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Palestinian Economy

Palestinian Economy (8)

Having successfully completed its two-year state-building plan, the Palestinian National Authority continues toPaleestinian economy confront the enormous challenges posed by the ongoing Israeli occupation while continuing the momentum towards full sovereignty. Regrettably, Israel, the occupying Power, is attempting to deflect attention from its culpability in the continued deprivation of the Palestinian people’s right to economic prosperity, freedom and independence. The occupying Power has produced a document alleging that the Palestinian economy was unstable despite its certain knowledge that the statement is false and irrelevant.
In fact, this cynical spin of the direct and devastating effects of Israeli occupation on the Palestinian economy is a reflection of Israel’s determination to maintain the status quo. Israel, through deed and rhetoric, works towards indefinitely postponing, if not completely undermining, the Palestinian rightful demand for statehood and independence. It does so by undermining Palestinian institutions and achievements. Israel chose to ignore the international consensus that for Palestine to reach its full economic potential, the Israeli occupation has to end. This is the real reason why the Palestinian economy is still dependent on international aid.
 
In this regard, it is important to remind that statehood and independence are national, inalienable, and legal rights of the Palestinian people. Economic health was never a criteria upon which statehood was recognized nor a factor considered at the United Nations upon the submission of a state for membership in the organization.
 
Palestine is recognized as a state by 132 countries. Furthermore, the Palestinian people’s right to self-determination is internationally recognized and long overdue. It is a fundamental right that is not up for negotiations. Nor can its implementation be subject to whims of the occupying Power, Israel, whose actions are consolidating the occupation and making it irreversible.
 
Various reports produced and endorsed by international parties, such as the EU, the UN, the World Bank and the IMF have concluded that Palestine has achieved the institutional development needed for the state to function, including its economic component. All these reports also concurred that for Palestinian institutions to function to their full potential, the Israeli occupation has to come to an end.
 
Israel’s 44 year-old occupation means control: control of Palestinian land, airspace, sea and territorial borders.  It has also meant control over trade, natural resources, andeconomy economic potential, which have been monopolized by Israel, to the detriment of Palestine’s economy. In 2011, the Palestine National Authority produced, for the first time, a study that calculates the quantifiable cost of Israel’s continued military occupation of the Palestinian Territory. The study revealed that in 2010, Israeli occupation cost to the Palestinian economy amounted to 6.897 billion USD, a staggering 93.3% of the total Palestinian GDP that year.
 
This staggering cost is easily understood in context. Israel continues to maintain exclusive military, civil, and administrative control over 62% of the occupied West Bank, designated as ‘Area C’ in the Interim Agreement. Furthermore, approximately 35% of the Palestinian economy is generated in the Metropolitan East Jerusalem area.[1]
 
Israel’s illegal annexation of occupied East Jerusalem and its separation from the rest of the occupied West Bank also has debilitating economic and social effects. Hence, Israel deprives Palestinians from developing the natural resources of their Territory and tapping into the unfulfilled economic potential of this large area. In addition, Israeli restrictions on Palestinian movement and access in the OPT in addition to its illegal exploitation of Palestinian historic, cultural, and natural resources have severely affected the fledgling tourism industry, which has the potential of being one of the main sources of income in the Palestinian economy. Naturally, these restrictions are detrimental to economic growth.
Israeli movement restrictions reach criminal proportions in the Gaza Strip, whose population has been under an illegal and inhuman siege since 2005. The infrastructure in Gaza requires urgent and massive investments in key sectors such as water and wastewater, electricity, and solid waste. This siege, and despite the slight recovery last year, is highly costly. For example, the extra costs of producing electricity in Gaza under occupation amount to 441 million USD per year.[2]
 
The occupation also stifles the amount of Palestinian fiscal revenues through the prevention of efficient tax collection and the artificial reduction of the size of the Palestinian economy, causing dependence on foreign aid. The total direct and indirect cost of these restrictions is estimated at over USD 1.96 billion per year.[3]
 
Israel also maintains an intricate and multilayered web of movement restrictions in the OPT. The UN’s Office for the Coordination of Humanitarian Affairs (OCHA) reports that Israel has placed an average of 520 permanent checkpoints, road obstacles and other restrictions and an estimated monthly average of 420 internal mobile checkpoints. Furthermore, Israel’s illegal settlement and Wall regime, include Israeli-only roads, has fragmented the OPT and exacted a heavy financial price on the movement of Palestinian goods and persons. In fact, Israeli movement restrictions cost the Palestinian economy USD 185 million in 2010 alone.
 
Recent international reports also confirm that Israeli restrictions on movement of Palestinian goods and people remain a key impediment to private sector investment. According to the most recent IMF assessment, “The [Israeli] restrictions and barriers adversely affect the profitability of investment through their adverse impact on the average level of demand, and by increasing the volatility of demand. um-alnasserCosts are raised through higher transportation costs, difficulties in importing inputs, and through adjustment costs while adapting to fluctuating demand conditions”.[4]
 
In its latest report, “Stagnation or Revival”, the World Bank examined the various Israeli punitive measures that affect the Palestinian economy. These include Israel’s continued use of the funds transfer of Palestinian revenues as a coercive tool to extract political positions. The report states that the Israeli government “put [the] implementation of the [funds transfer] agreement on hold following the signing of the Palestinian reconciliation”.[5]
 
The World Bank also pointed out that Israeli authorities penalize Palestinian importers but do not transfer fees to the PNA, noting that Israel has not transferred approximately USD 16 million (NIS60 million), resulting from an increase in the exit fee, to the PNA.[6]
 
Yet, the Palestinian economy continues to make strides. The 2012 Doing Business report ranks Palestine above several prominent countries in the region in the area of registering property, protecting investors, and enforcing contracts as well as dealing with construction permits and ease of paying taxes.
 
