A fundamental question faces those seeking to calm the latest round of conflict in the Palestinian territories. How is it possible for Hamas to emerge as a powerful political force at a time when regional states and the international community are opposing the movement? Primary attention focuses on the gruesome daily quality of life plaguing the Palestinians, and the political hopelessness consuming them. The rise of Hamas is a direct result of the distinct failure of Palestinian Authority President Mahmoud Abbas and his predecessor, Yasser Arafat, to negotiate and deliver better economic conditions to their people. The breakdown is a combination of incompetent government entrenched in corruption and Israel's failure to support and promote the legitimacy of the Palestinian Authority. The result generated distrust and hopelessness that eventually facilitated the rise of Hamas to power in Gaza. Having just commemorated the 40th anniversary of the 1967 Arab-Israeli war, we are reminded of the continued deterioration of Palestinian economic conditions. In 1968, an average Israeli was 10 times wealthier than an average Palestinian in the West Bank and Gaza. Today, Israeli GDP per capita is over 20 times that of Palestinians. Over 60 percent of Palestinians now live below the poverty line. In Gaza, the epicenter of the recent conflict, the situation is the worst. A recent International Monetary Fund-World Bank report estimated that 75 percent of Gazans were considered poor, with over 40 percent unemployed. Unlike the prosperous Israeli economy, the Palestinian economy has failed to gain traction. The dire situation may be partly explained by the economic and geographic closure of the Gaza Strip - which is one the most densely-populated places in the world. The economic gap between Israel and the Palestinian Authority is projected to grow. This economic disparity has contributed to the fostering of bitter hopelessness on a personal level among Palestinian youths, igniting the anger that fuels violence, making the young a natural target for recruitment in militant organizations such as Hamas. Perhaps the lost golden opportunity came in the 1970s and 1980s, when Israel totally controlled the West Bank and Gaza. Israel should have invested adequate resources in the Palestinian economy with the objective of raising their economic standards above those of bordering Arab nations. This would have been a wise investment that would have yielded comparative advantages to both people. Focused economic and developmental incentives would have improved life and generated substantial improvements in the Palestinian standard of living. Economic well-being is the best weapon to counter militancy and Islamic fundamentalism. Perhaps Warren Buffet and others would have invested not only in Israel, but also in Ramallah and even Gaza. Hope and normalcy for Palestinians will emerge from jump-starting their economic machine that has slowed to a dangerously lethargic pace. It is a defining moment for the Palestinians. This will be the most powerful weapon to marginalize Hamas from within. Palestinians will need to understand that a stable homeland rests on two essential variables: law and order plus a sound and transparent economy. They need international assistance in both - simultaneously and immediately. President Mahmoud Abbas has dissolved the Hamas-led Cabinet and established an emergency government. It is imperative that the international community help him. Urgent and substantial aid is needed to ensure his survival. Hamas must not be allowed to be strengthened. International reluctance may prove regressive, dangerous, and costly. The economic success of Israel between 1950 and 1965 was largely due to a substantial influx of foreign capital - mainly from the United States - that allowed the nation to invest in domestic programs. In some years that aid was almost 25 percent higher than Israel's GNP. This made possible substantial investment that kept pace with the rising immigrant population and expansion of the economy. The Palestinians now require the same capital infusion that will allow them to develop and mature their economy and create badly-needed jobs. Bad news continues to emerge from the Middle East. The belligerence of Hamas is a dangerous phenomenon. The movement has the potential to destabilize the region in the short run and to delay or block a solution to the Palestinian-Israeli conflict in the long run. That's why a solid Palestinian economy is of paramount importance. Get people back to work. Give people a sense of personal and financial well-being. This will restore some sense of hope for the Palestinians. Raja Kamalis associate dean for resource development at the Harris School for Public Policy at the University of Chicago. THE DAILY STAR publishes this commentary by permission.
