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Refugee Compensation: Why the Parties have been Unable to Agree and Why it is Important to Compensate Refugees for Losses

Source: Pp. 102-108 in Palestinian Refugees: Old Problems - New Solutions, Joseph Ginat and Edward J. Perkins (eds.). Norman: University of Oklahoma Press, 2001.

By Emanuel Marx

Added on December 29th, 2001

The opinions of both Palestinian and Israeli statesmen regarding Palestine Refugee Compensation have been set out in Don Peretz' groundbreaking survey (Peretz 1995). Rex Brynen (1996), Elia Zureik (1996) and Shamay Cahana (1997) brought the discussion forward until 1997. One point emerges clearly from these studies: that both parties have skirted the issue of why and how to compensate the refugees, and left it to the final status negotiations. So far Palestinian spokesmen have put all the emphasis on the Return ( 'auda ), the reinstatement of all the refugees to their former homes and properties. Therefore they have never explored alternative or additional options, such as granting the refugees living in camps ownership titles to their homes, paying the refugees and their descendants compensation for loss of property and missed life chances, resettling refugees in Palestine and, of course, negotiating an agreement on the return of a specified number of refugees to Israel. (They may, however, be doing it at this very moment). As to the Israeli authorities, they have for almost fifty years stuck to the notion that over the years, and especially from 1948 onward, a de facto population transfer has taken place, in which both Palestinians and Jews from Arab countries were dislodged from their land and property. While frequently arguing that the material losses on both sides were equal and should be set against each other, Israeli leaders never formulated a comprehensive policy regarding the treatment of Palestinian refugees.

This leaves us with two perplexing questions:

  • Why have the parties so far been unable to formulate policies regarding the compensation for refugees?
  • Why is it so important to compensate individual refugees for losses sustained half a century ago?

Concerning the first question I argue that the State of Israel's continuing efforts to achieve a monopoly on land have so far blocked any thoughts of handing over land to Palestinians, and that the Palestinian Authority's insistence on the Return as the only acceptable solution to the refugee problem is an inevitable reaction to this position. As to the second question, I believe that people memorize material losses as perpetual debts. Debts that are not redeemed remain open sores. Therefore it is incumbent on states, which intend to make a lasting peace to compensate the individuals who suffered and sustained losses in the course of acts of war. If these persons are no longer alive - their rights do not lapse but pass on to their descendants.

The State of Israel's resistance to both the return of Palestinian refugees and the payment of compensation is longstanding, as documented by Shenhav (1999). It is based on the argument that the 1948 war created refugees both among the Palestinians and the Jews in the Middle East. In 1982, the then Minister Mordechai Ben-Porath, himself a Jew of Iraqi origin, chaired a Ministerial Committee on a solution to the Palestinian refugee problem. In his Foreword to the committee's report Ben-Porath restates this argument. His narrative begins in 1948, when '590,000 Arabs left for the Arab countries and were there put into refugee camps. At the same time 600,000 Jews from Arab countries arrived in Israel'. He ends with the to him obvious conclusion that ' .the solution to the problem of the Middle East refugees is by resettlement.' (Aner 1984: 5). The thinking lying behind this story is that the events following the establishment of Israel turned both Jews from the Arab countries and Palestinians into refugees. They left behind property, most of which was then taken over by the states concerned. Thus two linked accounts were created: the number of refugees on both sides was almost equal and the property left behind was presumably of equal value and, anyway, it would be difficult to recover. The State of Israel absorbed the Jewish refugees and thus compensated them for their losses. If the Palestinian refugees too were resettled in their present locations there would no longer be a need to compensate them. The Palestinian refugee camps would be dismantled and there would no longer be a refugee problem. In line with this feat of wishful thinking the Ministerial Committee concluded that the refugee issue should be discussed within the framework of peace agreements between Israel and the Arab countries. (We must remember that the invasion of Lebanon in 1982 created a political climate that could disregard the fact that a peace agreement between Egypt and Israel had already been concluded in 1977). At that time 'Israel will demand that the Arab countries absorb the refugees living in their territories, as against [Israel's] absorption of the Jewish refugees from Arab countries' (Aner 1984: 45). The committee thus adopted Israel's traditional position, but also introduced a new idea, namely that on humanitarian grounds Israel should resettle the inhabitants of refugee camps in the Occupied Territories.

