Settlements Are Strangling Palestinian Economy


“October 8, 2013 – More than half the land in the West Bank, much of it agricultural and resource rich, is inaccessible to Palestinians. The first comprehensive study of the potential impact of this ‘restricted land,’ released by the World Bank today, sets the current loss to the Palestinian economy at about US$3.4 billion.

Area C constitutes 61 percent of the West Bank and is the only contiguous land connecting 227 smaller separate and heavily residential areas. The 1993 Oslo Peace Accords stipulated that Area C be gradually transferred to the Palestinian Authority (PA) by 1998. This transfer has never taken place.

“The densely populated urban areas of the West Bank usually command the most attention,” said Mariam Sherman, outgoing Country Director for the West Bank and Gaza. “But unleashing the potential from that ‘restricted land,’ –access to which is currently constrained by layers of restrictions – and allowing Palestinians to put these resources to work, would provide whole new areas of economic activity and set the economy on the path to sustainable growth.”

With growth of approximately six percent annually needed to absorb new entrants to the labor market, let alone making a dent in the soaring rate of youth unemployment, urgent attention is needed to find ways to grow the economy and create jobs. A vital economy is essential for citizen well-being, social stability and building confidence to underpin the challenging political negotiations. However, the Palestinian economy, which currently relies on donor financed consumption and suffers from ongoing stagnation of the private sector, is unsustainable. The report estimates that if businesses and farms were permitted to develop in Area C, this would add as much as 35 percent to the Palestinian GDP.

Freeing economic activity in Area C would have a particularly high impact on the development of businesses in agriculture and Dead Sea minerals exploitation, stone mining and quarrying, construction, tourism, and telecommunications. Other sectors would be able to benefit from improvements in the quality and cost of infrastructure and increased demand for goods and services.

The volume of increased economic activity would greatly improve the PA’s fiscal position. It is estimated that government revenues would increase by US$800 million, which would cut the fiscal deficit by half, hence reduce the need for donor support, and reduce unemployment and poverty rates.

“Access to Area C will go a long way to solving Palestinian economic problems,” said Sherman. “The alternative is bleak. Without the ability to utilize the potential of Area C, the economic space will remain fragmented and stunted. Lifting multiple restrictions could transform the economy and substantially improve prospects for sustained growth.”



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5 responses to “Settlements Are Strangling Palestinian Economy

  1. Christopher Proudlove

    Christians for Zion founder Mike Fryer’s blog today tells how he has been lied to over the years by the British Government about grant aid to Palestinian Arabs being diverted to fund terrorism, lavish lifestyles of PA officials, and race hate against Israel. He states that this week the European Court has published a report showing that €1.95 billion Euros given by the European Union to the Palestinian Authority between 2008 and 2012 has been wasted or lost.
    Ordinary citizens in Judea and Samaria (West Bank) are being deprived of a better standard of living because Western aid has not gone where it is intended.
    At a recent conference I attended we were told that Arab villages refused the offer of free refuse collections by the Jews because they could suffer from the jihadists as a result of “collaborating with the enemy.”
    I know of one MP who has contacted the Foreign Office asking why our country has paid for a PA sewage plant twice over and it has still not been built.
    I also know of the case of a Palestinian Arab woman who complained to the media that she had not received any compensation from Israel when her house was demolished. A journalist investigating her complaint found that she had turned down a compensation offer because her life would be in jeopardy for “collaborating with the enemy.”
    The UK Foreign Office is also prevaricating after complaints that British taxpayers’ money goes to paying wages of single men without dependent relatives who are in Israeli jails for terrorism offences.
    The main reason why Palestinian Arabs are poorer than they should be is that their fat cat politicians, with millions of pounds in their bank accounts thanks to money stolen from Western aid, refuse to come to the negotiating table with Israel and come to a settlement on a two-state solution.
    I think the Arabs would be better off in a one-state Israel. They should call off their intimidation tactics, love their neighbours instead of hating them, and put an end to their indoctrination programmes to poison minds against Israel.

  2. Christopher Proudlove

    Israel is to improve facilities at the Allenby Bridge border crossing with Jordan, a major terminal for Palestinian civilians and goods. A new X-ray system will speed up the crossing process and will result in an estimated 30% increase in Palestinian exports. The crossing opening hours will be extended by two hours daily from Sunday to Thursday.
    A series of new initiatives to boost the Palestinian economy include an increase in the number of work permits granted to West Bank Palestinians to its highest level since 2000, plus an improvement in the water supply to Palestinians, a new fuel pipeline to the West Bank and greater cooperation between Israel and the Palestinian Authority (PA) on tax matters.

  3. “Christians for Zion founder Mike Fryer’s blog today…”

    Yes i noticed the racism.

    Now if visitors to this website can, imagine what the uproar would be if an Arab said the following quote about Netanyahu or another Jewish government minister.

