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Ramallah’s Bubbles

[Downtown Ramallah. Image by the author.] [Downtown Ramallah. Image by the author.]

Recently there has been a proliferation of talk about Ramallah’s “bubble.” Based on the seeming contradiction between the quality of life there versus elsewhere in the occupied West Bank, popular accounts are rife with descriptions of bubbles emerging and bursting. 

The bubble language is pervasive but it is not coherent. Some argue that the bubble is economic, poised to pop and thereby destroy Ramallah’s boomtown economy. Others contend that the bubble is an artificial force that encourages inorganic businesses that can’t survive the occupation. And others maintain that the bubble is based in government debt, or that it is a “problem” that the private sector will need to solve. Or that it might be made of consumer debt

Some argue that the bubble is a sphere of representation, a cultural fact productive of a different kind of public space, which marks Ramallah as somehow not of Palestine, and where foreign visitors are isolated from Palestinians in villages. 

While others suggest that Ramallah itself is a bubble and thereby insulated from Israeli apartheid. And that now, post-intifada, it enables widespread exhaustion to give rise to individual aspiration, and provides Palestinians relief from the political situation. 

Even if some accounts of the bubble are based on certain assumptions of what Palestinianness, resistance, or forms of wealth should look like, it is clear that for some, the economic situation, and the idea of the bubble, is reconfiguring resistance. For others, it is “truly a bubble” that prevents resistance altogether. Or it could be close to bursting, a “recipe for revolution” that results from unsustainable growth and the widening gap between a “new, highly educated, English-speaking class in Ramallah” and those classes most harmed by austerity measures.

The question is: what binds these accounts together? 

First of all, like bubbles, they’re based on future expectations, and they produce norms about economics and social life. For authors writing about occupied Palestine, hearing about daily Israeli incursions, or being among a population decimated by the violence of occupation, prisons, and immiseration—or in exile and diaspora—it’s difficult to see the situation as anything but unstable. The relative comfort and wealth, the new Audis, the new hotel, and the cappuccinos that some can enjoy seem jarringly dissonant with preexisting ideas of Palestine and life under occupation. 

However, this discursive field conflates a lot of categories that are bound and linked, but intertwining, and the promiscuity of bubble talk does little to illuminate the forms of economic, political, social, and structural stability or instability that exist in the West Bank today. 

By and large, the recent move towards political economy in Palestine studies is productive, but accounts that focus narrowly on Ramallah isolate it from the West Bank, the West Bank from Palestine, the West Bank from Israel, and Palestine from the world. My intention here is to consider the wider context, to parse some of these categories, and to approach the idea of social, economic, and political stability at a different scale. Consider a couple of different correctives to these accounts:

Take Sam Bahour, who is a Palestinian-American businessman and activist widely quoted in the above accounts, and who is very vocal in opposition to the occupation, in his critique of the PA, and in his support of the private sector. Bahour writes

Economic development and growth which is worthy of building toward an economy of a future state is nowhere to be found. How could it be? All key aspects of a true economy are squarely in the hands of Israel, our occupier. Israel, alone, holds the levers to our water, movement, access, all borders, airspace, electricity, electromagnetic spectrum, just to name a few. A new building in Ramallah, or 100 for that matter, make for good ribbon-cutting ceremonies, but are as far from economic state building as is wrong is from right.

More concretely, he describes the difference he sees between sustainable, politically viable economic growth and growth in GDP

Now, we are forced to circumvent Jerusalem, around cement walls and through multiple Israeli checkpoints. Today it takes us over 60 minutes, at best. For GDP growth, this is great news. During those extra 40 or more minutes we burn more gasoline, require more lighting on the longer roads, eat more sandwiches on the way, spend more time driving, hit more potholes, which causes more work for the road engineers in the morning, and so on. All of this extra spending is great for a higher GDP but catastrophic for our livelihood and state building exercise. 

