Imagining a Palestinian Economy
At the last meeting of the Ad Hoc Liaison Committee for Aid to Palestine, the Israeli delegation argued that the Palestinian economy was not ready to sustain an independent state. But this argument is frustrating. It is Israel’s very denial of independence that most impedes Palestinian economic prosperity. As a board member of the Palestinian Business Women’s Forum, I was appalled by this conclusion.
Imagine, for example, that you are the manager of a Ramallah-based Palestinian food manufacturer. The Palestinian farmers who should be your suppliers are unable to grow certain vegetables because Israel refuses to allow them sufficient access to water resources and because they are prohibited from importing the appropriate fertilizers. This forces your company to purchase much of its product from Israeli farms. Many of those farms are owned by the very Israeli settlers who have displaced Palestinian farmers, who have access to all the water they need (and at a lower price), and who can import any equipment and supplies without restriction.
Now imagine trying to get your company’s goods to market in the neighboring city of Bethlehem. Only a decade ago, your product could make the trip in only thirty minutes. Since then, Israel has forbidden all Palestinian traffic from using the direct route through Jerusalem, and your trucks have now been relegated to a series of back roads that are inadequate for industrial use. A portion of this new route is called Wadi Al Nar, the Valley of Fire, and the road through it is narrow and perilously traverses the side of a mountain. This is the only road that Palestinians can use to get from the south of the West Bank to the north. All of that traffic leaves film of oil on the pavement, which further endangers the lives of your drivers during the rainy season. The added cost in time, diesel fuel, and insurance is crippling. Building a more suitable road is not an option, because the Israeli military will not grant the necessary construction permits.
Like all modern companies, yours relies on digital communications to operate competitively. Unfortunately, the services you receive from your Palestinian telecommunications company are also subject to limitations imposed by the Israeli occupation. Your Internet connection is unreliable because Israel limits the total bandwidth, wired and cellular, available to Palestinian firms, including the infrastructure to provide 3G mobile data services. Mobile phone reception is spotty along a number of your delivery routes, because Israel refuses to allow the construction of Palestinian-owned cellular towers in the majority of the West Bank that it controls.
This is the reality. Recently, the Palestinian Ministry of National Economy and the Applied Research Institute—Jerusalem (ARIJ) conducted the first attempt to quantify the cost of the Israeli occupation on the Palestinian economy. They found that without the impediments imposed by Israel, the Palestinian economy would be twice as large as it is today. Rather than being at the mercy of donor countries, the Palestinian Authority’s budget would run a healthy surplus. International organizations, including the World Bank and the International Monetary Fund, agree that the occupation is the main impediment to the prospect of a sustainable Palestinian economy.
Palestine possesses promising human resources: compared to other countries in the region, our population is remarkably well educated. The Palestine Right to Education campaign reports a 98.2% literacy rate for Palestinians between the ages of 15 and 24 and 91.1% for overall adult literacy. Yet most of these Palestinians cannot even obtain a visa to visit their family, let alone establish businesses.
And, what incentive does Israel have to end the occupation, if it profits from it? Currently, Israel has unrestricted access to our natural resources—Israeli companies make millions off minerals mined from our land; other Israeli firms take water from aquifers in the West Bank and sell it back to us at a higher price; settler agricultural businesses in the Jordan Valley, the bread basket of Palestine, export millions of dollars worth of products each year. These are just a few examples.
There are steps the international community can take to invigorate the Palestinian economy. It can pressure Israel to end its occupation. Nations should ban Israel’s settlement products from their markets and prohibit their companies from doing business with, or investing in, settler companies. Finally, donor countries can link aid and future business with Israel to the cessation of its human rights violations against Palestinians and towards engagement in a credible negotiating process.
Palestine is ready. If only Israel would get out of the way.