The World Bank report also noted the effect of Israel’s control over the Occupied Palestinian Territory; “The present situation… severely handicaps Palestinian economic activity in the Jordan Valley… thereby denying Palestinians a potential powerhouse of export-oriented high value-added agriculture”.[7] The World Bank then concluded that ‘Israeli restrictions remain the biggest constraint facing Palestinian private sector growth’[8]
and referred to Israeli restrictions as impeding sustainable economic growth.[9]
 
The Palestinian economy is indeed ailing from the continued Israeli occupation as well as the illegal actions undertaken by the Israeli government, which threaten to make the occupation permanent. In 2011, there was a 20 percent increase in new construction projects in illegal Israeli
settlements in the occupied West Bank while occupied East Jerusalem witnessed the highest number of new construction projects in a decade.[10]
 
Indeed, Robert Serry, UN Special Coordinator for the Middle East Peace Process (UNSCO), stated in the donor meeting of September 2011, “I am very worried about the disconnect between what the PA has achieved on the ground, and where the political process stands. The reality is that there is only so much that can be done in conditions of prolonged occupation, unresolved final status issues, no serious progress on a two State solution…. Further achievements in state-building require that the politics catch up with the impressive progress on the ground.’[11]
 
In its report to the March 2012 AHLC, UNSCO states, “Restrictions on Palestinian movement and access continue to compromise economic growth, undermine livelihoods, hinder access to basic services including education, health and water supply, and contribute to conditions whereby a continuation of external aid is required”.[12]

 


[1] Ministry of Information, Palestinian National Authority; http://www.minfo.ps/English/index.php?pagess=main&id=36&butt=5
[2] ‘The economic costs of the Israeli occupation’, http://www.mne.gov.ps/pdf/EconomiccostsofoccupationforPalestine.pdf
[3]Ibid., Economic Monitoring Report to the Ad Hoc Liaison Committee, March 201232
[4]TheIMF Staff Report to the AHLC, March 2012: “Recent Experience and Prospects of the Economy of the West Bank and Gaza”
[5] Ibid., 9-10
[6] Ibid., 11
[7]Ibid., 19
[8] Ibid., 19
[9] Ibid., 30
[10] ‘Torpedoing the Two State Solution: Summary of 2011 in the Settlements’, Peace Now, January 2012;http://peacenow.org.il/eng/2011Summary
[11] ‘Palestinian Institutions Prepared to Assume Responsibilities of Statehood, but Achievement at risk from Lack of Political Horizon, warns UN Report’, AHLC Press Release, 14/09/11;http://www.unsco.org/Documents/Statements/SC/2008/AHLC%20Press%20Release%2014%20September%202011.pdf
[12]The UNSCO report to the AHLC, March 2012:PALESTINIAN STATE-BUILDING: AN ACHIEVEMENT AT INCREASED RISK
 
Source: Negociations Affairs Departament (Palestine Liberation Organization).

The figures recently released by the Palestinian Bureau of Statistics indicate that almost all foreign trade of economy-intifadathe Palestinian Authority is still conducted with the Israeli market. Imports to the Palestinian Authority in the last year stood at approximately $4.8 billion, some 70% of which were from Israel. Likewise, exports from the Palestinian Authority, which amounted last year to about $800 million, were for the most part — about 80% of the Palestinian exports — directed to the Israeli market.

The Palestinian government has been making great efforts in recent years to diversify its trade markets and free itself of its almost total dependence on Israel. Thus, it has lately hosted delegations from China and Sri Lanka, which have come to discuss the strengthening of trade relations, and the Palestinian prime minister reports on the tightening of economic relations with Europe.

Who cares about the Palestinians?

Be that as it may, the Palestinian economy is still completely dependent on Israel: About half of the government’s budget comes from the taxes collected on its behalf by Israel. At the same time, Israel controls the Palestinian electricity and water supply systems, as well as the daily supply of basic food commodities. And what’s more, some 150,000 Palestinian breadwinners depend on their work in Israel. The emerging political picture is thus quite clear: they, the Palestinians, cannot hurt Israel, while Israel is in a position to harm them. Or is it really the case?

Although it seems that a new wave of violence is liable to flare up in the West Bank and Gaza, most commentators believe that a third intifada on the lines of the previous ones is rather unlikely. The riots and terrorist attacks of the past were intended not only to disrupt life in Israel, but, first and foremost, to draw the attention of both international and Arab public opinion. At present, however, the feeling in the Palestinian public, as well as the view of its leadership, is that, at least as far as their Arab brethren are concerned, no one cares about them or their welfare anymore. In fact, Arab television channels, which used to air each week dozens of news features and commentaries on the plight of the Palestinians, seem to have forgotten all about them, as habitual followers of the Arab media can testify. Nowadays, they are all preoccupied with the goings-on in Syria, Iraq, Egypt and South Sudan.

Real trouble for the Israeli economy

Once the diplomatic efforts fail (as may well be the case according to the prevailing opinion), the next Palestinian intifada in the offing is unlikely to be of a violent nature. Rather, it is expected to focus on disrupting Israel’s economic relations with foreign countries the world over. The area is ready and set for it. In a talk with Palestinian journalists, it has been noted by the latter that Europe is just waiting for the right signal from them and the Americans to take action and launch a wide, public boycott against Israeli products — and not only those manufactured in the settlements. Indeed, it’s Israeli products in general that are bound to be affected, as Justice Minister Tzipi Livni has already cautioned.

Israel will find it difficult to pressure and suppress the Palestinian economy in retribution for such a global economic campaign. It is quite in doubt whether yet another closure may be imposed or any more barriers erected on the West Bank. Similarly, putting a freeze on tax fund transfers to the Palestinian government or disrupting the power supply would be an improbable move on the part of Israel. Needless to say that Palestinian appeals to international economic or diplomatic bodies would by no means warrant military campaigns on the model of Operation Defensive Shield, conducted in the West Bank in 2002, or Operation Cast Lead in the Gaza Strip in December 2008. In other words, regardless of the weakness of the Palestinian Authority and its dependence on the Israeli economy, it has power enough to cause the Israeli economy real trouble.

* Danny Rubinstein is an Israeli journalist and autor.