The argument was not motivated by a concern for the Jewish immigrants from Arab countries, for the State of Israel never demanded compensation for their losses. They were always considered immigrants who chose to come to Israel and only in this special context did they become 'refugees'. Needless to say, these Jewish immigrants had not appointed the State as their attorney. The State's real concern was, and still is, to remain in possession of the land and property that the Palestinians left behind. It has by various means, whether legal sequestration, administrative decree or by the forcible removal of the original owners, established ownership over 93 per cent of all the land in the country. This trend has not abated; the State still seeks to increase its land holdings (Marx 2000). Its agent, the Israel Lands Authority, does not usually sell land. Instead, it gives Jewish users 49-year leases to parcels of land; its regulations do not permit the leasing of land to Arab citizens. The State of Israel is incapable of giving up land. Its leaders and politicians cannot conceive the possibility of restoring large areas of land to the original Palestinian owners. Perhaps this explains the seeming paradox that in the absence of specific policies regarding the Palestinian refugees, Israel's reactions to the demands made from time to time to reinstate Palestinian refugees to their lands have for 50 years remained so consistent and unchanged.

To Israel's flat refusal to receive or compensate the refugees, the Palestinian representatives could only react in one way: to demand the complete reinstatement of all Palestinian refugees to their former homes and properties. They still feel that Israel's proposals are unjust; if they were implemented, only the Arab States and the Israeli State would benefit, whereas neither the Palestinian State nor the individual Palestinians who sustained the losses would receive any compensation. It would also introduce numerous states, each with its own agenda, into negotiations concerning solely the Palestinians and the Israelis. The Arab countries would, for instance, argue that the Jews left of their own free will, that many Jews sold their property before emigration, and that therefore they were not obliged to discuss the issue of compensation.

The history of the idea of the Return parallels that of the Israeli refusal to deal with the refugee issue. It is enshrined in UN Resolution 194 (III) of 1948, paragraph 11 of which 'resolves that the refugees wishing to return to their homes . should be permitted to do so at the earliest practicable date, and that compensation should be paid for the property of those choosing not to return' (Ofteringer 1997: 140). It reappears in paragraph 9 of the Palestinian Compact of 1968, as 'the liberation of the motherland and return to it' (Harkavi and Steinberg 1988: 95), but without the option of compensation. Various studies of refugees testify to the paramount importance attached to the right of Return (Khalidi 1989: 196; Farah 1997: 270-277). A 1968 study of Jalazon camp found that the idea of the Return was not only accepted unanimously by persons meeting in public, but was also found to underlie much of the camp's social organization. For instance, the neighborhoods were initially based on village origin and people from the same village still tend to intermarry (Ben-Porath and Marx 1971: 15-16). A recent study of the attitudes of Palestinian refugees by a research team made up of Palestinians and Israelis still finds that 'Return is probably the one magic word that can fulfill the Palestinians' longing for the original homes and lands that they have never really forgotten' (Yahya 1998: 64).

These set attitudes are not likely to change, precisely because they have never been thoroughly examined by either of the parties nor discussed by both parties. The Multilateral Working Group on Refugees set up at the Madrid Peace Conference of 1991 was convened six times in five years. At all these meetings the Palestinian delegation regularly raised the issue of the Return, while the Israeli delegation as regularly refused to discuss it (Cahana 1997: 7-27). A recent meeting of Israeli and Palestinian academics and former politicians, arranged by Harvard University's Weatherhead Center for International Affairs, attempted to seek a compromise between the positions. The Israeli representatives were adamant: 'Israel would pay collective compensation to the Palestinian State, paralleled by Arab State compensation for Jewish refugees from 1948' (Alpher and Shikaki 1998: 1). And the men who formulated this declaration were academics, not politicians! The Palestinian participants were more flexible; they insisted that Israel recognize, in principle, the right of Return, but agreed to restrict the number of returnees. They did, however, demand that 'Israel would pay both individual and collective compensation' to Palestinians ( ibid. ). It should be clear by now that the twin issues of the return of Palestinian refugees to Israel and to Palestine and the payment of compensation to those preferring not to return must be discussed and some solution agreed upon before the parties can implement peace.

Why is individual compensation of Palestinian refugees so critical? And why is it more important for the establishment of peace in the Middle East than either the return of the refugees or payment of collective compensation? For states only conclude peace treaties, while peace is made between peoples. A lasting peace between Palestinians and Israelis must be based on a dense network of links between the two peoples. The peace treaties between the states will regulate the borders and provide security measures, establish controls on the movement of people and goods, and set up fiscal obstructions to free trade. Such regulations would be implemented by a growing bureaucratic staff, which would make every effort to entrench itself and to set up elaborate control mechanisms. Peace must then be fostered by the people of Palestine and Israel, against very heavy odds.

