The Red Critique


In the case of Gaza

Rob Wilkie

Whatever local "political" determinations may have been made, the current conflict in Gaza between Israel and Hamas is not about "Palestinian liberation." All the interests in Gaza are economic and are ultimately about controlling resources in the interests of controlling the price of labor. The conflicts are an extension of capitalism through military means.

In the case of the war in Gaza, significant reserves of natural gas were discovered off the coast of Gaza in 1999. Even under the terrible terms of the various agreements that were signed since its discovery—in which 90% of the profits would have gone to international capital while only 10% would go to the Palestinians—the gas fields were expected to be worth somewhere between $700-$800 million a year to the Palestinians if they were developed, along with the additional reduction of the almost $500 million a year it costs the Palestinian Authority to import Israeli electricity. However, development of the gas fields in this way would increase the development of the region and, in turn, drive up the cost of Palestinian labor to Israeli capital.

In terms of Palestinian labor, the U.S. State Department describes the Palestinian workforce in its 2023 "Investment Climate Statement," as "well educated, boasting a 98 percent literacy rate, and the West Bank and Gaza enjoy high technology penetration, despite poor internet service and limited access to modern, high-speed mobile networks." And that currently, "the average daily wage in the West Bank is $37, and the equivalent is $15 in Gaza, compared to $79 in Israel."

The discrepancy in wage levels between the West Bank and Gaza is an effect of the tightening Israeli blockade of Gaza since 2005, which has resulted in the deindustrialization and deagriculturalization of the Gaza strip, with the outcome that poverty rates prior to the latest military action have reached 65% of the population. Additionally, workers in Gaza were essentially banned from employment in Israel between 2007-2019. The result is that only 3% of the Palestinian workers from Gaza currently work in Israel.

In the West Bank, on the contrary, the Palestinian Authority has committed to an economic program of deregulation in the interests of attracting foreign capital as a source of low wage but highly skilled labor. As a result, 20% of the workforce in the West Bank now works in Israel and another 40,000 Palestinians work in Israeli-run "Industrial Zones," which the Israeli government plans to scale up 10 times in the next 10 years. A higher standard of living relative to the abject poverty of Gaza explains the higher cost of wage labor there.

In other words, Palestinian workers represent a highly exploitable labor force that is tightly controlled by the Israeli government and can be pitted against each other as well as against Israeli workers as a mechanism for managing labor costs by Israeli capital. Israel assigns a select number of work permits to different industries depending upon the needs of capital. In 2022, for example, the number of work permits for industrial workers from the West Bank allowed to work in Israeli factories was increased by 3500 to deal with a "labor shortage" in Israeli factories, and another 8000 were recently granted work permits in a range of industries due to labor shortages after Israel deported thousands of Gazan workers after revoking their permits because of the war with Hamas. Any development of the West Bank which would raise living standards would result in higher labor costs for Israeli capital, and if the development of the gas fields led to an increased living standard in the West Bank, then the displaced population of Gaza becomes a new potential source of low-cost labor for Israeli capital.

Israel gaining control over the gas fields would thus have the dual effect of keeping its own costs of production down and ensuring energy stability, something which it has struggled with since it began to attract foreign direct investment in the 1990s as a burgeoning global "high tech" economy as a result of the large immigration of former scientists and engineers from the former Soviet Union, while it would also enlarge its own (currently small) share of the growing market in natural gas and thus gain a lever over labor costs elsewhere. In fact, over the past four years there has been a strong push from the extractive sectors of Israeli capital to remove the strict regulations of gas exports to deal with a "glut" of gas that they are unable to process, even though it is reported that Israel is facing an electricity crisis by 2027 because of the lack of electricity plants. Signed agreements with the EU, as well as forming the "Energy Triangle" with Greece and Cyprus, has corresponded with a level of gas production that has increased exponentially, rising 23% in the past year.

The right to the Gaza Marine gas deposits, although formally granted to the Palestinians, have remained almost entirely undeveloped due to Israeli actions despite repeated agreements since its discovery. Just one year after the first two test wells were dug in 2001, for example, the former PM Ariel Sharon declared upon taking office that Israel would not buy gas from the Palestinians and instead tried to take complete control over the gas fields, eventually taking the original deal to Israel's Supreme Court to dispute Palestinian rights to the gas. This effectively shut down all development.

