Israel is where Western countries send delegations to learn how to copy the success of the start up nation. Just this week, it was announced that Mellanox exited for a mere US$6.9 billion. Who’s next?

And yet there are those who are questioning if the proverbial bubble has burst for the Israeli economy. The fiscal deficit is climbing. The general election on April 9th and is likely to result in further political instability. Can the economic triumphs of the past decade be repeated?

Palestinians benefit from a resilient Israeli economy. Legally or otherwise, over 100,000 labourers find employment daily via their neighbours. If they gainfully registered they receive full social benefits, which barely exist in the territories. That said, since the Oslo Accords, both in the West Bank and particularly in Gaza, the Palestinian economy has shrunk.

Yes, there was a positive blip at the end of the 1990s – 15% improvement for two consecutive years. However, Chairman Arafat’s decision to launch the Intifada killed that off, as well as others.

The West Bank has historically been the stronger of the two districts. According to an analysis by Doron Peskin, unemployment has risen slightly over the past two years to almost 18%. Arguably of more concern is that economic growth has shrunk by almost 50% to about 2.7% annually. The data for Gaza is far more depressing.

What is important to note about these numbers is that natural population growth is higher than 3%. President Abbas is ill and is seen increasingly as less able to command respect. And we have observed that the Israeli economy may be weakening, and thus less able to take up some of the slack.

Next stop? I am not sure. However, just before Hamas launched two rockets at Tel Aviv last night, there had been a massive demonstration in Gaza. The populace were revolting at the high cost of living. At the same time, the shops in the better off suburbs still appear to be remarkably busy.

I suggest that there is a lesson here. The Palestinian leadership should learn from their Western colleagues, listening to Israelis about how create wealth rather than seeking to destroy hope.