But before such relationships can be established the people on both sides must be reconciled and become more tolerant to each other. The hatred and resentment accumulated over generations must be overcome, and wounds must be healed. That there is such a problem comes out clearly in informal intercourse with Palestinian refugees. The memories of a lost home, of land and property left behind and the social upheaval that accompanied their flight, are indelibly etched in their minds (Shamir 1980: 150; Farah 1997: 291). Each household keeps legal documents, such as tax receipts and land registration documents, which have become reminders of a happier past. People may turn a simple artifact, such as a house-key, into a symbol that elicits detailed itemized accounts of the property to which it gave access. It may arouse memories of the abrupt loss of property and life chances. It may also remind people of the injustice perpetrated on them, and cause them to realize that the world has forgotten them and that no one has compensated them for their losses. Such profound reactions can be observed not only where people witnessed the past, but also by members of a second and third generation. These sentiments are never far from the surface. In meetings with refugees the issue of their lost property crops up regularly. No sooner is the theme broached than their anger flares up and they hold their interlocutor, especially if he is as an Israeli, partly responsible for their plight. This issue must be attended to. Only when the refugees are compensated for these losses, will they be able to turn a new page, though without ever forgetting that they are refugees (Marx 1992: 293).

Refugees who are not compensated for their losses may pass their resentment on to descending generations. The best illustration are the refugees created by the 1922 war between Greece and Turkey, which ended with the signing of the Lausanne treaty of 1923. The two governments consented to a population transfer, as a result of which over a million persons became 'Greeks' and 350,000 people became 'Turks' who lost their homes and property. Hirschon's (1989) study of a settlement of Asia Minor refugees in Pireus found the 'Greek' refugees, fifty years after their arrival in Greece, still to be refugees. They still considered themselves to be people from Asia Minor and had little respect for the local Greeks (Hirschon 1989: 23). Many of them still spoke Turkish among themselves ( ibid. 29). While the Greek State had housed them in state-owned makeshift accommodation, it had never compensated them for their losses. The refugees resented both the Greek and the Turkish authorities for having left them in the lurch. This resentment is spread throughout the refugee populations in both countries. It has poisoned the relations between the countries and has fed into their sporadic disputes. It flares up at the slightest pretext. Thus the disagreements between Moslem and Christian Cypriots repeatedly brought the two countries to the brink of war.

Compensation provides a substratum on which economic and other relationships may grow and thrive. If the Palestinians and Israelis could establish dense networks of economic relations, these would reinforce peaceful relations. But the chances for developing such ties are quite slim. For in thirty years of Israeli rule, the Palestinian economy has been eroded. Not only were local trade, industry and agriculture supplanted by Israeli imports, but the Occupied Territories were also left without a labor force: the Israeli labor market offered higher wages for unlimited numbers of Palestinian workers. In order to collaborate with the Israeli economy, the Palestinians must first develop an independent and competitive economy. Their natural outlets are, of course, the neighboring Arab countries. But at the moment the level of trade between the Arab countries stands at about seven to eight per cent (Feiler and Yisraeli 1996: 29 put the figure at under seven per cent), largely because of the divide between the rich oil-exporting countries and the poor labor-exporting ones. The rich states import goods from all over the world, and seek to control the import of labor from their poorer Arab neighbors, relatives who might eventually claim the rights and benefits of citizenship. Therefore they maintain strict border controls and restrict the import of goods from the poor countries.

Relations between Palestine and Israel are likely to fall into the familiar pattern: the poorer state will export labor to the rich one, while the wealthy one will swamp the market with its products. The Palestinian State will need to throw up high tariff walls, in order to protect itself against the inroads of the Israeli economy. The import restrictions are likely to remain in force for as long as the Palestinian economy is insecure. The Palestinian State is likely to discourage labor migration to Israel, because this would withdraw the most skilled and entrepreneurial segment of its manpower. It seems that neither now nor in the foreseeable future will the Palestinian authorities be interested in the movement of Palestinians to Israel. It appears that Palestinian economic interests are totally opposed to the movement of Palestinians to Israel, either as migrant workers or as settlers, as distinct from the ideological demand for a Return. If Israel were to adopt a more flexible position toward the return of Palestinian refugees and agreed to compensate them for losses, the Palestinians would probably respond positively and the seeming contradiction could be reconciled.


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Zureik, Elia T. 1996 Palestinian Refugees and the Peace Process . Washington: Institute for Palestine Studies.

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