Palestinian Central Bureau of Statistics (PCBS)

Ms. Ola Awad, President of the Palestinian Central Bureau of Statistics (PCBS), has reviewed the performance A Palestinian labourerof the Palestinian economy during the first three quarters of 2013, as well as the economic forecasts for the year 2014.

 The Palestinian Economy Performance during the First Three Quarters of 2013 

Gross Domestic Product (GDP):  The gross domestic product recorded 2.1% increase through the first three quarters of the year 2013 compared to the same period of the year 2012, as 0.8% in the West Bank and 6.0% in Gaza Strip, The growth through the first three quarters of the year 2013  concentrated in the main economic activities as the highest contributors for the gross domestic product included construction, industry, communication, services, public management and defense where the industrial sector recorded the highest growth rate through that time by 10.5% compared to the same period of the year 2012 .

GDP per capita: The GDP per capita has decreased 0.9% through the first three quarters of the year 2013 compared to the same period of the year 2012 while the GDP per capita has decreased by 1.9% in the West Bank and increased by 2.4% in Gaza Strip compared to the same period of the year 2012 .

Increase in the number of employed:1 The gross number of  the employed has increased through the first three quarters of the year 2013, by 3.5% compared to the same period of 2012, and that as a result of an increase in the number of employed in the sectors of ; construction ,services and industry in Palestine.

Employed in Israel and the settlements: The rate of the employed from Palestine in Israel and settlements through the first three quarters of the year 2013, increased as it reached 11.1% compared to about 9.6% in the year 2012, with an average of daily wage 172.9 new Israeli Shekel.

The unemployment  rate through the first three quarters of the year 2013: The unemployed rate in Palestine through the first three quarters of the year 2013was 22.7%, compared to 23.0% for the same period of 2012.  As it decreased in West Bank from 19.2% to 18.7% and decreased in the Gaza Strip from 30.6% to 30.5%.

1 The number of  the employed excluding workers in Israel and settlements  

An increase in the registered exports through the first three quarters of the year 2013. As for the movement of foreign trade in Palestine that represented in the gross of exports and imports, the first three quarters of the year 2013 have witnessed an increase of the export by 7.2% compared to the same period of the year 2012, compared to a decrease in imports by 3.3% compared to the same period of the year 2012.

Prices The consumer prices has increased by 1.6%  through the period of the beginning of the year 2013, to the end of September of the same year, compared to the same period of the year 2012.  The Construction Sector Constitute 4.51% of the Gross Domestic Product GDP: The value added for the construction sector increased by 3.9% through the first three quarters of the year 2013 compared to the same period of 2012 , the administration records show an increase in building license issued in Palestine by 14.0%, The gross number of employed in the construction sector has increased through the first three quarters of the year 2013, by 21.0% compared to the same period of 2012.

Palestinian economy is considered as a service economy: The services sector constitute the highest rate of the Gross Domestic Product, compared to other sectors, and this sector witnessed a growth in the product through the first three quarters of the year 2013, by 3.7% compared to the same period of 2012, accompanied with increase in employed number in the same sector by 2.3%.

Industrial Sector forms 12.9% of the Gross Domestic Product: The industrial sector witnessed a growth through the first three quarters of the year 2013, by10.5% compared to the same period of 2012, accompanied by an increase of the number of employed in the same sector by 3.1%.

The agricultural activity is 4.2% of the Gross Domestic Product: The agriculture sector production has decreased by 8.0% through the first three quarters of the year 2013 compared to the same period of the year 2012, accompanied by a decrease of the total number of workers in the same sector by 9.3%.

                                                                                        Economic Forecasting, 2014 

Those forecasts were built based on a set of scenarios in consultation with some local and international economists where each scenario was built depending on the internal political situations, the siege imposed on Gaza Strip, foreign aid, Israel’s measures in  Palestine and the number of Palestinian workers inside Israel in addition to a group of economic and social variables.  We would like to note that all indicators of economic forecasts are at constant prices (base year 2004), also the data don’t include that part of Jerusalem governorate which was forcefully annexed by Israel right after its occupation in 1967 (Jerusalem J1).

1. Base Scenario:2 
This scenario is based on the assumption that the economic and political situations in the Palestine will remain the same as it was through the year 2013. Assuming that donor countries will continue to provide the financial support for financing the central government budget, the same levels in 2013, and the continue flow of money generated of costume revenues from Israel. Palestine State is to continue to adopt a package of financial procedures that is capable of decreasing the deficit of public budget. Such an assumption can be achieved by the increase of the collection of income tax by 7.0% and value added by 8.0% compared to 2013. Moreover, assuming that the number of employed in the public sector will be constant, and the continued of the presence of obstacles placed by Israel on the movement of people and goods inside Palestine or between Palestine and the neighboring countries as it was through the 2013, in addition to the natural growth of population inside Palestine.

Outputs of Base Scenario: 
Real Sector:  It is expected that the Gross Domestic Product will increase by 3.8% through 2014 and GDP per capita will increase by 0.8%., the gross consumption will increase by 5.0% (private and public consumption), total investment by 3.0%.

Financially:  A decrease of the central government budget deficit by 11.0% is expected, as a result improvement in tax collection. It is expected also that the gross government revenues will increase by 10.0% with an increase of government expenses by 3.7%.

Work and Workers: A decrease in the unemployment rate in Palestine is expected, it is expected that the unemployed rate through the year 2014 will reach 22.0% after it was 23.0%. as well as, the number of employees in the Palestine will increase by 6.3%.

The External Sector:  An increase by 7.7% in the deficit of the net current account of Palestine is expected. The net current account composes of trade balance, net transfers and net factor  income. An increase by 6.9% in the trade deficit is expected. The Palestinian imports value will increase by 7.5%. It is also expected that  the net factor income will increase by 15.9%. The gross real national income will increase by 4.8%. Also it is expected that the gross national disposable income will increase by 4.3%.

