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Israel’s Occupation of Palestine: A Recipe for Economic Disaster
TEL AVIV/JERUSALEM - The Israeli occupation of Palestinian territories has been crippling the local economy, leaving thousands of people without access to basic services and perpetuating a cycle of poverty.
Strangling Trade
According to a new report, Israel’s restrictions on Palestinian trade have led to a deep dependence on the Israeli market. In 2021, 72% of Palestinian trade flowed from Israel, while the share of the Palestinian market in total Israeli trade was just 3%. This imbalance has devastating consequences for Palestinians.
Additional Costs and Disadvantages
The report highlighted the additional costs imposed on Palestinian producers by the occupation, which place them at a significant disadvantage compared to their Israeli competitors. In 2021, the bilateral Palestinian trade deficit with Israel exceeded 23% of GDP.
Restrictions on Movement and Access
The restrictions on movement and access to markets have devastating consequences for Palestinians, particularly women. Women face additional safety concerns during commutes and at checkpoints, leading many to work from home or remain unemployed.
- 20 cents earned by Palestinian women for every dollar earned by men (2021)
- Significant part of this gender-related employment and income gap directly attributed to the occupation
Structural Distortion
The Palestinian economy has undergone a deep structural distortion due to long-term de-agriculturalization, de-Industrialization, and de-development.
- Share of agriculture in GDP declined from 12.1% (1994) to 6.5% (2021)
- Share of services grew from 60% (1994) to 77% (2021)
Obstacles to Agricultural Development
Obstacles to agricultural development include:
- Expropriation of land and water
- Restrictions on importing inputs and fertilizers
- Destruction of agricultural facilities and crops
- Separation Barrier has trapped 10% of West Bank agricultural land in a no-man’s land between the barrier and the Green Line
Gaza’s “Buffer Zone”
In Gaza, the occupying power has established a “buffer zone” extending 300-1,500 meters from the fence separating Gaza from Israel, covering roughly 17% of the total area of Gaza. This has rendered over 35% of agricultural land inaccessible to Palestinian producers.
Settlement Expansion
The report also highlighted the continued expansion of Israeli settlements in the occupied territories, with more than 138 recognized settlements and 150 unrecognized outposts by November 2021. These settlements are illegal under international law and have led to:
- Demolition of Palestinian assets
- Displacement of thousands of people
Conclusion
The UN has repeatedly condemned the Israeli occupation and settlement expansion as violations of international law. The report concludes that the only way to break this cycle of poverty and economic stagnation is for Israel to end its occupation and allow Palestinians to develop their economy freely.
Source: United Nations Conference on Trade and Development (UNCTAD)