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Israel still strangles the Palestinian economy

Sam Bahour | The Wall Street Journal

20 August 2009

Palestinians are as eager as anyone to see positive economic development for their tormented country. But they know full well that real economic progress awaits their release from Israeli military occupation (West Bank, East Jerusalem) and siege (Gaza Strip).

Consider the recent media promotion of the Netanyahu government’s view that the occupied West Bank is witnessing rapid economic growth. Thomas Friedman picked up on that theme in his New York Times column, as did Michael Oren, Israel’s ambassador to the United States, in this newspaper. The selective economic data they provide ignore the reality: Occupied Palestinian territory is not a sovereign country where traditional economic measures apply.

I was the manager who oversaw the establishment of the first modern mall in the West Bank—the Plaza Shopping Center in El Bireh. I can attest that the success of a West Bank mall rests on a thin layer of elite consumer privilege poised precariously over a chasm of widespread disempowerment. Until West Bank Palestinians gain free and open access to the world economy, beyond the markets of the occupying power, major enterprises in Palestinian towns will suffer.

Objective analyses by the World Bank suggest that Israel’s repressive practices will not permit the Palestinian economy to develop meaningfully.

On water, a bank report from April 2009 notes that the “availability of water resources is highly disparate, with fresh water per capita in Israel approximately four times that of WBG [West Bank and Gaza].”

On mobility: “In the West Bank, restrictions on movement of people and access to natural resources has stifled economic growth.”

On security: “Recurrent destruction of trees, private homes and public infrastructure, as well as [Israeli] settlers’ encroachments on private land create a permanent state of insecurity.”

On trade: “[Palestinians] exporting through Israel is becoming more difficult and . . . the current alternative through Jordan is severely limited. For Palestinian exporters to effectively compete on the international market they must be allowed to use modern door-to-door logistical systems.”

David Craig, World Bank country director for the West Bank and Gaza, gave a realistic assessment in summing up a December bank report: “The Palestinian economy has the potential for dramatic growth, even in the midst of the current global recession. This can only be achieved by the private sector through export oriented growth. The new [Israeli] restrictions described in this report undermine this goal.”

Israel’s stranglehold over Palestinian economic resources is ongoing. Israel occupies or controls Palestinian land, airspace and electromagnetic spectrum used for telecommunications. By refusing to permit an already-licensed second Palestinian cellular operator to launch, Israel is putting hundreds of new jobs on hold and blocking the first step to liberalizing the Palestinian telecommunications market. I was personally involved in establishing the first Palestinian telecommunications operator in 1996 and can attest to the ongoing hinderance of Israeli practices.

Peace talk is cheap; actions by Israel that would make real peace—even economic peace—a reality are still the exception rather than the rule. I do not disparage any progress that has been made but, viewed in context, it is no more than window dressing.

Meanwhile, the continued brutal subjugation of Gaza and coerced Judaization of Arab East Jerusalem call into serious question Israel’s true intentions. Absent a political framework to secure Palestinian freedom and independence, “economic peace” initiatives only facilitate the crime of occupation.

Mr. Bahour is a Palestinian-American businessman from Youngstown, Ohio, who lives in the West Bank.