Yet, that these conflicts are economic and not "scriptural" is demonstrated by the fact that any time there has been an energy crisis in Israel it immediately opens "un-open-able" negotiations with Palestinians for the right to develop the gas fields. For instance, in an attempt in 2007 to restart the deal to address the high energy costs that have long plagued Israeli capital, and which were impacting the development of Israel's "Silicon Wadi" tech industry, former British PM Tony Blair, acting at the time as a representative of JP Morgan and British Gas, negotiated a return to the 10% deal. However, the rise to power of Hamas—who was cut out of the Blair deal and immediately demanded its renegotiation of the terms of the agreement upon taking power in Gaza that year—led once again to Israeli demands of complete control of the gas and the profits, with any money to the Palestinians to be delivered in goods, and which has resulted in a continuing series of military interventions into Gaza even before the most recent conflict. The result is that a 25-year lease that was signed by British Gas never developed into anything. The lease was then transferred to Shell in 2018, which likewise pulled out when no development was forthcoming.

Similarly, Israel suffered a severe energy crisis in 2011 when the Arab Spring in Egypt, which supplied Israel with 40% of its natural gas, meant the end of gas shipments. This energy crisis compounded a rising cost of living crisis in Israel and led to middle and upper-middle class "social justice" protests over increasing costs of consumption. It was not therefore an accident that just as protest movements began arising across the Arab countries in early 2011, Israeli PM Netanyahu, again working with Blair, reached out to the Palestinian Authority in February 2011 to try to restart the gas deal as a means of "diversifying gas supplies in the future," as the Israeli government could see the risks to its economy having to rely entirely on a single source of natural gas. In fact, it was even reported that for all his bluster, Netanyahu was secretly negotiating with the Palestinian Authority and even indirectly with Hamas (through Egypt as an intermediary) as late as May 2023 for development of the Gaza Marine gas field. The point is, when energy supplies begin driving up the costs of production, supposed mortal "enemies" suddenly become fast economic "friends."

It was also around this time that Israel, in its never-ending search for new sources of energy, found a solution to its crisis in the discovery of natural gas in the Levantine Basin, which Israel claimed the rights to over objections from Syria, Lebanon, Cyprus and the Palestinians, all of whom also claim rights to the gas fields. This led to a series of military conflicts with Lebanon and Syria and the ongoing border skirmishes with Hezbollah (who also claims rights to the gas fields). Although here too Israel has also reached an agreement in 2022 with another of its "enemies," Lebanon, over the development of areas of the Levantine Basin.

In the short term, the development of the Levantine Basin gas fields has resolved for now Israel's energy supply problems to the extent that they have, in fact, become an exporter of natural gas, including to their old supplier Egypt with whom they just signed an 11-year deal in August of 2023. This in part explains Egypt's hesitancy to accept Palestinian refugees, despite their lip service to Palestinian liberation. Reports say that as part of the international pressure placed on Egypt to accept refugees, they have been made an offer to have their substantive international debts reduced or forgiven if they allow the Sinai to become a refugee camp for Palestinians from Gaza, though the expectation is that they will never be allowed to return.

Meanwhile Hamas' military "invasion" of Israel—which never had any chance of succeeding at anything close to liberation—can be read as little more than an attempted military "negotiation" to get some local reforms that would allow increased number of workers in Gaza to work in Israel, as well as to negotiate better terms over the pipeline since they have openly declared from the time they took power that they were losing out on the deal to the Palestinian Authority. The Washington Post reported in 2022 that "Hamas hung banners near the Gaza harbor saying 'Our gas, our right'," in the demonstration of its interests in gaining a larger share of the gas revenue during the negotiations with Israel ("Gaza gas deal could make improbable partners out of Israel and Hamas," November 25, 2022).

In addition, recent polling reported on in Foreign Affairs ("What Palestinians Really Think of Hamas," October 25, 2023) points to a growing opposition to Hamas, with the majority of Palestinians in Gaza saying they would either vote for another party (32% saying they would vote for imprisoned Fatah politician Marwan Barghouti, with Hamas leader Ismail Haniyeh only getting 24%) or not vote at all (30%), so the decision to launch a military invasion of Israel is less about liberating the Palestinians and more likely a desperation move to maintain political control and to get a "better deal" in the gas field agreement.

While the Israeli far-right would like to use the Hamas attack as a pretext for ethnically cleansing the Gaza strip of Palestinians—which all documentation and statements point to being the desired result of the current counter-offensive—the likely outcome, especially as the war continues to contribute to the contraction of the Israeli economy, is a reduced in size and an even more heavily-policed "Gaza" that will give Israel control over the gas fields (either directly or through an imposed government) and reopen whatever remains of the Palestinian workers to the exploitation of wage-labor by Israeli and international capital.

In the absence of a collective movement of workers across the political divisions of Israel and Palestine, the outcome of the latest military conflict will only be death, torture, destruction, and further exploitation of the Palestinian and Israeli working class at the hands of international capital and its political agents.