 2.  The Optimistic Scenario: 
This scenario is based on the improvement of the economical and political conditions in Palestine, where assistances provided by donor countries are expected to increase by 20.0% and the continued of transfer of tax revenues (tax clearance) in regular basis. Reduce the restriction on the movement for people and goods inside the Palestine, or between the Palestine and neighboring countries, and the increase of the number of employed in Israel which allows Palestinian State to arrange procedures that will lead to expand its financial policy in one hand, and in a another, to improve its tax collection capacity (income tax and value added tax). Expansionary policy includes an increase in the size of governmental investments by 9.0%, the improvement of infrastructure and the increase of governmental transfers by 10.0% which in turn supports poor households in Palestine with the assumption that employment in the public sector will increase by 2.0%, as well to the natural population growth in Palestine.

The Outputs of the Optimistic Scenario: 
Real sector:  It is expected that the Gross Domestic Product will increase by 7.4% though the year 2014, and GDP per capita will increase by 4.2%. as well as the gross consumption will increase by 7.0% (private and public consumptions). With the assumption of an increase in the governmental investment, the credit facilities and in addition to the stable political and economic conditions seen in Palestine thus; creating appropriate investment environment for investors in the private sector, it is expected that the gross investment will increase by 6.4%.

Financially:   It is expected that the deficit in the central government budget will be decreased by 11.4%. Thus; an increase of gross governmental revenues by 11.8% is expected with an increase of 4.9% in governmental expenses.

Work and Workers: It is expected that the number of employed in the Palestine will increase by 9.8%, the unemployment rate in the Palestine is expected to drop down. And that as a consequent of an increase in the number of employed in Palestine resulting from freedom of movement from and to Palestine, in addition to the increase in the size of public and private investments, and an increase of the number of employed in Israel. It is expected that the unemployed rate through the year 2014 will reach 19.0% after it was 23.0%.

The external sector:  It is expected that the deficit in the foreign net current account of the Palestine will decrease by 21.0%. It is also expected that the net factor income will increase by 34.9% which was directly reflected on the net deficit of the external current account, and that as result of assuming the increase of employed numbers in Israel, in addition to the freedom of movement for individuals and goods from and to the Palestine. Therefore; the real gross national income will increase by 9.5%. The gross national disposable income is expected to increase by 11.8%.

3.    The Pessimistic Scenario:     This scenario is based on that the political situations will deteriorate accompanied by tax evasion will increase and collection of income and value added tax will decline by (10%, 9%) respectively. A decline of government transfers, fluctuation in tax revenues (tax clearance) transfers, by Israel freezing it for various periods through 2014 without paying the arrears due to the freeze. But overall, we assume a transfer of about 60.0% of tax receivables. In return, however; foreign aid will be stable. Increase of barriers on the movement of people and goods inside Palestine or between Palestine and neighboring countries.

The Outputs of the Pessimistic Scenario: 
Real sector:  It is expected that the Gross Domestic Product will decrease by 8.9% though the year 2014 and GDP per capita will decrease by 11.7%. As well as the gross consumption will decrease by 1.1%. In addition to decrease in gross investment by 1.6%.    Financially:  It is expected that government revenues will decrease by 13.3%, also it is expected that the government expenditure will decrease by 10.3%.

Work and Workers:  An increase in the rate of unemployment in the Palestine is expected , due to the clause and barriers imposed on people and goods movement  from and to Palestine, and the assumed decrease of private and public investments, and the decrease of workers in Israel , it is expected  that the unemployment rate will reach 25.0% through 2014 compared to 23.0% , and the number of employed is expected to slight decrease in Palestine  by 1.0%.

External Sector An increase in the deficit of the net foreign current account of Palestine is expected by 43.4%, an increase in the trade Balance deficit also is expected by 15.5%, the net factor income will decrease by 28.4%, due to the supposed decrease in the workers number in Israel, in addition to the increase of barriers imposed in Palestine, so the gross national income will decrease by 10.5%, and the gross national disposable income will decrease by 8.9%.

 

Palestinian prime minister Rami Hamdallah presented Tuesday a draft budget for 2014 of $4.2 billion (3.1 billion euros)bad economy palestine with a deficit of $1.3 billion, a statement read.

As in previous years, the budget anticipates considerable foreign aid, expected to reach $1.6 billion (1.2 billion euros), a slight rise from 2013.

The bulk of the budget was running expenditure, estimated to reach $3.9 billion (2.9 billion euros), with $2 billion (1.5 billion euros) to be spent on salaries and pensions, an increase of 4.9 percent compared to 2013.

The salaries are primarily financed by tax and tariff funds levied by Israel on goods destined for Palestinian markets that pass through Israeli ports it transfers to the Palestinian Authority at approximately $121 million (90 million euros) a month.

In a September report to donor states, the PA stressed that “without an end to the Israeli occupation… and its prohibitive restrictions… private sector-driven sustainable economic growth is unattainable.”

A World Bank report from October said the economy could grow by more than a third, if Israel lifted restrictions on about 60 percent of the West Bank it controls, assessing the current losses to the Palestinian economy at about $3.4 billion (2.5 billion euros).

Source:

This article was published in 2009.

Palestinians are as eager as anyone to see positive economic development for their tormented country. gaza stripBut they know full well that real economic progress awaits their release from Israeli military occupation (West Bank, East Jerusalem) and siege (Gaza Strip).

Consider the recent media promotion of the Netanyahu government’s view that the occupied West Bank is witnessing rapid economic growth. Thomas Friedman picked up on that theme in his New York Times column, as did Michael Oren, Israel’s ambassador to the United States, in this newspaper. The selective economic data they provide ignore the reality: Occupied Palestinianterritory is not a sovereign country where traditional economic measures apply.

I was the manager who oversaw the establishment of the first modern mall in the West Bank—the Plaza Shopping Center in El Bireh. I can attest that the success of a West Bank mall rests on a thin layer of elite consumer privilege poised precariously over a chasm of widespread disempowerment. Until West Bank Palestinians gain free and open access to the world economy, beyond the markets of the occupying power, major enterprises in Palestinian towns will suffer.