    “I was tempted when I wrote to my MP and MEP on Tuesday morning to ask what have the Wolves have done with our money. However it is an insult to Wolves who share their kill and even vomit up their fill to feed their young for the good of their community. The leaders who stole this aid do not deserve to be called Wolves.”

    Here, Mike Fryer calls the Palestinian leadership worse than animals [Wolves] and here we start to see through the mask of the Zionist and what they really think of Palestinian Arabs.

  4. Christopher Proudlove

    The New Testament is replete with warnings about “wolves.” Are you saying the Bible is racist, Trevor Barclay.

  5. Christopher Proudlove

    JOURNALIST Caroline Glick writing about Israel’s European challenge, refers to buildings illegally built by Palestinian Arabs. She states:

    Last month, the European Union pushed European- Israeli relations to a new low.
    In mid-September, the IDF enforced a High Court of Justice order to destroy 250 structures built illegally by Palestinian squatters in the Jordan Valley.
    The High Court acted in accordance with the agreements signed between the Palestinians and Israel. Those agreements gave Israel sole control over planning and zoning in the Jordan Valley and throughout the area of Judea and Samaria defined as Area C.
    Five days after the IDF destroyed the illegal structures, Palestinian activists arrived at the site with tents. Their intention was to act in contempt of the law and of the agreements the PLO signed with Israel, and to resettle the site.
    The Palestinians did not come alone. They were accompanied by European diplomats. The diplomats were there to provide diplomatic cover to the Palestinians as they broke the law and breached the agreements the PLO signed with the Israeli government.
    This would have been bad enough, but in the event, one European diplomat, Marion Castaing, the cultural attaché at the French Consulate in Jerusalem, decided that her job didn’t end with providing diplomatic cover for lawbreakers. She joined them. She punched an Israeli border policeman in the face.
    Rather than apologize to Israel for using European diplomats to support Palestinians engaged in criminal activity, and for Castaing’s shocking violence against an Israeli soldier lawfully performing his duties, EU foreign policy chief Catherine Ashton attacked Israel.
    Ashton called the tents, presumably paid for by European taxpayers, “humanitarian assistance,” and declared, “The EU deplores the confiscation of humanitarian assistance carried out by Israeli security forces yesterday in Khirbat al-Makhul.
    “EU representatives have already contacted the Israeli authorities to demand an explanation and expressed their concern at the incident. The EU underlines the importance of unimpeded delivery of humanitarian assistance and the applicability of international humanitarian law in the occupied Palestinian territory,” Ashton said.
    The EU’s role in financing illegal Palestinian building efforts in the Jordan Valley is not unique. For some time, in contempt of Israeli law and the agreements signed between Israel and the PLO, the EU has been financing illegal building by Arabs in Judea, Samaria and Jerusalem.
    What was new in last month’s incident was the deployment of European diplomats at the scene to provide diplomatic cover for Palestinian law-breakers, and of course their willingness to physically assault Israeli security forces.
    In recent months, there has been a palpable escalation of European hostility toward Israel. The significance of this escalation must be properly understood, for only by understanding precisely what is new in the EU’s treatment of Israel, will it be possible to develop proper responses to what is happening.
    The incident in the Jordan Valley followed the EU’s announcement in July that beginning in January 2014, it will impose guidelines barring cooperation between the EU and EU member nations and Israeli entities located or operating beyond the 1949 armistice lines. Those guidelines constitute a low-grade trade war against Israel. They advance the goal of forcing Israel out of joint undertakings with Europeans and denying us access to European markets.
    The Europeans are so eager to begin their economic war against Israel that they have launched it even before the guidelines have come into force. Firms in the Netherlands and Germany involved in waste treatment projects in Jerusalem, Judea and Samaria, whose completion would benefit Palestinians and Israelis alike, have received warnings from their home governments to cease their operations lest they face legal consequences.
    In addition to barring European-Israeli economic activities that may even indirectly benefit Jews beyond the 1949 armistice lines, Ashton has promised to soon introduce EU-wide rules requiring member nations to place special labels on Israeli goods produced by Jews beyond the 1949 armistice lines.
    By placing special labels on goods produced by Israeli Jews in specific areas of Israel, the EU is shaping European public opinion to view all Israeli products produced by Jews as morally inferior, and therefore less desirable than all other products they come into contact with. Foes of Israel hope this opinion-shaping will lead to the initiation of European consumer boycotts of Israeli products.
    Most Israeli responses to Europe’s ever-escalating hostility have focused on European hypocrisy. We have repeatedly decried the unique standard to which the Europeans hold Israel and Israel alone.
    European hypocrisy is infuriating. But it is nothing new.
    It was decades ago that Europe created a separate standard that it applies only to Israel.
    Consider the European’s position on Jerusalem. Since Israel was established, the Europeans have denied the Jewish state the right they accord to every other state on earth: the right to determine its capital city.
