Important to note that Gaza (and the West Bank) have incomes below that of the surrounding Arab countries like Jordan at $4,000 or Egypt at $3,700. (Not to mention much higher incomes in Syria and Lebanon before their recent declines).
a) Why are low cost countries further away on average than high cost countries? Also, large countries would be paying the same amount for shipping(intranationally) - goods should be expected to move the same amount of distance. Is there anything specifically about crossing national borders that is costly?
b) Same - it would be a very strange kind of good whose production function includes fixed costs per country
c) Electricity is both rivalrous and excludable. In any case it's weird to have a country as a unit fixed costs for versus, say a city or a settlement
a) If country A and Country B are both low income countries (lower than median country) and country A is larger than country B, country A can produce more goods internally with lower than median labor cost. Country B could be right next to four other low income countries, in which cases your assumption holds, but it could be surrounded by high income countries or an Island or something else. In one case, you have a guarantee that more goods can be produced at reasonable distances. In the other case, it's one of the possibilities. So on average, the claim still stands.
Also a large country can (somewhat) optimize it's infrastructure for transportation between it's different regions, coordinating that kind of investment across national borders is harder
In reality, it's even worse. Most borders are not perfectly porous for goods or labor. Costs get added along the way. Large labor supply within a country also means higher efficiency in the process of mapping labor to jobs.
So within most nation states, transfer payments fromt he state to citizens isn't counted in GDP (since that would be double counting it). I assume in Gaza's place, the source of any govt spending is aid from the intl community. So for this exercise, everything that Hamas receives from the international community as aid is treated exactly like income from exports. It's probably not double counted when Hamas pays Gazans welfare
Makes sense. My more general point is that UNRWA's budget in 2023 was ~$1.5B. If all of that showed up in Gaza's GDP, it would represent more than 25% of its GDP.
I assume it already does show up? I'll go and check on this but economic data from the palestinian territories is generally terrible, from my cursory exploration
Ya possibly, but can argue strong shekel also makes it harder for them to export, hence putting downward pressure on gdp. But something tells me it's not the strength of currency that's the limiting factor there.
By the way Gaza is a lot like Kerala and Cuba, high rates of education, high rates of unemployment, completely dependent on outside aid. The UN, left-wing NGOs, Israeli food shipments, and humanitarian groups and such are to Gaza what the Gulf remittances are to Kerala and what the USSR $$ was to Cuba.
Never thought about it like that. I just came back from Kerala (my family is originally from there ) and it’s my hobby horse to educate everyone about kerala’s ridiculously toxic political culture. (the communism, Islamic radicalization, all of it). Here’s something trivial that exemplifies all of it- there was a state wide strike/protest when saddam went to the gallows . Like what ?
Is it just that Kerala is very non-Hindu and very Muslim, so it’s left-wing and anti-BJP by default? Bengalis also have a long history with communism and left-wing Bengali nationalism (Bangladesh is a Peoples’s Republic) probably not as much nowadays.
I know that Tamil Nadu also has a tradition of this crap. The DMK was run by a guy named Stalin and supports the terrorists in Sri Lanka. Some anti-Brahmin sentiment. Maybe to some extent it’s a Dravidian thing?
Kerala is almost equally Hindu, Christian and Muslim. Historically, the Muslims have been split between the communist party and the Muslim league, which allied itself with the congress. But the communists are currently in power. The communists are often soft on the Islam issue (replicating the general trend of alliance between the left and political Islam) but it’s more of a convenient alliance.
Kerala, unlike Tamil Nadu, hasn’t been part of any active secessionist movement - more just ideological Marxism that’s often hostile to the nation state. Honestly, believe it or not, I just learned that the guys name was Stalin this week. I honestly couldn’t believe it. I’m surprised and impressed you know (I assume you’re not Indian?). Can send you a podcast that delves into the Dravidian seccessionist movement in more depth if you’re interested
Yeah, I am not Indian. I have lots of Indian friends though. I subscribed to your substack so I think you can see my email address (don't post it publicly). I would be happy to get emails about the Dravidian secessionism.
Anyway, yeah, I forgot to mention that one of the sources of income for Gaza, among the other ones I mentioned, was the guest workers who worked in Israel and helped plan 10/7. Disgusting. An Israeli friend referred to the economic system of Gaza as "UN communism". I also didn't mention money from Iran and Qatar. It's hard to name all the sources of outside income that come to Gaza.
One difference between Gaza and Kerala/Cuba is that Hamas is obviously not nearly as hostile to free markets as the governments of Kerala and Cuba. The Muslim Brotherhood is typically pro-market, as one can confirm by a quick Google search. Practically, I'm not sure this makes much of a difference. On this topic it's also worth noting that Gulf monarchies are clearly very pro-market, but the Iranian regime is very anti-market and I've heard it described as a "command economy" due to the role of the IRGC. Not a coincidence the 1979 revolution was supported by communists and by the working class. The Shah was a huge capitalist. Iran is "Islamocommunist" rather than "Islamofascist" like Hamas. Iran is very dependent on oil as a $$$ source, in the same way Gaza/Kerala/Cuba were/are on outside aid.
Important to note that Gaza (and the West Bank) have incomes below that of the surrounding Arab countries like Jordan at $4,000 or Egypt at $3,700. (Not to mention much higher incomes in Syria and Lebanon before their recent declines).