Objective analyses by the World Bank suggest that Israel’s repressive practices will not permit thePalestinian economy to develop meaningfully.

On water, a bank report from April 2009 notes that the “availability of water resources is highly disparate, with fresh water per capita in Israel approximately four times that of WBG [West Bank and Gaza].”

On mobility: “In the West Bank, restrictions on movement of people and access to natural resources has stifled economic growth.”

On security: “Recurrent destruction of trees, private homes and public infrastructure, as well as [Israeli] settlers’ encroachments on private land create a permanent state of insecurity.”

On trade: “[Palestinians] exporting through Israel is becoming more difficult and . . . the current alternative through Jordan is severely limited. For Palestinian exporters to effectively compete on the international market they must be allowed to use modern door-to-door logistical systems.”

David Craig, World Bank country director for the West Bank and Gaza, gave a realistic assessment in summing up a December bank report: “The Palestinian economy has the potential for dramatic growth, even in the midst of the current global recession. This can only be achieved by the private sector through export oriented growth. The new [Israeli] restrictions described in this report undermine this goal.”

Israel’s stranglehold over Palestinian economic resources is ongoing. Israel occupies or controlsPalestinian land, airspace and electromagnetic spectrum used for telecommunications. By refusing to permit an already-licensed second Palestinian cellular operator to launch, Israel is putting hundreds of new jobs on hold and blocking the first step to liberalizing the Palestiniantelecommunications market. I was personally involved in establishing the first Palestiniantelecommunications operator in 1996 and can attest to the ongoing hinderance of Israeli practices.

Peace talk is cheap; actions by Israel that would make real peace—even economic peace—a reality are still the exception rather than the rule. I do not disparage any progress that has been made but, viewed in context, it is no more than window dressing.

Meanwhile, the continued brutal subjugation of Gaza and coerced Judaization of Arab East Jerusalem call into serious question Israel’s true intentions. Absent a political framework to securePalestinian freedom and independence, “economic peace” initiatives only facilitate the crime of occupation.

* Mr. Bahour is a Palestinian-American businessman from Youngstown, Ohio, who lives in the West Bank.

 

In its 1998 report the Foundation for Middle East Peace pointed out that 2,300 sq km of the West Bank andgaza strip Gaza were cultivated by Palestinians in 1967. Since then, the figure has dropped to 1945 sq km, or 31.5% of the territories. The confiscation of arable land has led to a fall in Palestinian agricultural incomes and employment. (Agriculture employed 43% of the Palestinian active population in 1966, compared with only 22% in 1993.) In addition, the report condemns the confiscation of water and pollution by the settlements. The Foundation also publishes a bimonthly report on Israeli settlement in the occupied territories.

The impact of Israeli settlement and settlers on Palestinian land and water resources is one element in a broad relationship of inequality and dependency established and promoted by the occupation during the last quarter century. While there have been anecdotal enquiries into specific examples of this phenomena—for example, Palestinian construction labor at an Israeli settlement or the effects on an adjacent Palestinian community of sewage produced by a settlement—there have been no studies that focus on the overall economic effects of settlements themselves, singly or collectively, on Palestinians. Nevertheless, some data is available that offers a broad insight into the nature and scale of the impact of settlements on Palestinian land and water resources.

Israel’s occupation of the West Bank and Gaza is essentially a contest for control of the region’s resources, principally land and water. To the extent that these assets are used by one antagonist, occupation has been structured so that the other loses.

Settlements have long represented an Israeli intention to remain permanently on the land and to control its destiny, necessarily at the expense of Palestinians. Without settlements, as Israelis have long acknowledged, they would be merely an « occupying » army. The implantation of civilian Israeli colonies is, therefore, the primary obstacle to Palestinian self-determination.

All Israeli settlements in the West Bank are currently located in Area C, which is under exclusive Israeli control and which comprises 72 percent of the West Bank. Israel similarly controls approximately 15 percent of the Gaza Strip. In the Golan Heights, the Syrian population of 17,000 is clustered into five small villages abutting the Syrian-Lebanese border. The 32 Israeli settlements control 80 percent of the plateau. One-quarter of the entire Golan—315,000 dunams—is grazing land controlled by‚ ‚settlers.

Assessing the precise effect of the loss and reallocation of Palestinian lands to Israeli settlements is difficult. The World Bank, in a draft of its September 1993 study, « Developing the Occupied Territories—An Investment in Peace, » notes:

Confiscation of Palestinian land has enabled Israel to proceed with the construction of settlements and related structures in various areas of the West Bank that were traditionally considered to be wilderness zones. Most important among these are the eastern slopes and the central part of the West Bank which once housed a variety of wildlife and provided a winter grazing ground for livestock and recreation for the local population. . . .

Similarly, building agricultural settlements in the Jordan Valley has gradually deprived the Palestinian inhabitants of these areas of their richest soils and water wells. A similar situation has developed in the Gaza Strip where settlements have encroached upon fertile inland and coastal areas. The Israeli settlement program was not accompanied by adequate and proper environmental considerations. None of the settlements have developed sewage treatment plants. Sewage is often allowed to run into valleys even if a neighboring[Palestinian] village is threatened. The sewage system of the settlements on the eastern hills and slopes north of Jerusalem has contaminated fresh water supplies for drinking and irrigation of Palestinian areas up to Jericho.

Agricultural Land

In 1967, 2,300 sq km of the West Bank and Gaza Strip were under Palestinian cultivation. In 1989, that figureBayt’ Affa ,District of Gaza had been reduced to 1,945 sq km, or 31.5 percent of the West Bank and Gaza Strip. Agriculture comprised 24 percent of Gross Domestic Product in 1966, the same percentage as in the 1980-85 (pre-intifada) period. By 1994, the percentage had decreased to less than 15 percent. In 1966, the agricultural sector provided employment for 55,000 Palestinians, or 43 percent of total employment, whereas in the 1980-85 period, there were 40,000 people employed in the agricultural sector, comprising 24 percent of employed Palestinians. In 1993, the percentage of employed persons working in agriculture was 22 percent.