For Bahour, political and economic problems emerge in a context where the open market is an illusion. And these problems will only be solved by a political process serving the people and the economy, and through the establishment of a functioning, non-constricted open market. That market can only emerge with the end of the occupation and an end to the many types of barriers Israel imposes to economic growth and otherwise. 

The point here—that the ways that accumulation and growth happen is a consequence of the occupation rather than a contradiction to it—is necessary for an adequate understanding of whether there may, or may not, be a bubble in Ramallah. 

Raja Khalidi and Sobhi Samour take a different approach, arguing that the so-called state building project enables several unwelcome political realities. It encourages (1) an artificial, or ideological, separation between economics and politics, (2) acquiescence to the occupation, and (3) the integration of neoliberal discourse into Palestinian political language. 

They write, 

Simply stated, because it has no evident strategy for tackling the real ‘external’ obstacles, the PA’s attention has shifted to a range of perceived ‘internal’ obstacles to statehood, and its program is consequently aimed at rooting them out. Seen from this angle, then, the PA statehood program must embed the discourse and practice of neoliberalism in Palestinian society. It is here where the concept of the rule of law, so central in neoliberal rhetoric, proves its instrumental value. Underlying its technical, neutral vocabulary is the desire to escape politics and, indeed, the very political nature of the question of Palestine. The statehood program encourages the perverse idea that citizens may have to acquiesce in occupation but will not be denied the benefits of smoother running traffic, a liberal education curriculum, investor-friendly institutions, efficient public service delivery, and, for the middle class, access to luxury hotel chains and touring theatre performances.

For them, the interaction of cultural and social changes with economic and political facts is crucial to understanding the breadth and scope of the ideological and material changes that are occurring in Palestine.

But bubbles imply instability—so where’s the instability here? 

For Bahour, the barriers to growth that the occupation presents in the West Bank create “artificial” growth, and could potentially collapse a market that only appears to be free. For Khalidi and Samour, there is a contradiction at the center of the state building project: it seeks not to build a state, but to normalize the occupation through the imposition upon, and replacement of, resistance by a mix of free market ideology, limited “free market” practice, and the new forms of social life that come with them. Clearly, if these factors are intertwined, they’re going to allow different people different kinds of opportunities, and engender different cultural forms and attitudes about politics and resistance. 

Furthermore, if we take the PA efforts at economy building and state building seriously, and if we understand that neoliberalism isn’t a point in time, isn’t about utterly open markets, and isn’t complete, we arrive at different conclusions and, indeed, different questions. We see that neoliberalism is a piecemeal class project that functions in part by organizing markets in certain ways, using the state as a scale at which capital accumulation is organized, and establishing forms of openness—and the ideological practice of openness—as strategies to do so. 

And so a slightly different question emerges: in what ways is this situation stable or unstable?

As a student trained in anthropology and human geography, I’m interested in the social, cultural, political, and structural aspects of the economy, and less in statistical or strictly economic accounts. In my dissertation project on new town development in the West Bank I explore the current push towards privatization and state building, and the ways that politics is being inscribed into social space in the West Bank in a dialectical relationship to the changes in physical space that are brought about by new capital and investment, and to ideas about space and life within it.

More narrowly here, I want to understand what the rhetoric of instability in bubble talk obscures. I also want to understand the economic and social norms being produced within bubble talk, and as a result of bubble talk in the bubble itself.

The accounts at the beginning of the piece mostly fall short of the target. Social life, economics, and politics are all inextricably linked, and one can’t be understood in isolation from the others. And even though there is a lot of West Bank immigration to Ramallah, the bubble is better understood not by comparison to other West Bank towns or to ideas of resistance, but to the structural relationships of the whole West Bank to Israel and Israeli ambitions, and to Israeli imperatives to control the West Bank with as little labor and effort as possible. 