    Or consider Europe’s position on Israeli communities built beyond the 1949 armistice lines. Europe wrongly asserts that these communities are illegal. But even if they were right, Europe’s behavior toward Israel would still make a mockery of its proclaimed devotion to international law. Europe has no problem, indeed it has actively supported settlements for citizens of a belligerent occupying powers in areas ruled through occupation. As Profs. Avi Bell and Eugene Kontorovich from the Kohelet Policy Forum explained in a recent paper on the EU’s guidelines, the EU supports settlements by occupying powers in Northern Cyprus, Abkazia and Western Sahara. In light of this, it is clear that the guidelines directed against Israel are inherently discriminatory.
    The EU’s supposed commitment to international law is similarly exposed as a sham by its willingness to turn a blind eye to the Palestinian Authority’s diversion of EU aid monies to finance terrorism. Despite mountains of evidence accumulated over the past 13 years that aid is being siphoned off to finance terrorist attacks against Israel, the EU has refused to take action. And its refusal to act is itself a breach of international law.
    Then there is the EU claim that its actions are undertaken to advance the cause of peace between Israel and the Palestinians.
    This claim is also not credible. By encouraging the Palestinians to breach their signed agreements with Israel, and by engaging in economic warfare against Israel for refusing to capitulate to all Palestinian demands preemptively, the Europeans are escalating Palestinian intransigence.
    Throughout the years, Europe’s policy has been inconsistent.
    At the same time some European leaders have led the diplomatic war against Israel, other leaders were cultivating close ties with the Jewish state. Over the years, Europe signed a series of economic association and free trade agreements with Israel. Europe has willingly cooperated with Israel in areas where it believed it had something to gain from that cooperation.
    For instance, European nations, and the EU, have cooperated with Israel in the areas of science, technology, economics, intelligence gathering and military affairs. Until recent years, there was a distinct separation between the European leaders who sought to discriminate against Israel and those who sought cooperation with it.
    But recently the distinction between “good Europe” and “bad Europe” has eroded. What we are seeing today, and what distinguishes the discriminatory behavior Israel faces from Europe today from what it has faced from Europe for decades, is the increased control that anti-Israel forces are exerting over all areas of European-Israel relations.
    Consider European Commission Vice President Antonio Tajani’s visit to Israel this week. Tajani came to promote business relations and expand cooperation in science and other fields with Israel. While here he signed an agreement with Science, Technology and Space Minister Yaakov Perry that will enable Israelis to participate in the EU’s Galileo satellite project.
    But according to media reports, the only thing Israelis wanted to discuss with him were the new European guidelines and the fact that they make it impossible for Israel to participate in the Horizon 2020 scientific research program. Israel has participated in the program since the mid-1990s. But for Israel to participate in the upcoming round of the Horizon program, it will have to discriminate against Israelis based or operating beyond the 1949 armistice lines. And so Israel will be unable to participate.
    Until now, Europeans like Tajani, who have been interested in fostering cooperation with Israel where such cooperation benefits Europe, have had no trouble doing so. But now, due to the economic regulations against Israel, his hands, and those of like-minded Europeans, are tied by leaders like Ashton whose opposition to Israel has reached obsessive heights.
    There are lessons that Europeans who do not support the downward trajectory of EU-Israel ties and Israelis need to draw from the current state of those relations. First, Europeans interested in maintaining and fostering good relations with Israel need to be willing to confront their fellow Europeans.
    Until now they never questioned the goodwill of those who claimed that it is illegal for Jerusalem to be Israel’s capital, or for Jews to live wherever they have property rights in the Land of Israel.
    But the hypocrisy and discrimination inherent in these claims needs to be pointed out. European supporters of close European-Israeli relations need to show the duplicitousness of proclamations of devotion to the peace process and international law by officials like Ashton. If they wish to stop the precipitous decline in Europe’s relations with Israel, they can no longer pretend that these claims are open to interpretation.
    As for Israel, we need to recognize first and foremost that we do not control what happens in Europe. In adopting anti- Israel policies, European leaders are not responding to actions Israel undertakes. When 40 percent of Europeans tell pollsters they believe that Israel is enacting a genocide against the Palestinians, it is clear that European views of Israel are not based on facts of any kind, and certainly not on anything Israel does.
    Moreover, we need to recognize that like our European friends, we have given the benefit of the doubt to our continental adversaries, believing their empty claims of commitment to the peace process and international law. As a consequence, since the outset of the peace process with the PLO 20 years ago, most of the steps we have taken to demonstrate our good faith have strengthened those Europeans who wish us ill at the expense of those who wish us well.
    Like our European friends, we need to stop giving a pass to those who distort the very meaning of international law while making empty proclamations of support for the cause of peace. Only be exposing the truth behind the lies will we strengthen our European friends and so increase the possibility that our relations with Europe may improve one day.

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