These gross indicators do not lead to specific conclusions regarding the effect of settlements on agricultural employment or production or land under cultivation, because settlements are only one of a number of variables that must be considered when assessing these trends.

However, there are specific regions, such as the Jordan Valley, where a direct link can be established between the loss of Palestinians’ agricultural opportunities and Israeli settlements.The confiscation of agricultural lands and their transfer to settlements result in the loss of agricultural income and employment, although this has never been quantified beyond anecdotal reporting. Contamination by sewage also directly affects Palestinian agriculture in the region around Kiryat Arba and elsewhere. There are also unquantified economic and environmental costs associated with Israeli-owned industries in the occupied territories, such as a recycling plant for used motor oil, stone quarries, and other plants where harmful and toxic by-products are produced.

Water

Access to water, rather than a scarcity of land, remains the greatest obstacle to Palestinian agricultural development. For Israel, water has been a vital precondition for achieving its fundamental challenges—the creation of a vibrant economy to sustain an increasing Jewish community. Without an adequate supply of water, the concept of massive Jewish immigration and settlement would be imperiled, and without immigration and settlement Israel’s leadership fears for its future. Water, settlement, and security have thus become complementary pieces of Israel’s security outlook.

Accordingwater to a 1992 report for the American Academy of Arts and Sciences by Miriam Lowi, « almost the entire increase in Israeli water use since 1967 derives from the waters of the West Bank and the Upper Jordan River. »

Israel, however, is in the midst of a water emergency. Even with the resources conquered in 1967, it is pumping more water from its aquifers than nature can replace. And in the West Bank, not only is Israel exploiting water for its own population in Israel and the occupied territories, amounting to 15 percent of total consumption, it has also prevented the Palestinian community from increasing its water use to barely 20 percent beyond the amount used in 1967—and only for personal use, not for agriculture and economic development.

Since the beginning of bilateral and multilateral negotiations earlier this decade at Madrid, Israel has sought to protect its continuing control over this resource in the West Bank, which was described by Israel’s state comptroller in February 1993 as the « principle reservoir of drinking water for the Dan region, Tel Aviv, Jerusalem, and Beersheba, » and the « most important long-term source in the [national] water system. »

The water requirements of Israel’s settlements are a small segment of this larger mosaic of Israeli exploitation of the water resources in the occupied territories.

At a time when settlers were barely 10 percent of the population in the West Bank (1987), Palestinian consumption totaled 115 million cubic meters (mcm), while settler consumption equaled 97 mcm. A 1993 report by Peace Now noted that « the Jewish settlers’ per capita irrigated areas are seven and thirteen times larger than the areas accorded to Palestinians for irrigation in the Gaza Strip and West Bank respectively. »

A November 1992 report by the Jerusalem Media and Communication Center (JMCC), « Israeli Obstacles to Economic Development in the Occupied Palestinian Territories, » notes that lack of water has forced Palestinian farmers to remove tracts from cultivation and that the digging of new, deep wells for settlements, particularly in the Jordan Valley, has caused subsequent shortages for Palestinian farmers.

Industrial Pollution

Approximately 160 Israeli-owned industrial concerns are located in the West Bank. For Israeli industrialists, the West Bank has, at least in one sphere, enjoyed a comparative advantage over Israel. Environmental regulations on soil, air, and water quality, and restrictions on industrial development generally, have been far less comprehensive and much less assiduously enforced compared with Israel. Combined with state-subsidized incentives for Israeli businesses to locate to industrial parks in and near settlements, the relative laxity of environmental enforcement and monitoring has led to the location of a number of « dirty » concerns to the occupied territories. Factories posing an environmental risk generally use wet processes in packaged food manufacturing, metal coating, and textiles.

The Shomronagriculture Municipal Environmental Association (SMEA), a governmental body established by settlements in the northern part of the West Bank to monitor and improve environmental quality, acknowledges that « waste water effluents from these plants and from nearly 100 residential communities in our region, if not properly treated, pose a threat to the groundwater quality in the region. In addition, industrial air emissions and noise generation can be problematic at some factories. »

Forty-five businesses operate in the industrial park of Burkan, adjacent to the settlement of Ariel. Most are engaged in the production of fabrics and plastics for export. Palestinians complain that industrial waste generated in the industrial park is dumped on Palestinian land.

« The owners of these factories escape the tighter rules on health and the environment inside Israeli itself, to work on the West Bank, where they get tax breaks, » explained Khalil Suleiman, an environmental expert from al-Najah University in Nablus. In addition to Burkan, Palestinians have complained about the operation of industrial facilities at Ariel, Karnei Shomron, Kiryat Arba, and Kadumim. Of particular concern is the effect of industrial development on the quality of groundwater, which Palestinian investigators have found to be « significantly more polluted » near settlements than elsewhere.

The settlement of Kiryat Arba has been identified by Palestinian investigators as « the main source of pollution in the Hebron area. » A tile factory located in the settlement industrial area at one time flushed its waste water through the sewage system, which resulted in numerous problems. The city of Hebron successfully petitioned the court to stop this practice. Now the waste water is trucked off in tanks and dumped on a Palestinian field. The water contains high levels of calcium carbonate, increasing the already high pH level of the land.

The Case of Geshurei Industries

Geshurei Industries, a manufacturer of pesticides and fertilizers, was originally located in the Israeli town of Kfar Saba. Concern about the environmental effects of the factory—on land, public health, and agriculture—resulted in an Israeli court order in 1982 closing the plant.

Since 1987, the factory has been operating across the Green Line, in the West Bank town of Tulkarem, where there are effectively no controls on waste disposal or air pollution. Other Israeli industrial polluters, including those working in asbestos, fiberglass, pesticides, and flammable gases, also relocated to the Tulkarem area. According to a recent report by a Palestinian non-governmental organization, the Palestinian Society for the Protection of Human Rights and the Environment (LAWE), factory pollution directly affects 144 dunams of prime agricultural land and « causes substantial damage to the public health. » The Israeli court has ordered some remedial action, including compensation to affected farmers, but the plant remains in operation.

