The Economy
by EA Cassie – 18 min read
“From the military control of imports and exports, to the restrictions on land access and work travel, to the destruction of olive groves, water springs and many other means to livelihood – the Israeli occupation has suffocated the Palestinian economy and led to widespread unemployment. This leaves many Palestinians forced to work in Israel or on Israeli settlements, building away their own futures, with little to no employment rights.” (EA, Sara)
In its report in October 2019, the UN Conference on Trade and Development repeatedly states that Israeli occupation of Palestine hinders economic development for the Palestinian people and territory. Israeli control of the movement of goods and people, as well as control of natural resources, make economic growth extremely difficult for Palestinians.
A Palestinian farmer awaits authorisation from the Israeli military to access his farmland
Palestinians living in the West Bank are limited when it comes to economic potential:
(Source UNCTAD 2019, Catalyst 2019, PCBS 2019)
Unemployment rate in…
Palestine: 25%
United Kingdom: 4%
Over one third of Palestinians employed in the private sector are earning less than minimum wage
Palestine: > 35%
United Kingdom: 7%
Women’s participation in the paid workforce
Palestine: 21%
United Kingdom: 72%
“Israel uses us as a company. They herd us into our open air prison. They make us buy their products. We are cheap labour. We build their settlements; they take our quarries and our water; even the cows in Israel have more water than us”
Abdullah, South Hebron Hills
Over 25 years after the Oslo Accords were signed – intended to be a temporary measure to last 5 years – Israel retains control of the economic borders, which leaves Palestinians with limited access to affordable goods and services.
As part of the Oslo Accords, the Paris Protocol (1994) established an economic customs union between Israel and occupied Palestine, as well as a shared external border. The agreement gave Israel sole control over the external borders and collection of import taxes and VAT, and international trade would be conducted through Israeli air and sea ports, or through land border crossings controlled by Israel.
For example, in the agriculture sector, Palestinian farmers are not able to import certain fertilisers, which would be more effective. According to the World Bank, this has resulted in ‘lower land productivity in the Palestinian territories, in comparison to Israel, amounting to, on average … only 43 percent of the yield in Israel, per dunum (1000 square meters), despite nearly identical natural environments.’ Palestinian farmers also reported difficulty obtaining licences for pesticides and water treatment solutions, which means that they ‘cannot meet European export standards or grow produce that is competitive in regional markets’.
The ongoing occupation, with an economic framework that was intended to be temporary, results in Palestinians today suffering from the restriction of movement of goods and severe limitations on their ability to reach international markets.
‘The Palestinian economy has been losing this capacity as the manufacturing sector has stagnated. In relative terms, the share of manufacturing in GDP has dropped from 19 percent in 1994 to around 10 percent currently. This is mainly attributed to the multi-layered system of Israeli restrictions.’
(World Bank Economic Monitoring Report, 2019)
Despite the West Bank being rich in resources, many Palestinians have to buy back tankered water from Israel, even when the pipes run through their own land
‘The Palestinian people are denied the right to exploit oil and natural gas resources and thereby deprived of billions of dollars in revenue.’ (UNCTAD). Additionally, Israel controls all water resources in the West Bank and sells it back to Palestinians through its half nationalised, half private water company Mekorot. The lack of control of water significantly impacts the lives and the livelihoods of Palestinians – especially those whose primary income source is agriculture and/or livestock.
Palestinians who are not working in agriculture or raising livestock often seek employment in Israel or in Israeli settlements located in the West Bank and East Jerusalem. These settlements are illegal under international law, but in some cases provide wages 60% higher than in the domestic labour market (UNCTAD).
