city and on the surrounding land - computer repair, auto repair, meat, cheese, olives, almonds, fresh bread, a taxi driver's time, stone for building, building itself - is cheap, because the labour to make it was cheap, and the export options are limited. Everything produced abroad - automobiles, computers (especiallys Macs), toothpaste, frozen black tiger shrimp from Vietnam - is expensive, but, cruelly, there's legislation to make it cheaper if imported through Israeli companies than directly (for example from Jordan). Agricultural products, like bell peppers, tomatoes and oranges, that are produced in Israeli greenhouses and heavily subsidised, are dumped on the market. Petrol is about 5 INS per litre ($4 or $5 per gallon), about the same as in Israel, not as expensive as in Western Europe, but about twice as much as in America. The West Bank has the money and proximity to the sea to have a cuisine based on fresh fish, but the political realities make it impossible for anything but frozen seafood to travel those 50km.

One of the wealthiest, if not the wealthiest, current residents of the West Bank is Munib al-Masri. The Renaissance villa he built, which looks about like the Parthenon and overlooks Nablus from Mount Gerizim, and his charitable and political activities in Jordan and Palestine have been discussed in many internet articles in the American, Israeli and Arabian press. The less scenic Palestinian Authority compound of President Mahmoud Abbas is in Ramallah, next to the tomb of Yasser Arafat.

When using sources like Wikipedia or the CIA World Factbook to get numbers for the West Bank, it is important to question what the effect of a youthful demographic is on per capita figures, whether numbers include Gaza, what parts of Jerusalem the figures numbers include and what years the numbers were recorded. 2009 has been the most peaceful and prosperous year since 2000 for the West Bank (but with a spike in deaths in Gaza), while 2002 and 2006 were especially difficult.

It is also very important to remember that like everywhere around the Mediterranean and unlike America, the inside of a residence tends to be much nicer than the outside would suggest.