How Israel causes Palestine’s economic woes


Palestinian workers queue to cross the Apartheid Wall in Bethlehem.

With Israeli Prime Minister Benjamin Netanyahu set to become the first Israeli prime minister to visit Australia next year, the Australian government will likely seek to deepen economic ties with the self-proclaimed “only democracy in the Middle East”.

It is also likely, if not certain, that Israel’s ongoing strangling of Palestine — economic as well as political and military — will not be mentioned.

There may be many opportunities for Australian-Israeli cooperation in the area of digital technologies, but Palestinian entrepreneurs continue to be denied basic tools needed to operate in the burgeoning digital economy.

The haphazard rollout across the Occupied Palestinian Territories of 3G (yes, 3G — not the 4G or better that many people globally take for granted) telecommunications is a prime example. It was hailed as a breakthrough in December, yet many towns across the West Bank were still without reliable 3G services as of April.

When 3G technology was first rolled out across the Middle East 10 years ago, Israel denied Palestine access using its favourite excuse of “security concerns”. With reliable communications and information exchange being vital for a nation’s economy, the effects in Palestine are particularly acute.

Palestinian access to Paypal, for example, is still denied. Israeli use of Paypal is unrestricted — even in the widely condemned illegal settlements of Israelis on stolen Palestinian land.

The potential for tech sector growth should be a positive for the Palestinian economy — given the Israeli-imposed physical restrictions on the movements of people and materials. But being unable to access Paypal services means the tech sector is unlikely to see much-needed growth and job creation for highly-skilled yet livelihood-starved Palestinians.

The latest United Nations Conference on Trade and Development (UNCTAD) report indicates that the Palestinian economy — based on the occupied West Bank and besieged Gaza — would easily double if not for the impact of the Israeli occupation.

Last year was an especially difficult year for Palestine’s economy. The already struggling Gazan economy — a victim of the blockade Israel has imposed since 2007 — contracted by 15%. Exports from Gaza, according to the World Bank, are stagnating at approximately 6% of pre-blockade levels.

Any other economy taking such a hit would make headlines, yet this shocking reality is limited to little-read United Nations reports.

Israel’s 2014 war on Gaza destroyed 247 factories and 300 commercial premises. Very few have been rebuilt due to difficulties sourcing construction materials and concerns that anything rebuilt would be destroyed in the next airstrike. The captive population of Gaza seems condemned to become even more dependent on aid than it already is, at 73% of the population.

The UNCTAD report said there was a “permanent unemployment crisis in the Occupied Palestinian Territory”, due mainly to the Gaza blockade and the control of the West bank’s Area C by Israel.

Area C — created by Israel’s carve up of the West Bank after the disastrous Oslo accords of the 1990s — accounts for 61% of the West Bank. It also contains the most significant water sources and aquifers, and nearly all the arable land that was previously accessible to Palestinians.

Lack of work and access to land led many Palestinians to seek work in Israel. They face very poor working conditions even when they are able to get a work permit. Legal protections for “Israeli Arabs” (Palestinians who live within Israel’s official borders) are inadequate enough. Palestinian workers from the occupied territories are even more vulnerable and less protected.

The US pledged US$38 billion in military aid to Israel over the next 10 years. This furthers Israel’s capacity to carry out daily repression of Palestinians, as well as exercising control over the movement of goods, people and services throughout the West Bank and Gaza.

Israeli restrictions on goods allowed into Gaza means that very little of the aid promised after the 2014 war has filtered through. Nor has any significant number of destroyed buildings, schools, hospitals and houses been rebuilt. Reconstruction materials — or anything that Israel deems “dual use” (that is, that it claims be “weaponised”) — is heavily restricted.

However, with what little spending power they have left, Palestinians are fighting back. Israel has long treated the occupied territories as a captive market for its products. However, in the first quarter of 2015, the World Bank said Israeli exports to the occupied territories fell by 24% as a direct result of a “growing trend” by Palestinians to purchase goods produced from any other country than Israel.

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