Munich Personal RePEc Archive

The economic dimensions of prolonged occupation: continuity and change in Israeli policy towards the Palestinian economy

Khalidi, Raja J. and Taghdisi-Rad, Sahar (2009): The economic dimensions of prolonged occupation: continuity and change in Israeli policy towards the Palestinian economy. Published in: UNCTAD No. UNCTAD/GDS/2009/2 (August 2009)

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Abstract

- There is no Israeli economic policy towards the Palestinian people or the occupied territory; rather there is a policy to maintain occupation and administration of the Palestinian territory by whatever means available, including economic strategies;

- Israeli strategies deployed since 1967 have included economic inducements to improve the quality of life, devolution, and other schemes focused on promoting individual welfare but not preventing communal poverty;

- The Oslo Accords and the Paris Protocol on Economic Relations (PER) of 1994 formalized the de facto customs union in operation under occupation and locked in the adverse path of dependence of the Palestinian economy upon Israel;

- Palestinian Authority institutions have been unable to establish sovereign or even autonomous institutions capable of expanding the space for economic policymaking and for economic polices promoting long-term development;

- The effects of Israel’s dual strategy of skewed economic integration coupled with physical separation has led, over forty years, to divergence in per capita incomes between Israel and the territory, rather than the convergence promised by economic theory and the premises of the customs union;

- Instead of continuing to repeatedly reform the facades of interim self-government, all efforts should aim to form the sovereign institutions for statehood;

- New Israeli overtures under the heading of “economic peace” risk not only diverting attention from political processes, but also hark back to an era of Israeli domination of the Palestinian economy, which demonstrably failed;

- Though the PER may have outlived its design and usefulness, it can only be superseded if a fundamentally different framework is envisaged, rooted in ensuring Palestinian sovereignty, statehood and economic viability;

- A Palestinian economic strategy for sovereignty and peace would entail seeking recognition of the Palestinian economy as a separate customs territory, and would become the reference point for formulation of economic policy, institution-building, decision-making, and international economic relations;

- Such a status would offer a platform for building a viable, vibrant and secure national economy for the envisioned State of Palestine, governed by a framework which adheres, among other principles, to the multilateral rules and disciplines embodied in the World Trade Organization;

- Only through a Palestinian economic policy framework that is predicated on the separate, internationally recognized status of the economy of the occupied territory, which in turn helps to create the conditions to end occupation, can a viable Palestinian economy and a sovereign State emerge to deliver the promise of peace.

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