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The wall and closures that drive short term security insures long term insecurity

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Israel's Separation Wall and its thicket of internal closures (aka heavy restrictions on the movement of labor and goods in the West Bank and Gaza) conspire to create a failed Palestinian economy of such threat that it will subvert the hopes of partition to provide terrorist security and prevent birthrate dilution.

I find it specious that the Israeli Foreign Ministry can claim the Palestinian violence and PA corruption was responsible for the downturn in the Palestinian economy. The Palestinian economy has been persistently vulnerable to external shocks, particularly closure; the graph of Real Income Per Capita and Annual Closure Days have been inversely proportional at least since 1994, at least six years prior to the intifada:

From 1998 to September 2000, closure was again infrequent, remittances from Palestinian workers in Israel fuelled demand for domestic products, transaction costs fell and private investment increased. The economy also benefited from an economic boom in Israel, which enhanced opportunities for exports of Palestinian labor and goods.

Without this access to Israeli markets, the Palestinians were doomed as even prior to the intifada:

Labor supply is rapidly increasing, and the two most important sources of jobs absorption hitherto - employment in Israel and in the Palestinian Authority - are essentially saturated.

Commencing with the September 28, 2000, closures, "the most severe, sustained mobility restrictions imposed on the West Bank and Gaza since 1967," the West Bank and Gaza suffered a "precipitous decline in trade, employment, and investment." One has only to look at the checkpoint maps (pages 8 & 9) of the West Bank and Gaza to begin to grasp the impact on Palestinians. Barely a year after closures, unemployment had tripled, real incomes had fallen by a third - and were below the late 1980s, and the proportion of the poor (those consuming <US$2 per diem) had doubled.

Palestinians attempted to cope by the PA continuing the delivery of basic services, ghost workers again finding some work in Israel, households reducing expenditures and drawing down savings, informal self-help and sharing systems, and foreign donors largess without which "all semblance of a modern economy would have disappeared."

It has not been enough. A slight recovery in 2003 after two years of sharp decline was wiped out by stagnation in 2004. Unemployment has risen to 27 % (and nearly 40 % among the young people who comprise the majority of suicide bombers and militants), while the poverty rate has risen to 48 %. 1.7 million Palestinians now live below the poverty line (US$2.10 per diem day) while 600,000 of those live below the "subsistence" level ($1.50 per diem).

I've previously noted that, "I believe that the Security Wall is a failure of imagination, and will not bring Israel long term security as it will insure the economic collapse of what I call "Paltustan," the Palestinian Bantustan on its doorstep." In addition to the maps cited in that note, the PALESTINE Monitor map page is instructive in identifying the continuing gerrymandering of territory between Jew and Arab. Leaving aside issues of fairness in so doing, I believe that it creates an unstable economic statelette that will ultimately overwhelm the temporary security of the Israeli Separation Fence, called by the Arabs either a Segregation Wall or an Apartheid Wall:

"Closures [remain the] key factor behind today's economic crisis in the West Bank. They have fragmented Palestinian economic space, raised the cost of doing business and eliminated the predictability needed to conduct business."

While Israel has reduced curfew levels in Palestinian areas, checkpoint operations continue unabated such that Palestinian "Gastarbeiter" (guest worker) menial labor in Israel, e.g., construction, agricultural and restaurants, that were once the "lifeblood of the Palestinian economy" have been erased -- less than 1,000 from 30,000 pre-September 2000.

Israel's Disengagement Plan has yet to offer any significant impact on the Palestinian economy, since it proposes only a limited easing of closure. "Without major changes in this closure regime, [the] Palestinian economy will not revive, poverty and alienation will deepen." The PA needs two kinds of borders eased to prevent it from becoming an economic septic tank: opening external borders so that Palestinians gain better access to world markets, and a "radical easing" of internal closures.

Four Years - Intifada, Closures and Palestinian Economic Crisis
An Assessment
World Bank, October 2004

Disengagement, the Palestinian Economy and the Settlements
World Bank, June 23, 2004

POVERTY IN THE WEST BANK AND GAZA AFTER THREE YEARS OF ECONOMIC CRISIS
World Bank and the Palestinian Central Bureau of Statistics (PCBS)
2003

Fifteen Months - Intifada, Closures and Palestinian Economic Crisis
An Assessment
World Bank
March 18, 2002

Gordon Housworth



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