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UN Report slams Israel for fragmenting Palestine

 InDepth News 20 September 2019

A new United Nations report has cautiously criticized Israel for undermining the prospects of a two-State resolution of the conflict by "breeding not only economic disparities but also social and political polarization" in Palestine. (1263 Words) - By Bernhard Schell


"Fragmentation and lack of contiguity within the West Bank -- including East Jerusalem -- and between the West Bank and Gaza Strip not only undermine the efficiency and competitiveness of the Palestinian private sector, they also undermine the authority of the PA (Palestine Authority) and its ability to establish the rule of law, and weaken its ability to efficiently provide public services and goods at normal costs," says the 'Report on UNCTAD assistance to the Palestinian people: Developments in the economy of the occupied Palestinian territory'.

The report lauds the PA for having demonstrated competence at running the public sector and delivering public services within areas under its control in spite of unprecedented challenges. "However, in the realm of State-building, there are limits to what technocratic competence can achieve without a political settlement that results in Palestinian sovereignty and removing the multiple structural constraints on Palestinian development," adds the report.

The West Bank witnessed minor easing of Israeli movement restrictions with the reduction of the number of closure obstacles form 630 to 550 in 2009, according to the UN. Otherwise, most of the security measures set in place since 2000 remain almost unchanged. These include a system of restrictions on the mobility of Palestinian labour and goods within and between the West Bank, Gaza and the rest of the world. Land confiscation continued unabated, with 40 per cent of Palestinian land in the West Bank lost to settlements and related infrastructure.

UNCTAD, the United Nations Conference on Trade and Development, points out that the construction of the 709 km Separation Barrier has deprived the Palestinians of more of their land and natural resources. Around 85 per cent of the Barrier's projected path cuts deep into the West Bank to impose new borders away from the internationally recognized Green Line.

It has compounded the problem of agricultural decline by limiting the access of farmers who live in the "seam zone", the area east of the Barrier and west of the 1967 Green Line. Farmers trapped in that zone need to have difficult-to-obtain permits to pass through gates to access their fields. Repeated failure to obtain permits has discouraged many Palestinian workers from even applying for these permits.

Difficulties in accessing agricultural land not only changes the output mix and compromise productivity and quality of produce, it also poses a serious risk that in the long run many Palestinian farmers will be forced to abandon their land west of the Barrier, as the Food and Agriculture Organization of the UN found out.

According to the World Bank, the construction of the Barrier implies a permanent loss of 8 per cent of Palestinian agriculture product.


Furthermore, any potential benefit from trade in the West Bank is undermined by prohibitive transaction costs at major commercial crossing points in the form of damaged goods and long waiting time.

As a result of repeated and lengthy Israeli security checks, Palestinian traders are faced with long queues with inadequate facilities and limited working hours at the crossing points. The number of outbound and inbound trucks is erratic, dictated by Israel's security concerns.

Furthermore, the number of outbound trucks is at least 50 per cent less than that of inbound trucks, reflecting tighter Israeli measures on Palestinian exports.

The UNCTAD report goes on to say that the Gaza Strip has continued to suffer from an Israeli blockade since June 2007. As a result, 40 per cent of the population of occupied Palestine territory (oPt) is isolated from the rest of the world.

During the first four months of 2010, imports were much less than the minimum required to have a tangible impact on reducing poverty. The number of inbound trucks of imports did not exceed 720 trucks per week, only 23 per cent of the pre-blockade level.

The Israeli authorities restrict imports into Gaza to limited amounts of only 76 items compared to 4,000 items before the blockade, as the UN's World Food Programme reported. Most of the items are staple foods which, together with hygiene items, comprised 60-70 per cent of imports.

Entry of commercial petrol and diesel was banned, while imports of industrial fuel were barely sufficient for 33-46 per cent of the requirements of Gaza's only power plant, causing power cuts of 8-12 hours per day. Imports of cooking gas met only 66 per cent of the weekly needs, the UN Office of Humanitarian Affairs reported.

Gaza's economy is undermined not only by the tight restrictions on imports of goods, but also the restrictions on the transfers of dollars and Jordanian dinars. Cash shortages impede the execution of transactions in these currencies, aggravate the risk banks face and undermine their efficiency and profitability, says UNCTAD quoting the International Monetary Fund (IMF).

"The blockade on Gaza has led to a serious decline in the banking sector and diverted economic and financial activities to the unregulated informal sector, thus posing serious difficulties to the PA efforts to build institutional capacity, improve economic governance, and establish the rule of law," says the UNCTAD report.

The UN agency notes that despite the devastation of the 2008-2009 Israeli military operation in Gaza, real reconstruction has not yet started. Around 75 per cent of the damaged infrastructures, public and private buildings, private businesses, and agricultural land and premises remain in dire need of rehabilitation.

The Strip requires 55,000 truckloads of raw materials for reconstruction, but the Israeli authorities allowed only about 30 trucks per week in the first four months of 2010. Consequently, as the UN Development Programme reported this year, reconstruction effort involves only basic repair, using recycled rubble and construction materials brought through the tunnels between Egypt and Gaza.


The Palestinian trade deficit deteriorated from 57 per cent of GDP in 2008 to 59 per cent in 2009. A salient feature of Palestinian trade is the dependence on Israel as a source of import and an outlet for exports. More than three quarters of Palestinian trade is with Israel.

While the trade deficit with Israel improved, retracting from 82 per cent of the overall deficit in 2008 to 65 per cent in 2009, it was still high and larger than the $2.4 billion of donors' support transferred to the oPt in 2009.

This dependence results from complex, mutually reinforcing economic, political and logistical factors arising from prolonged occupation. "The lack of a seaport and airports, and the constraints on trade with and through neighbouring Egypt and Jordan despite the competitive cost have practically concentrated Palestinian trade with and through Israel.

"Part, but not all, of the trade between the oPt and Israel could be mutually beneficial but its involuntary and unequal nature has rendered Palestinian economic development subservient to Israeli economic and political imperatives, often masked under "security requirements," the UNCTAD report says bluntly.

Trade dependency on Israel remains substantial, it adds, despite strong potentials for trade with other countries and bilateral trade arrangements with the European Union (EU), Jordan, Turkey, Arab States, Canada and the United States.

Furthermore, the easing of movement restrictions in the West Bank does little to solve the fundamental reality of stifled Palestinian trade, especially in the context of the blockade on Gaza, the construction of the Separation Barrier and other ad hoc movement restrictions that could be introduced unexpectedly, UNCTAD says.

Originally published by InDepth News. ©


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