BY MARY SERUMAGA NOVEMBER 29, 2023
Like other British imperial possessions, Palestine was acquired on the cheap and under false pretences, official corruption sealing a deal doomed to end in perpetual violence.
“Zionism will fail, the experiment to which the noble Earl referred will fail, the harm done by dumping down an alien population upon an Arab country – Arab all around in the hinterland – may never be remedied…what we have done is, by concessions, not to the Jewish people but to a Zionist extreme section, to start a running sore in the East, and no one can tell how far that sore will extend.”
– British Government, Hansard, House of Lords, 21 June 1922, p. 1025
Although Palestine fell under the sway of the British Empire more than twenty years after what became the Uganda Protectorate (1894) and Kenya Protectorate (1895), the rationale and methods of effecting the conquest were the same. Southern Rhodesia, now Zimbabwe (1923) became a British colony in the same month and year the British Mandate over Palestine came in to force. Like Palestine, Tanganyika (1919) was put under British Protection by the League of Nations having been confiscated from Germany, a previous imperial power that had lost its colonial territories to reparations in the Versailles Treaty.
To understand how Palestine became a British Mandated Territory it is necessary to return to the 19th century when, together with what became Iran, Iraq (Mesopotamia), Syria, Jordan, Lebanon and Palestine, were part of the Ottoman Empire. Chotzidis’s paper indicates that the Ottoman Empire (OE) was heavily in debt on the international money market as well as to domestic banks, in 1917. Much of the debt arose from persistent budget deficits consequent on the extravagance of the Sultan (who had no difficulty borrowing on the international market despite his known poor governance). The OE’s participation in the Crimean War (1854-56) added to the unsustainable debt burden.
Interest payable on the debt reached 56 percent of revenue in 1874 causing the Sultan to default in 1876. He decreed (without consultation with his creditors) that interest payments were to be halved. His domestic creditors pushed for an agreement under which the OE ceded six sources of revenue to the bankers: tobacco and salt monopolies in the empire (for a decade); stamp duty, and some commodities taxes. Using these revenues, the banks were able to bring the interest payments up to date. European creditors then exerted pressure for the creation of the Ottoman Public Debt Administration (OPDA) to manage the OE’s revenue collection and debt payments on behalf of the European bond-holders and other creditors, a sort of precursor to the International Monetary Fund (IMF). The Ottoman Empire fell after its defeat in the First World War after which the League of Nations made its constituent parts, including Palestine, mandated territory.
THE OPDA board members were so enterprising that they hired contractors to invest in sectors from which the OPDA collected revenues. Many of the contractors who were awarded concessions had members on the OPDA board of directors. The firms were paid to run these enterprises as well as share in the profits. The terms were more than favourable: guarantees of minimum weights of cargo to run on the railways they built failure to meet which resulted in the balance having to be paid to them in cash. Railway companies were given ownership of oil and other minerals found twenty kilometres on either side of the tracks; sheep tax and commodity tithes (taxes) collected along the tracks were to be paid directly to the OPDA and the amounts were also guaranteed.
Once the Palestine Mandate took over, the OE contractors demanded compensation from the British government – i.e. oligarchs profited during boom time, while the tax payer bore the losses once the businesses failed.
Palestine as a Mandate Territory 1918-48
Britain applied this business model in Palestine, now a territory independent of the Ottoman Empire. Palestine’s status as a colony is clear. In the debates in the British Parliament, Palestine is referred to throughout as a conquered territory, a colony, and a possession. When demanding that British firms be allowed some concessions for development projects in Palestine, J. Butcher MP stated: “We are in Palestine as a conquering nation and demanded that British workers and manufacturers have a share in the spoils (Hansard, HC Deb 04 July 1922). In defending the award of two major concessions to one Pinhas Rutenberg, Winston Churchill, Colonial Secretary said, “This concession follows in every respect the regular lines of Colonial Office procedure. It has been framed in the Colonial Office in exactly the same manner and spirit as if it related to East Africa, Nigeria, Ceylon or any other of the Crown Colonies” (EGYPT. HC Deb 14 March 1922).
What are the regular lines of Colonial Office procedure? Beginning with the rationale for a colonial presence in a region; colonial subjects needed protection and their assets needed to be held in trust for them. The East Africa Report of 1925 by the Colonial Office put it this way: “During our tour of East Africa we were frequently told by Europeans, officials and unofficials alike, that the African native is a ‘child.’ Without questioning the truth of such a generalisation, it at any rate suggests that the position of the European race ruling in Africa is that of a guardian to a ward, and that our duty is to protect the interests of someone less capable of safeguarding his or her own interests” (Report of the East Africa Commission to the Right Honourable L. S. Amery, M.P., Secretary of State for the Colonies, 1925).
As with other colonies, Palestine had to be made to prosper economically and where possible to cover its own costs. Colonies were required to maintain a reserve fund at the Exchequer, something that the Uganda Protectorate had no trouble doing. Uganda and most of the other colonies balanced her own budget through revenues from Native Poll Tax, an array of commodity taxes and monopolies of the export of those commodities (colonists were exempt from income tax). Ancillary industries such as cotton ginning were prohibited for Africans in Uganda (which later caused political unrest). Indigenous Kenyans were not allowed to grow coffee and other crops considered profitable.
For example, total revenues for Uganda in 1939 and 1940 were from local sources:.....