The second Palestinian Investment Conference in Bethlehem closed at the end of last week. Reports differ, but anywhere between US$500 million and US$1 billion were raised to support Palestinian infrastructure projects. The American government was represented through Obama’s special envoy, George Mitchell.

The fact is that most of the money will end up in the West Bank for two reasons. First, there is no love lost between the Palestinian Authority under President Abbas and the Hamas rulers in Gaza. Fatah and the PLO just do not operate in Gaza.

In parallel, there are logistical and structural issues why Gaza loses out. Over the past few years, violence in the West Bank has reduced substantially. The World Bank reported an 8% spurt in economic growth during 2009. The Ramallah stock market is showing initial signs of trading regularly.

Drive 2 hours south to the Gaza Strip and beneath the rhetoric of Hamas leadership, you find fundamentalism. Even during the fracas with Israeli commandos, Palestinian human rights groups condemned the local leadership for harassment. The Arab Bank has already closed 2 of its 3 branches in Gaza, amid reports of money going missing. And of the 20% of the population listed as refugees, not one family has been relocated to the former Israeli wealthy towns since 2005.

One blogger has described how the Israeli raid of the Turkish flotilla was reported with the full force of Orwellian newsspeak. 6 ships sailed to prevent a human disaster, which does not exist. The Daily Telegraph (UK) quoted Khalil Hamada, a senior official at Hamas’s Ministry of Justice:

There is no starvation in Gaza….No-one has died of hunger.

Yes, the British newspaper also confirms that the Gaza economy is in a very poor condition. Matthew Kalman in Time Magazine reports a similar picture. Hamas is thrilled at the “economy of tunnel goods”,a s it takes its percentages from the profits.

So blame Israel? No blockade and everything will be wonderful? Obvious, but just more Orwellian drivel.

Before the flotilla affair developed into an international crisis, I wrote that:

The flotilla will probably be stopped by the Israeli navy. The passengers will be off loaded, and in turn they will channel their vitriol towards the waiting microphones of the world’s media. And the people of Gaza will continue to buy a plethora of goods under the watchful eye of their fundamentalist Hamas masters.

The predection came true. Now remember that Egypt also enforces the blockade, because it realises the evil of Hamas. And Monsieur Abbas is certainly not opening the financial taps to Gaza.

If Gaza was not ruled by Hamas, how much freer would its people be? How many churches would then be open? And much money would begin to flow into its economy?