The Gulf's Toll on the Palestinians

IT is now universally accepted that the close association of Palestine Liberation Organization (PLO) Chairman Yasser Arafat with the actions of the Iraqi regime in the Gulf has caused enormous, perhaps irreparable damage to the Palestinian cause. What is less known, however, is the extent of the economic losses suffered by Palestinians as a consequence of Iraq's occupation of Kuwait and the wider ramifications of this in the region.

Of the nearly 6 million Palestinians in the region, approximately 2.4 million are in historic Palestine itself - Israel and the occupied territories. Two million more live in Jordan, while about 1.5 million live elsewhere, of whom about 700,000 live in the Gulf states and Saudi Arabia.

Outside Jordan, where virtually all Palestinians had been granted full citizenship since 1950, the 400,000 Palestinians in Kuwait constituted by far the most coherent, successful, and politically conscious Palestinian community in exile. Not permitted integration into the largely exclusivist Kuwaiti society, they preserved their sense of identity and were successful in the professions and in business. They constituted the effective core of the civil administration and private sector in Kuwait. Over the years, their contribution to the Palestine national movement and to the support of the Palestinian community in the occupied territories has been singular.

The economic strength of this vibrant community, not to speak of its political future, has been abruptly and cruelly decimated. Most Palestinians in Kuwait have resided in the country for a generation and more, productive and hard-working. All has been lost and, given the ambivalent attitude of the Kuwaiti authorities in exile, may never be even partially compensated. In the absence of a satisfactory resolution of the crisis in the Gulf, the economic losses of this Palestinian community alone are conservatively estimated at $10 billion.

Other Palestinian communities in the Gulf region and in Saudi Arabia have not to date suffered serious losses, although their visible, but precarious, presence has come under a cloud as a result of the muddle-headed position taken by the PLO. A small number of prominent Palestinians has been expelled from Qatar, and larger numbers have been denied visas or work permits in other Gulf states.

The Palestinian community in Jordan has been severely hit. Coming on the heels of a two-year economic decline, the Gulf crisis, with its embargo on trade with Iraq, deeply damaged the Jordanian economy. The crisis had a particularly destructive impact on Palestinians in that country, as they tended to dominate private activity in construction, industry, and trade. The economic losses of the Palestinians in Jordan could reach $2.5 billion during 1990 and 1991.

The greatest hardship, however, if not the largest loss, has befallen the Palestinian community of 1.8 million in the occupied territories. This community had already suffered 20 years of economic stagnation administered by an anti-development occupation policy, before being put through the wringer of two-and-a-half years of economic disruption and decline brought on by Israel's punitive measures against the intifadah. During the latter period, per capita income declined by nearly 35 percent.

The occupied areas are particularly vulnerable to external economic shocks, especially those affecting the well-being of Palestinian communities in neighboring Arab countries. These communities had long kept living conditions in the West Bank and Gaza moderately tolerable through remittances and other income transfers. The neighboring Arab countries also constituted an important market for the exports, principally agricultural, of the occupied territories. Annual flows to the territories from all Arab sources are estimated at about $700 million, slightly more than half of which will cease as a result of the crisis in the Gulf.

Such a loss would reduce further the per capita income of the average Palestinian in the occupied territories by 15 to 20 percent, bringing it down to about $800 a year, or about half of what it had been on the eve of the intifadah. In order to comprehend the extent of the hardship entailed by such a decline, one may note that at this level, per capita income of a typical Palestinian in the occupied territories is only one-tenth that of an Israeli, and both face essentially the same cost of living, as most markets, in goods if not entirely in services, are fully integrated.

Especially hard hit are the scores of health, educational, and social-welfare institutions in the occupied territories. The financial condition of most of these is desperate, and a concerted Palestinian, Arab, and international effort is urgently needed to address their problems.

The uniqueness of the crisis in the Gulf is that, for the Palestinians, the political damage to their cause has been compounded by a virtual destruction of their hard-earned economic base. A resourceful and highly politicized nation that remains dispossessed has proved irrepressible in the volatile region of the Middle East. One that has also been stripped of its means could prove explosive.