The Society’s report notes the following effects of the Geshurei factory operation : the decay of a majority of trees and other vegetation around the plant; the settling of chemical dust and residue and a liquid substance that leaves a calcium-like deposi on the land and vegetation, causing a decrease in field and hothouse agricultural production; the prominence of sodium and salt factory by-products in soil samples of land found to be non-arable, both of which are prominent consequences of waste-water contamination of agricultural land; the discovery of sulfamic acid, a starting material for a herbicide used as a non-selective weed killer, in groundwater samples from the area surrounding the factory.

The report also notes that « this is clear evidence of polluting groundwater through leakage of chemicals, and proof of the improper disposal of wastes and by-products. »

LAWE documented « a very high ratio of health-related problems among farmers and people living around the factory, including severe headaches, itchy eyes, spastic and chronic coughs, and bronchial asthma. » The Palestinian Ministry of Agriculture has recently noted that « the public health of the community has not been well-documented due to decades of military occupation and direct conflict, suggesting that environmentally related health problems may be more pervasive than currently estimated. The long-term impact on soil and groundwater has similarly received inadequate attention. »

Tulkarem’s agricultural land has historically been a significant factor in the local economy. As a consequence of the harmful effects of Israeli-operated industry around Tulkarem, agricultural profits were reduced by 21.5 percent between 1992 and 1997, according to LAWE. The Palestinian Ministry of Agriculture estimates that 17 percent of Tulkarem’s agricultural land has been affected by pollution originating at the six Israeli concerns located in the Tulkarem area. Three of the factories sit on what Palestinians claim to be waqf land. Other sites are claimed by private Palestinian owners. Several factories are located less than 100 meters from residential housing.

Settlers have been implicated by Palestinians in what Palestinians term « pesticide attacks, » in which settlers destroy cultivated fields by spraying chemical pesticides during the agricultural season. LAWE notes that in one incident in the village of Ptarmus Ayya, settlers sprayed crops of vegetables, cereals, and olive trees in this fashion.

Dumps

Hundreds of sites for the disposal of trash are located in the occupied territories, including dozens that are unauthorized. There are 246 sites in the West Bank north of Jerusalem alone. Most of the sites are simple and primitive with few if any environmental safeguards, and none is used exclusively by settlements or Palestinian communities. SMEA acknowledges that « sites are improperly maintained, generating odors and smoke which are a nuisance to neighboring residents, as well as posing a threat to groundwater quality. »

A site in Jiyous, near the northern West Bank town of Kalkilya, is typical. Sited on 12 dunams, 200 meters from the river bed that serves as a source of drinking water for the village of Azoun, the site opened in 1990 and is administered by Palestinians under the direction of SMEA. It is used principally by the settlements of Karnei Shomron, Kadumim, Tzofim, and Ma’ale Shomron. SMEA is now being pressured by Israeli trash contractors to permit them to use the dump for trash generated in Israel, after the Israeli dump they had been using was closed by the government. Residents of Azoun complain of an epidemic of flies in summer and of smoke wafting into the village when trash is burned. They claim that 200 olive trees have been damaged by smoke.

Sites such as the one at Jiyous are attractive trash disposal options for Israeli communities. With disposal costs three to six times greater in Israel, sites in the West Bank offer many Israeli towns a closer, cheaper alternative to dumps within Israel proper.

Israel conducted a Geographic Information System (GIS) study in 1996 as part of an effort to develop a master plan to establish priorities to improve and to consolidate the system of trash disposal in the West Bank. Israel’s plan for trash disposal in the West Bank is being devised with no official or informal Palestinian participation.

Quarries

There are literally thousands of stone quarries on the West Bank, supplying 80 percent of the material needs of Israel’s construction sector. Many of these stones are used in settlement construction. Israeli concerns operate six West Bank quarries. Most of these quarries have operated for years, but the Palestinian Authority (PA) has also considered the siting of new quarries in Palestinian-controlled areas, run in partnership with Israeli companies.

One of these, at a controversial site in Wadi al-Teen—an important natural grazing area that supports livestock farmers in neighboring Palestinian villages—was to be the new site of a quarry whose operators are relocating from sites in Israel.

The Applied Research Institute—Jerusalem, a Palestinian environmental group, notes in their report, « Wadi al-Teen Quarry and the Systematic Expropriation of Palestinian National Resources, » that « the construction of a quarry at Wadi al-Teen will undoubtedly bring environmental degradation, threaten the bio-diversity and wildlife in the area, close off major natural grazing and agricultural areas, and deprive Palestinian farmers of run-off water used for irrigation. Furthermore, the plan will adversely affect the living environment in neighboring Palestinian villages due to dust and other types of air pollution. Most important, this project allows Israel to exploit Palestinian stone, the main natural raw material in the West Bank. »

The public outcry over plans to establish a quarry at Wadi al-Teen has recently forced the PA to reconsider the project.

« What is the PA planning to tell those who demonstrated against settlement activity in Wadi al-Teen, » asked Palestinian Legislative Council member Hassan Kreisheh before reconsideration was announced.

« How can we tell Israel to stop building settlements when we are granting them even more land to establish quarries? »

Many quarries are located in close proximity to Palestinian residential areas. The clouds of dust produced in the quarries pose certain health risks. Palestinians charge that those residing near such enterprises suffer from increased levels of asthma and acute bronchial infections.

Settlers have organized to prevent the operation of quarries near their residential areas. Together with Palestinians, they have filed a unique, joint appeal to oppose the creation of a new stone-crushing site in the village of Dura, near Hebron.

