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Palestinian development under occupation is a delusion

The notion of Palestinian economic development while under Israeli occupation has again been promoted, notably by US Secretary of State John Kerry, as the means to advance the cause of peace through negotiations. Those following such matters in Palestine fear that media hype will blind people to the impossibility of achieving sustainable economic development while Israel continues to occupy, settle and Judaise Palestinian territory.

Talk of economic development under such circumstances ignores the fact that Israel controls the most important keys to the Palestinian economy. Studies indicate that Israel dominates about 96 per cent of all Palestinian imports and exports, and now the deficit in the Palestinian balance of payments is the foundation of a very forced relationship between the Palestinian and Israeli economies.


As a result of the decline in the Palestinian economy, which is due to Israeli efforts aimed at marginalising its various sectors, thousands of individuals from the Palestinian labour force have been driven to find work inside Israel, benefiting the Israeli economy, not their own.

The land itself is one of the most important elements of production which can boost future development but it requires the dismantling of the key aspects of the Israeli occupation such as the illegal settlements and checkpoints in order for the land to fulfil that role. The occupation, therefore, is actually stifling the means of production on Palestinian land, to the detriment of the economy. Despite the talk of economic development and negotiations, the Israeli government under Benjamin Netanyahu has continued to build and expand illegal settlements all over the occupied West Bank, removing ever more land from the Palestinian economic equation. Today there are more than half-a-million illegal Jewish settlers in strategically-placed settlements in the West Bank; 200,000 of them live in occupied Jerusalem, which is now surrounded by settlements, cutting the city off from its natural West Bank hinterland.

Israel has never tried to hide its intentions for Jerusalem; the plan is to seize as many properties, land and districts as possible in the drive to Judaise the city. Palestinians are now a minority in their own city and the Judaisation process is intended to make sure that they do not exceed 12 per cent of the population by 2020.

Given the obvious reality of the Israeli settlements in the Palestinian territories, how can genuine economic development under Israel’s military occupation even be discussed, let alone given serious consideration?

Statistics demonstrate that after a prolonged occupation (1967-2013), Israel’s economic policies have had a number of disastrous effects on the Palestinian economy. Despite signing the Oslo Accords in September 1993, the most important keys to the Palestinian economy remained under full Israeli control; the Palestinian market is Israel’s second after the US. Israeli control over the number of Palestinian workers it allows to cross the Green (Armistice) Line means that it retains control over at least 20 per cent of Palestinian national income. In fact, the Israeli authorities control approximately $50 million a month in taxes imposed on Arab workers from the West Bank and Gaza Strip who work in the Israeli economy. This lays the Palestinian Authority open to constant political blackmail.

The siege of Gaza and Israel’s military activity in the beleaguered territory, and in the West Bank, has contributed to Palestine’s economic decline. According to the data from the World Bank, unemployment has escalated to around 60 per cent, and extreme poverty has spread, affecting two-thirds of all Palestinian families living under occupation.

Nevertheless, the International Quartet continues to speak of boosting the Palestinian economy without tackling the occupation. Using former British Prime Minister Tony Blair as a front-man, the Quartet’s plan is to expand the economy by 50 per cent, reduce unemployment by two-thirds and increase wages by about 40 per cent by pumping-in $4 billion over the next three years.

Those behind the plan appear to have ignored the fact that the increased growth rates in the Palestinian GDP for the years they are talking about, at rates ranging from 2 to 3 per cent per year, require an annual investment of no less than 60 per cent of the GDP under suitable and appropriate investment circumstances. That means that they must be free from the restrictions imposed by Israel, such as the control of large areas of Palestinian territory, especially agricultural land, as well as border crossings, water and natural resources. They also appear to be happy to abide by the Paris economic agreement, which provides for full Israeli domination of the Palestinian economy and control of its performance.

To confront the delusions of development under occupation, there must be alternative Palestinian plans that take into account the economic capabilities of the Palestinians in Palestine and across the Diaspora. Accordingly, the silent majority of Palestinians and the various economic activities must come together to create a promising future for an independent Palestinian state, giving an official and public Arab dimension to the development plans. The Arab world possesses massive economic capabilities and potential, contributing around 30 per cent of the world’s oil production annually and, at the same time, accounting for 60 per cent of the oil reserves.

In addition, there are at least six Arab investment funds capable of funding projects in the Palestinian Territories and creating opportunities for bilateral trade between the Arab countries and the Palestinian economy free international pressure guided by Israeli interests.

Independent Palestinian development requires, first and foremost, political will, and starts with forgetting the delusion that the Palestinian economy can be developed under Israel’s brutal occupation. It also requires strong politicians to demand the dismantling of the occupation infrastructure, including the Apartheid Wall, settlements, settler-only roads, checkpoints and house demolitions carried out “for security purposes”.

International resolutions acknowledge the illegality of Israel’s expansionist policies and attempts to change the demographics in the occupied Palestinian territories, including Jerusalem. The Palestinians now need international action to enforce those resolutions. Only then will we be able to talk realistically about Palestinian economic development free of, not under, Israeli occupation.

The author is a Palestinian writer. This article is a translation from the Arabic which first appeared on Al Jazeera net, 24 June 2013

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.

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