What Israel's Economic Boom Means for the Peace Process

by Joshua Hammer | October 21, 2010

You can sense that the good times are back in Israel the moment that you step through—or try to step through—the Jaffa Gate in Jerusalem’s Old City. During the four years that I lived in Jerusalem, between 2000 and 2004, this main portal to the country’s number-one tourist attraction was often deserted, a consequence of the Al Aqsa Intifada’s violence. But when I returned two weeks ago, I found myself trapped in the tourist traffic jam from hell. Sightseeing groups from every corner of the planet—Russia, Poland, Nigeria, Spain, Brazil, Korea, Japan, the United States—coalesced into a solid mass at the entrance, a swarm of yellow baseball caps, purple flags, and matching t-shirts. Herded through a corridor by the police to avoid construction going on around David’s Citadel, I stood, immobilized, in the horde for nearly ten minutes.

The scene was similar at almost every place I visited during my week-long sojourn to the Holy Land. The American Colony, the King David, the Citadel, and other luxury hotels in Jerusalem were filled to capacity. The tourist influx has grown so large that the Israeli government recently granted special permits to Jewish tour-bus drivers to enter the West Bank town of Bethlehem, normally off limits to Israeli Jews. Now a constant stream of tour buses from Israel passes through the single gap in the Wall leading to the city of Jesus’s birth. Inside the Church of the Nativity, deserted during the bad times, the wait to visit the grotto is more than two hours long. (Having written a book about the church during the Intifada, I led a friend through an obscure passageway inside the 1,600-year-old complex, and was able to circumvent the thousands waiting in line.) If anyone needed further evidence of the strength of the Israeli economy, the shekel, Israel’s currency, was trading at its highest level against the dollar in a decade.

And it’s not only Israeli Jews who are enjoying the new boom times. A Palestinian Christian friend of mine, a denizen of the Old City, earns his living as a tourist-bus driver. During the Intifada, he was unemployed for months at time, and his family scraped by on his wife’s meager earnings as a cleaning lady. These days, the man is hardly home, venturing from one Galilee-to-Eilat excursion after another. He especially likes the Germans, he told me, standing by the new Sony flatscreen in his living room, because “they prefer the two week trips.” In Ramallah, my former Arabic tutor and “fixer-translator” has started a successful new career operating an art-and-antiquities gallery. She took out a $250,000 bank loan to buy the shop—unthinkable a couple of years ago—and now sells Afghan carpets, Syrian furniture, Uzbek jewelry and first-edition prints to Western journalists and well-to-do Palestinians. “I can sell you a view of Nazareth by [nineteenth-century Scottish painter] David Roberts for $6,000—the inside price,” she told me over a dinner of baba ganoush and chicken kebabs spread on the second floor of her show room.

It would be wonderful to think that this prosperity and seeming contentment reflect some thaw in the political process. Yet if anything, it strikes me that a new cynicism has taken hold. Both Palestinians and Israelis seem to share a recognition that the status quo—the implacable presence of the Wall, the inexorable expansion of settlements, a booming West Bank economy fueled almost entirely by infusions of cash from the European Union, the United States, the U.N., and other donors—is about the best that anyone can hope for Now. Nobody believes in the Obama peace initiative. Nobody believes that the leadership on either side is serious. Expectations have been lowered, phenomena once viewed as outrages are shrugged off. “People can get used to anything,” I was told by one Bethlehem shopkeeper who lives spitting distance from the security barrier. “I don’t even notice it anymore.” Unless you’re stuck inside the Gaza Strip, it appears, this state of limbo—with a self-satisifed Israeli population and an apathetic Palestinian one living parallel lives that never touch—seems to suit everyone.

Still, it would be naïve to think that the place isn’t capable of exploding. All it took was a short visit to the City of David, just outside the Old City Wall in East Jerusalem, to be reminded of the volatility. This wildly popular archaeological site—now visited by 400,000 tourists a year—is the pet project of right-wing Israelis who claim that its ruins provide proof that King David ruled a Jewish kingdom here three thousand years ago. That claim, of course, is disputed by Palestinians, who read it as a cynical attempt to justify permanent Israeli control of East Jerusalem. In September, a security guard from Elad—the right-wing group that runs City of David and supports 62 Jewish families living nearby—was surrounded by rock-throwing Palestinian youths. The guard shot and killed one of them, setting off a day of bloody riots in east Jerusalem. Two weeks later the leader of the group ran down two Palestinian boys. An Elad spokesman told The Jerusalem Post. “It seems that they were lying in wait ... it may have even been a lynch situation. He felt his life was in danger.” When I visited the City of David project, all was calm again, and it's doubtful that the tourist groups who jostled for space among the ruins were even aware of what had happened. “It was just a brief blip,” my Israeli guide insisted, shifting uncomfortably. I was not reassured.

Joshua Hammer is a Berlin-based foreign correspondent and the author of, most recently, A Season in Bethlehem: Unholy War in a Sacred Place (Free Press).

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