It is clear that new forms of lending and debt in Palestine are enabling consumer spending on all the so-called luxury goods—homes, food, cars—that these accounts, for various reasons, understand as not Palestinian enough, or perhaps as too expensive, or too unlikely for Palestine. However, here, as elsewhere, the accumulation of debt in one place is consistent with the accumulation of wealth in another, and the market itself produces ideas of individual need. 

The increase in personal debt, and reference to the 2008 crisis in the US, is one of the main reasons for the bubble talk. However, the debt market in the West Bank differs from that in the US. New forms of mortgage lending are insured against collapse and political risk by NGOs and international aid organizations, and banks allegedly have recently released salaries to PA employees only after receiving loan payments. So even if the West Bank were to see a wave of defaults, which may happen in the future, Palestinian lenders enjoy various forms of insulation.

Consumer spending is enabled by this debt and the peculiarities of the West Bank labor market. Should a mass bankruptcy occur, we would almost certainly see West Bank labor mobilized to generate wages. The West Bank is both a captive market and the container of a labor force that can be activated or disabled through permits and other mechanisms, and a consumer debt bubble could be remedied by increasing the number of work permits to Israel, or, perhaps, by a serious attempt at dormant proposals for truck-to-truck trade and industrial zones, and by PA wages and direct disbursements.

New mortgages are based on a reorientation and simplification of the land regime in Palestine. Through large-scale development on land purchased by developers and registered or, in at least one well-known case, reparcelized by the PA, apartments are being built with clear-enough title that they can be used as collateral for long-term loans. And because land ownership rights are effectively vested in developers rather than individual buyers, individual mortgages are further insulated from the market. Finally, under the current situation, it’s hard to imagine that land prices will fall in Palestine, given the actual scarcity of land in the urban centers, and the artificial scarcity produced by Israeli blue-line plans, the Oslo categories of Areas A, B, C, Israeli home demolitions, and so on.

The question of a government debt bubble is more complicated, and I won’t deal with it here, except to say that many have argued that the PA is backed and propped up by the Israeli government and international aid. Debt is a condition of its existence. While the PA regularly fails to meet its salary requirements, Israel just as regularly steps in to help by disbursing money it has withheld under the terms of the Paris Protocol or illegally. Given the vested interests Israel and the international community have in the PA, economic collapse seems unlikely. 

In turn, all this bubble talk, and the narrow focus on Ramallah, tends to obscure the ways that the West Bank, and the West Bank economy, is being held in suspension by political and social processes taking place beyond it, by making it “open” in a broader context of closure, and by obscuring this fact with “bubble” language that focuses on the former rather than the latter.

The first is that states have a big role in preventing or enabling crises—many of the problems of the 2008 collapse could have been avoided if the American government had bought up crummy mortgages and served as a guarantor in order to insulate people from market forces. But in this period, states are more likely to create the conditions for these collapses by disabling regulation, forcing open markets, and so forth. And while the PA state building project is doing something similar, it is backed, and held in suspension, by the geopolitical and geoeconomic scaffold that has emerged to structure Israel’s relationship to Palestine since 1948. 

Viewed from a different perspective, the newness of the Ramallah market does not index instability, but instead points towards a set of practices that attempt to bound instabilities into possibilities. In various ways, debt, falling wages, and PA wage instability control the dynamics of consumption and manage the market; and the political relationship of the PA to Israel keeps the West Bank market subordinate to Israel’s. 

It’s true that there are fissures, and that opportunities for resistance emerge in different places—for example, if the economy of the occupation moves through the PA, the PA might now be in a position to make credible threats to those who profit from the occupation. Or, Ramallah class culture might begin to clash with the national movement, and this may lead to increased political consciousness among those who don’t benefit from new economic practices. Here, I simply want to propose a wider view of these forces, and suggest the political economic situation in Ramallah may not consist of short-term bubbles, but instead long-term, if piecemeal, attempts to establish certainty, and to solidify certain economic, political, and cultural forms in the West Bank.


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