Analysis |

The International Committee for Subsidizing the Israeli Occupation

Lacking the willingness to put political pressure on Israel, the Ad-Hoc Liaison Committee will be discussing the scenario of further economical deterioration of the Palestinian economy

Amira Hass
Amira Hass
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Palestinian employees of UNRWA protest against the cuts in Gaza, September 2018.
Palestinian employees of UNRWA protest against the cuts in Gaza, September 2018.Credit: Ibraheem Abu Mustafa/Reuters
Amira Hass
Amira Hass

Within the borders of a first-world country, with a few characteristics of a global military superpower, exist large pockets of the third world that are deteriorating to even lower levels of economic inactivity, collapsing or nonexistent infrastructure, unemployment, wasted human potential, poverty, hunger and despair.

This description could be appropriate for many countries around the world where unimaginable socioeconomic inequality exists within a distance of only a few blocks – whether it’s Mexico City, New York, Cape Town or New Delhi. But in this case it’s Israel and the Palestinian enclaves scattered between the Mediterranean Sea and the Jordan River.

To be more precise, it’s where people who are not Israeli citizens live, who are not included in the calculations of Israel’s Central Bureau of Statistics, compared with pockets of underdevelopment where Israeli citizens live: Jews and Palestinians alike.

Three reports that describe the situation of the Palestinian enclaves were released this week: one by the World Bank, which was mentioned in Israeli newspapers, one by the International Monetary Fund, and the third from the UN Special Coordinator for the Middle East Peace Process, UNSCO.

No newspaper summaries of the reports can reflect the large amount of work invested in the documents or the concern and caring of the authors and their many assistants, which can clearly be seen between the lines.

The reports are many dozens of pages long, illustrated with colorful graphs, packed with statistics, divided into sections that make them easier to read and accompanied by executive summaries.

They’re checkered with economic and banking terms that we common people don’t understand, and with surprising facts such as the relatively high rate of young women (23 percent) among tech startup entrepreneurs in the Gaza Strip and the West Bank, and the higher percentage of boys who drop out of high school compared with girls.

The reports contain clear political warnings; first of all, that without the lifting of Israeli restrictions on the West Bank’s Area C, which is under full Israeli control, and on freedom of movement from Gaza, no real improvement is possible.

And they contain forecasts; one concerns the dwindling savings in Gaza and the fear that people won’t be able to pay their debts to banks (half of the debt is owed by public-sector employees). The forecast is that this development will affect the operations and stability of Palestinian banks in the West Bank.

Or, the implementation of Israeli law on deducting hundreds of millions of dollars from the customs duties Israel transfers to the Palestinians because of the allowances for prisoners would make the situation deteriorate even further.

Protests against UNRWA budget cuts, in Gaza, September 2018.Credit: Ibraheem Abu Mustafa/ Reuters

Each report is warning of a man-made disaster, and analyzing the events and actions of the parties since the previous reports were released – in March – which also warned of a socioeconomic disaster with political roots. All the reports propose short- and medium-term solutions that everyone knows.

A tale written long ago

On Thursday in New York, the reports will be laid on the desks of the Israeli and Palestinian representatives and the mediators between them: Norway's representative as the chairperson, along with representatives of the European Union and the United States and senior officials from the United Nations, World Bank and International Monetary Fund.

For an entire day the participants will discuss a foretold scenario of perpetuating and widening the gaps between the two worlds, a scenario written long ago whose actors, the expected and the unexpected, continue to play their roles with dedication.

The entangled, complex and often petty conflict between the two Palestinian governments is present in the reports – even though Hamas is never mentioned by name.

The logical solution the reports propose: Unifying authority and returning responsibility for what goes on in Gaza to the Palestinian Authority government in Ramallah. This is supposed to be simple, quick and more attainable than lifting Israel’s restrictions on movement.

The panel meeting Thursday is the Ad Hoc Liaison Committee, the AHLC, another of the acronyms created a quarter-century ago as part of the Oslo Accords negotiations.

Officially, this is the main coordination mechanism, on the policy-making level, that discusses the development aid provided to the occupied Palestinian territory.

In reality, it’s the fixed framework that has met twice a year for 25 years and approves the continuation of the system: Israel restricts the Palestinian enclaves and dictates a path of economic stagnation in the simplest case and usually economic deterioration, while the mediators discuss the foreign financial support and the PA’s technical-fiscal means that will mitigate the severe socioeconomic implications of the deliberate political limitations on the economy.

In short, the AHLC discusses subsidizing the Israeli occupation — releasing Israel from its obligations towards the occupied people — and covers for it.

Trump at the UN General Assembly, September 25, 2018.Credit: CARLO ALLEGRI/רויטרס


A quarter-century ago, the American-Jewish economist Sara Roy invented the term “de-development” to describe how and to where Gaza’s economy had deteriorated. She began her research during the first intifada; in other words, it dealt primarily with the policy during the direct Israeli occupation, long before the establishment of the PA. At that time, Roy lived in Gaza for a year, along with her partner, who is a physician and Jewish as well.

Roy’s Judaism and her background – as the daughter of Holocaust survivors – is very relevant, she says. This explains the shock she felt when she discovered the reality, and why she noticed and courageously discussed, before many others did, the intentions of the Israeli politics behind the economic deterioration.

This is how Roy summarized the significance of the term she invented, de-development, in a lecture at Birzeit University: “De-development refers to a process that undermines the ability of an economy to grow and expand by preventing it from accessing and utilizing critical inputs needed to promote internal growth beyond a specific structural level.

Unlike underdevelopment, which may distort but not forestall development entirely, de-development precludes, over the long term, the possibility of any kind of developmental process even a disarticulated one, by destroying the economy’s capacity to produce.

In Gaza, the de-development of the economic sector during the first two decades of Israeli rule transformed that economy into an auxiliary of the state of Israel. Today, given the massive destruction of its economic base over the last five years in particular, the full effects — both economic and social — of the dedevelopment process are painfully visible.”

Roy said this eight years ago, in October 2010. Basically, the situation in the Palestinian enclaves in the West Bank is no different.

At the AHLC meeting Thursday, the representatives will once again discuss the tricks to slow the disaster down. Since 1993, and lacking the political will to put pressure on Israel so it will honor international decisions, the tactic of subsidizing the occupation has been considered the appropriate and safe political means to convince Israel to retreat from the territories occupied in 1967 and let the Palestinians establish a state there.

The donations, even when reduced, were an international award to Israel in the form of humanitarian and budgetary life belt to the Palestinians.

This time a new variable will be added to the discussions, one that will become a regular factor: The United States has chosen to break all the old rules. Under U.S. President Donald Trump, Washington has refused to take part in the game of artificial respiration of the Palestinian economy, and has halted its contributions for civilian purposes.

In other words, the United States has moved from a stage of awarding Israel in the form of financial aid to Palestinians to a stage of awarding Israel by punishing the Palestinians.

Trump hasn’t hidden his political intentions: to put pressure on the Palestinians so they agree. Agree to what? Officially, we don’t know what yet, but it’s everything he and Prime Minister Benjamin Netanyahu demand of them.

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