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Israel Strangling  Palestinian Economy
World Economy

Israel Strangling Palestinian Economy

The European Union this week issued its long-awaited guidelines to label settlement products produced in the illegal settlements Israel has built in the territory it occupied forcefully in 1967, Middle East Online reported.
Israel claimed labeling would hurt Palestinian workers in Israeli settlements. This claim deliberately creates confusion and diverts international attention from the colossal damage Israel’s occupation and colonization of Palestine does to the Palestinian economy.
Israel has exploited the Palestinian economy—directly and through its illegal settlement enterprise—since its occupation began. It has confiscated Palestinian land and property for settlement construction and agriculture; seized water resources (the more than 600,000 settlers now use six times as much water as the 2.6 million West Bank Palestinians); taken over tourist sites; and exploited Palestinian quarries, mines, the Dead Sea, and other non-renewable natural resources.
Isolated Bantustans
In addition, the settlements are supported by an infrastructure of roads, checkpoints, and the Separation Wall, leading to the creation of isolated Bantustans. According to a World Bank study, 68% of the so-called Area C—which represents 60% of the West Bank and which is richly endowed with natural resources -- has been reserved for Israeli settlements, while less than 1% has been allowed for Palestinian use.
This physical fragmentation, coupled with Israeli restrictions on movement and access, has led to the emergence of different economies in the occupied territory, greatly harming the prospects for economic development. Overall, it is estimated that the total cost of the occupation was almost 85% of the total estimated Palestinian GDP (around $7 billion) in 2010 alone.
The illegal settlement enterprise has thus severely strangled the Palestinian economy. It is no surprise that the economy now suffers from structural weaknesses and a debilitated productive base that is unable to generate enough employment and investment. It is also no surprise that the Palestinians have become dependent on foreign aid, including from taxpayers in the EU and its member countries.
Dangerous Working Conditions
It is this harsh economic reality that drives some Palestinians—estimated at 3.5% of the total West Bank labor force in 2013—to work in Israeli settlements, where they are subject to difficult, sometimes dangerous working conditions. Most do not have health insurance to protect them from work-related accidents and it is estimated that 93% do not have labor unions to represent them: They are subject to arbitrary dismissal and withholding of their permits if they demand their rights or try to unionize.
It is sometimes argued that Palestinian workers in settlements receive higher wages than in the Palestinian labor market; however, it is worth noting that they are paid on average less than half the Israeli minimum wage. For example, in Beqa’ot, an Israeli settlement in the Jordan Valley, Palestinians are paid 35% of the legal minimum wage. (The packing-houses of Mehadrin, the largest Israeli exporter of fruits and vegetables to the EU, are located in this settlement.)
More than 80% of Palestinian workers would leave their jobs in the settlements if they could find an alternative in the Palestinian labor market.
While Israel spins that EU labeling will hurt a few thousand Palestinian workers, in reality millions of Palestinians have been dispossessed of their economic resources. And Israel’s occupation hurts Palestinians far more than EU labeling of settlement products could.
What Palestinians need is an end to occupation, not more jobs in illegal settlements. Only then can they strengthen their economy’s productive base, generate employment, ensure self-reliance and self-sufficiency—and stop being dependent on EU aid.

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