Obstacles to Settler-Palestinian Cooperation

The mitigation of environmental problems in the occupied territories, including those caused by the existence and expansion of settlements, is viewed by some Israelis as a forum for joint Israeli-Palestinian action. Yet Israeli environmental planners in the territories continue to view Palestinians as junior partners at best. Palestinians, for their part, are willing to cooperate with Israeli communities within Israel’s pre-1967 borders, but they refuse as a matter of principle to participate in joint efforts with settlers. « Our feeling—in fact, it’s more than a feeling, » explained the director of the settlers’ Judea Towns Association for the Environment, « is that the Palestinian Authority is not interested in cooperating with us. » In Hebron, to cite one example, the Palestinian municipality refuses to participate in a waste water treatment scheme in which some of the treated water will be used by Israeli settlers.

Rafael Eitan, Israel’s minister of environment, recently warned that « if the Palestinian Authority doesn’t answer our request for cooperation we will carry out the projects essential to protect the environment in Israel and the residents of the territories ourselves, and I will act to deduct the costs from the money forwarded by the government to the Authority. »

Palestinians recognize that, even without taking the settlements into consideration, the West Bank and Gaza Strip have myriad environmental problems. « Environmentally speaking, » explained Imad Attrash, director of the Children for the Protection of Nature in Palestine, « I am very depressed. We have problems with pollution, sewage, industrial zones situated in residential areas, as well as disposable diapers. »

The prevailing sentiment among Palestinians is to treat the environmental implications of settlement expansion as a political issue, one related to the continuing Palestinian refusal, particularly on a popular level, to concede the principle of joint action with settler and settler-oriented institutions.

Source: http://mondediplo.com/focus/mideast/question-3-2-2

The Gross Domestic Product (GDP) in Palestine expanded 0.30 percent in the fourth quarter of 2013 over the same quarter of the previous year. GDP Annual Growth Rate in Palestine averaged 4.41 Percent from 2001 until 2013, reaching an all time high of 26.03 Percent in the third quarter of 2003 and a record low of -21.59 Percent in the fourth quarter of 2006. GDP Annual Growth Rate in Palestine is reported by the Palestinian Central Bureau of Statistics.

 

palestine-gdp-growth-annual

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ActualPreviousHighestLowestDatesUnitFrequency
7.10 0.30 26.03 -21.59 2001 - 2014 Percent Quarterly

 

The Palestinian territories (West Bank and Gaza) have been occupied by Israel since the Six-Day war in 1967. As such, Palestinian economy is dependent on Israel as it controls the movement of goods and labour and retains customs revenues. As a result, production capacity and access to natural resources has been significantly reduced and services are by far the most important sector of the economy (nearly 83 percent of GDP). Palestine remains heavily dependent on foreign aid to support the government’s budget and fund infrastructure development. Nonetheless, in recent months, Palestinian National Authority’s efforts to ease tensions with Israel have resulted in growth returning to Palestine. Yet, the growth cannot be sustainable without addressing security problems and high unemployment rate among young people. This page provides – Palestine GDP Annual Growth Rate – actual values, historical data, forecast, chart, statistics, economic calendar and news.
 
 
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CalendarGMTCountryEventReferenceActual

PreviousConsensusForecast
2013-06-30 01:00 PM Palestine GDP Growth Rate YoY Q1 2013 2.7% 5.3%   6.92%
2013-09-30 01:00 PM Palestine GDP Growth Rate YoY Q2 2013 1.2% 2.7%   -1.17%
2013-12-22 12:30 PM Palestine GDP Growth Rate YoY Q3 2013 2.6% 1.2%   1.63%

 

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GDPLastPreviousHighestLowestUnit 
GDP 6.80 6.42 6.80 3.04 USD Billion  
GDP Annual Growth Rate 7.10 0.30 26.03 -21.59 Percent  
GDP per capita 1653.00 1609.90 1653.00 879.52 USD  
GDP per capita PPP 2465.10 2324.36 3041.80 2105.52 USD  

 

Source: http://www.tradingeconomics.com/palestine/gdp-growth-annual

Posted on:15/10/2010

By Ahmed Zaki Osman

The Israeli occupation of the West bank and siege of Gaza are seriously harming Palestinian olive oil production which contributes up to US$100 million annually for some of the most underprivileged Palestinian families, the international NGO Oxfam said in a report on Friday.palestine_oliveoil

The report, entitled, “The Road to Olive Farming: Challenges to developing the economy of olive oil in the West Bank,” blames Israel for restricting access to land and olive tree farms.

“Around 40 percent of the West Bank is effectively off-limits to Palestinians, with access highly restricted, due to settlements, outposts, bypass roads, military bases, closed military areas and areas Israel has declared as being nature reserves,” the report said.

For centuries Palestinian olives have been a major commercial crop and are credited with being some of the best in the world.

Olives and olive oil are one of the main sources of income for the Palestinian economy. They represent around half of agricultural land use in the West Bank and the Gaza Strip as well as being a major export, and provide employment and a large source of income for around 100,000 farming families.

According to the report there are approximately 10 million olive trees with the potential to produce up to 34,000 metric tons of olive oil in a good year, but only 5,000 tons in a bad year. The average quantity of oil produced annually between 2001 and 2009 was around 17,000 tons.

Harmful impacts of Israeli policy also include settler violence sanctioned by the government, incidents in which illegal Israeli settlers have uprooted or burned tens of thousands of olive trees during their attacks against Palestinian farmers.

According to the United Nations, in the first six months of 2010 thousands of olive trees and other crops have been damaged by settlers.

Oxfam accused Israel of intentionally restricting access for Palestinian farmers to local and international markets, especially since the beginning of the second intifadha.

“Physical barriers such as checkpoints and road blocks have restricted the free movement of people and goods within the West Bank and obstructed access for Palestinian agricultural produce, including olives and olive oil, to internal, Israeli and international markets,” the report concluded.

As for Gaza, the picture is even gloomier since inhabitants cannot even get olives from the West Bank olives since the blockade started.

The report quoted Anwar Atallah, of the Unipal General Trading Company as saying “Before 2006 we used to bring in 20 tons of containers every month, then we were allowed only 5 tons a month…..so the situation has really hit every household. Five kg of olives used to cost US$2.50 but now the price is US$2 for 330kg.”

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