The World Bank says that Palestine is 3663.97 USD/capita for 2021 compared to 3698.83 for Egypt. Not much of a difference. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=PS-EG-JO-SY-LB
Point 3 is quite bizarre.
a) Why are low cost countries further away on average than high cost countries? Also, large countries would be paying the same amount for shipping(intranationally) - goods should be expected to move the same amount of distance. Is there anything specifically about crossing national borders that is costly?
b) Same - it would be a very strange kind of good whose production function includes fixed costs per country
c) Electricity is both rivalrous and excludable. In any case it's weird to have a country as a unit fixed costs for versus, say a city or a settlement
a) If country A and Country B are both low income countries (lower than median country) and country A is larger than country B, country A can produce more goods internally with lower than median labor cost. Country B could be right next to four other low income countries, in which cases your assumption holds, but it could be surrounded by high income countries or an Island or something else. In one case, you have a guarantee that more goods can be produced at reasonable distances. In the other case, it's one of the possibilities. So on average, the claim still stands.
Also a large country can (somewhat) optimize it's infrastructure for transportation between it's different regions, coordinating that kind of investment across national borders is harder
Yup you have larger buckets across which to make efficiency trade offs- great point.
In reality, it's even worse. Most borders are not perfectly porous for goods or labor. Costs get added along the way. Large labor supply within a country also means higher efficiency in the process of mapping labor to jobs.
The CIA link says India $6,600 and Gaza $5,600
How are transfer and aid payments considered in this? Didn't Qatar and other countries send money to Gaza?
So within most nation states, transfer payments fromt he state to citizens isn't counted in GDP (since that would be double counting it). I assume in Gaza's place, the source of any govt spending is aid from the intl community. So for this exercise, everything that Hamas receives from the international community as aid is treated exactly like income from exports. It's probably not double counted when Hamas pays Gazans welfare
Makes sense. My more general point is that UNRWA's budget in 2023 was ~$1.5B. If all of that showed up in Gaza's GDP, it would represent more than 25% of its GDP.
I assume it already does show up? I'll go and check on this but economic data from the palestinian territories is generally terrible, from my cursory exploration
Gaza GDP is a bit inflated by the strong shekel
Ya possibly, but can argue strong shekel also makes it harder for them to export, hence putting downward pressure on gdp. But something tells me it's not the strength of currency that's the limiting factor there.
By the way Gaza is a lot like Kerala and Cuba, high rates of education, high rates of unemployment, completely dependent on outside aid. The UN, left-wing NGOs, Israeli food shipments, and humanitarian groups and such are to Gaza what the Gulf remittances are to Kerala and what the USSR $$ was to Cuba.
Never thought about it like that. I just came back from Kerala (my family is originally from there ) and it’s my hobby horse to educate everyone about kerala’s ridiculously toxic political culture. (the communism, Islamic radicalization, all of it). Here’s something trivial that exemplifies all of it- there was a state wide strike/protest when saddam went to the gallows . Like what ?
Is it just that Kerala is very non-Hindu and very Muslim, so it’s left-wing and anti-BJP by default? Bengalis also have a long history with communism and left-wing Bengali nationalism (Bangladesh is a Peoples’s Republic) probably not as much nowadays.
I know that Tamil Nadu also has a tradition of this crap. The DMK was run by a guy named Stalin and supports the terrorists in Sri Lanka. Some anti-Brahmin sentiment. Maybe to some extent it’s a Dravidian thing?
How long has Kerala been like that?
Kerala is almost equally Hindu, Christian and Muslim. Historically, the Muslims have been split between the communist party and the Muslim league, which allied itself with the congress. But the communists are currently in power. The communists are often soft on the Islam issue (replicating the general trend of alliance between the left and political Islam) but it’s more of a convenient alliance.
Kerala, unlike Tamil Nadu, hasn’t been part of any active secessionist movement - more just ideological Marxism that’s often hostile to the nation state. Honestly, believe it or not, I just learned that the guys name was Stalin this week. I honestly couldn’t believe it. I’m surprised and impressed you know (I assume you’re not Indian?). Can send you a podcast that delves into the Dravidian seccessionist movement in more depth if you’re interested
Yeah, I am not Indian. I have lots of Indian friends though. I subscribed to your substack so I think you can see my email address (don't post it publicly). I would be happy to get emails about the Dravidian secessionism.
Anyway, yeah, I forgot to mention that one of the sources of income for Gaza, among the other ones I mentioned, was the guest workers who worked in Israel and helped plan 10/7. Disgusting. An Israeli friend referred to the economic system of Gaza as "UN communism". I also didn't mention money from Iran and Qatar. It's hard to name all the sources of outside income that come to Gaza.
One difference between Gaza and Kerala/Cuba is that Hamas is obviously not nearly as hostile to free markets as the governments of Kerala and Cuba. The Muslim Brotherhood is typically pro-market, as one can confirm by a quick Google search. Practically, I'm not sure this makes much of a difference. On this topic it's also worth noting that Gulf monarchies are clearly very pro-market, but the Iranian regime is very anti-market and I've heard it described as a "command economy" due to the role of the IRGC. Not a coincidence the 1979 revolution was supported by communists and by the working class. The Shah was a huge capitalist. Iran is "Islamocommunist" rather than "Islamofascist" like Hamas. Iran is very dependent on oil as a $$$ source, in the same way Gaza/Kerala/Cuba were/are on outside aid.
Don’t forget the Gaza guest workers in Israel (like the ones who did 10/7).