Palestinian Economy as a Weapon

By Hasan Afif El-Hasan

Two different reporters have different opinions about the West Bank economy. Bassem Roomie, a reporter for Media Line located in Palestine writes about optimistic economic growth in the West Bank. And in the same week, Griff Witt, a reporter for the “Washington Post”, writes about how the West Bank barriers erected by the Israeli occupiers, that keep growing, are impacting the daily life of the Palestinian workers in a negative way.

Roomie states that recent development in the West Bank had “generated double digit growth estimated at 10 percent at the end of 2007”. He goes on to say that “entrepreneurs feel quietly optimistic about the state of their economy. They hope this growth can be maintained at 10 percent for the next three years according to the [Palestinian] government plans”.

For the un-informed reader, the ten percent growth in the economy suggests the Palestinians have become prosperous and their living standards are something to brag about. But ordinary Palestinians living in the West Bank take issue with this report because it misrepresents the real state of their economy.

Griff writes in Washington Post on March 6 that, “To travel from his home in a West Bank village” to his job in Nablus, Karim Adwan, a skeptic about the prospects of peace, “must take at least two cabs, skirt a barbed-wire fence, climb a dirt mound, talk his way through multiple Israeli checkpoints and remove his shoes for a full-body security check”. Before occupation, “[the trip took] 30 minutes. Now it takes two hours”.

The West Bank has become disconnected enclaves divided by illegal settlements and hundreds of checkpoints, roadblocks and earth mounds erected by the Israeli military and the settlers. They restrict people and merchandize movements, causing economic hardship and making development impossible. Until June 25 and before Hamas took control of Gaza, All Palestinians were under international economic embargo because they voted for a party that does not recognize their occupier. The large segment of the Palestinians who depend on their government salaries and the businesses that serve them were starved.

Considering the scale of destruction inflicted on the Palestinian territory infrastructure and private properties by Israel, it is hard to believe that the economy of the territory switches to prosperity over night when Israel released 100 million dollars of the Palestinian tax money that it had levied on their behalf. Israel has been bulldozing and demolishing many public buildings and targeting roads, medical centers, water facilities, schools and agricultural private resources since the second Intifada. The destruction of the physical infrastructure alone in the occupied land accounts for big part of the donor assistance according to a 2003 publication by “Christian Aid: London”. The Israeli occupation, colonization and actions are incompatible with development.

The “Media Line” report does not account for the economic disastrous effects of the wall that has encircled Palestinian population areas and trapped more than 270,000 Palestinians in a no-man’s land between Israel proper and the wall. The wall had imposed “very grave economic and social consequences” on the Palestinians according to Amnesty International.

The Media Line does not factor the economical aspects of cutting off the 200,000 Palestinian residents of East Jerusalem from the hinterland.

How about Hebron and Nablus, the Palestinian cities that were once the thriving commercial hubs of the southern and northern West Bank? Hebron mayor, Khaled Osaily stated that much of the shops in its commercial center are boarded up because of the presence of some 800 Jewish settlers and their military protectors.

And Nablus with its 140,000 residents has become an exhibit for Israel’s savagery and disregard for the Palestinian’s lives and well-being. The old sector of Nablus famous for its unique architecture that survived hundreds of years of history has been reduced to rubble by the Israeli occupation war machine. Instead of prosperity, Nablus businesses continue to suffer from the worst ever economic depression. And in the West Bank sector of the Jordan Valley, Palestinian farmers are not allowed to dig wells more than a third as deep as the next door Jewish colonialists.

The “Media Line” report does not qualify its rosy conclusions and predictions. It does not state that to have any semblance of economic improvement, the leadership of Ramallah should not break the political and security rules set by Israel and approved by the West. There are structural fault-lines that make any optimism under occupation a stretch of imagination or wishful thinking because the Palestinians’ economic conditions are captive to the Israeli leaders’ politics, ideology and whim. And Israel is demonstrating in Gaza how it can manipulate the overall economy and the daily life of the Palestinians.

After June 25 when Mahmoud Abbas sacked the Hamas led government and appointed the emergency government, Israel used its military powers and the Oslo agreements, to which the Palestinian cause is still held hostage, to create two Palestines, the West Bank and Gaza. One where people hope for receiving their salaries by the end of the month as long as their leaders meet the conditions set by Israel, and the other Palestine, Gaza, where 80 percent of the people live below the poverty line and rely on basic rations for survival if they dodge the missiles and bombs dropped by the Israeli F-16 airplanes and apache helicopters day after day. The vast majority of the Gazans are wallowing in poverty, neglect, alienation, bitterness and a deep sense of deprivation. The Israeli colonialists decided that the Gazans must be doomed to starvation because a group within the territory breaks the rules laid down by Israel.

Control of the Palestinians basic economic functions were delegated to the Israeli colonialists by the economic arrangements in the Paris Protocol and Cairo agreements that followed the Oslo 1993 agreements. Israel subcontracted the PA to manage education, health, social welfare and tourism while retaining the power to control development. Ha’aretz quoted Shemon Peres saying while negotiating the 1993 Paris Protocol agreement, “In some ways we [the Israelis] are negotiating with ourselves”. Israel retained control or veto power in all the strategic areas that impact the economy of the Palestinians under the PA. These include energy, water, industry, financial development, trade, transportation, communications, media and international aid. Paris Protocol denied the Palestinian Authority any power to make independent economic decisions. It did not address the expropriation of Palestinian land, water and other resources and it surrendered the power of direct taxation to Israel. And imports from countries other than Israel were restricted by market needs as decided by an Israeli-Palestinian committee, but such imports should originate only from Jordan or Egypt. The Paris Protocol made the Palestinian economy subservient to Israel’s own economy.

While, according to the “Media Line”, the PA government in Ramallah claims big economic growth in the West Bank and disregards Gaza economy, the “Independent” newspaper writes that the crippling Israeli blockade has left humanitarian conditions in Gaza at their worst level in 40 years. It adds that the Strip is overwhelmed by poverty and power blackout of up to 12 hours a day. Israel refuses to provide the fuel to power hospital generators, pump running water and operate the sewage systems. Unemployment is at fifty percent, and ninety-five percent of its industrial operations have halted because of the Israeli blockade and the international economic embargo. Ignoring Gaza, home to 1.5 million Palestinians in these over-optimistic reports suggest that the PA has accepted the Israeli plan of having two Palestines, where only one must count. Israel declared the other Palestine, Gaza, as “enemy entity”. The Israeli Deputy Defence Minister, Mata Vilnai, warned on Feb 28 that rocket fired from Gaza by groups of Palestinian’s resistance would bring Palestinians a holocaust “shoah” and two day later, Israel delivered a holocaust.

The strongest weapon Israel has against the Palestinians is the control over their economy. The Palestinians should break their economic ties with Israel before they negotiate other core issues, for it is these ties that will limit their options when the negotiations fail to achieve peace with justice.

-Born in Nablus, Palestine, Hasan Afif El-Hasan,Ph.D, is a political analyst. He contributed this article to

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