Israeli military checkpoints and barriers around the West Bank and Gaza doubtless restrict the flow of goods and labor to farms and businesses and serve to choke off the fledgling $14.7bn Palestinian economy.
This week, the United Nations attempted to put a figure on exactly how much the occupation was costing Palestinian officials. The number it arrived at — an estimated $48bn between 2000 and 2017 — was larger than many folks expected.
According to Mahmoud Elkhafif, from the UN’s Geneva-based trade body, UNCTAD, the losses were roughly three times the size of the entire Palestinian economy in 2017, and easily enough to pay off Ramallah’s budget deficit.
“This is not trivial money,” Elkhafif told Mondoweiss among a small group of journalists in New York on Monday.
“This could turn the economy from an economy of budget deficit to an economy of budget surplus.”
UNCTAD counted money that should have been made available to Palestinian officials under the terms of the so-called Paris Protocol, part of the Oslo Accords that were inked by Israel and the Palestine Liberation Organization in the 1990s.
In the 18-year period, UN economists found that $6.6bn had “leaked” to Israel, including tax revenue and other monies that were collected by Israel and were supposed to be transferred to the Palestinian Authority.
As an example, Elkhafif described the half a million Palestinians who buy Israeli mobile phone SIM cards, as no such Palestinian network exists, starving Palestinian officials of the chance to levy taxes on their own people.
Another $28.2bn was lost in interest payments on loans that were taken out by Palestinian officials to cover their budget.
Additional losses came from “Area C” of the West Bank, which comprises 60 percent of the Palestinian territory and where Israeli-settlement-building and security checks stop Palestinians from making use of their lands.
Losses to Palestinian coffers have snowballed these past two decades. They amounted to $565.5 million in 2000 and grew to $1.9-billion in 2017, the most recent year for which data were available.
Elkhafif’s 60-page report, The Economic Costs of the Israeli Occupation for the Palestinian People: Cumulative Fiscal Costs, will be discussed by the 193-nation UN General Assembly on Tuesday.
Life for ordinary Palestinians would have been much easier had officials been able to spend the missing $48 billion, said Elkhafif. To begin with, Ramallah could have increased development spending tenfold.
Injecting cash back into the Palestinian economy would have generated some 11,000 jobs each year. Currently, 27 percent of Palestinians are jobless, though this climbs to as high as 44 percent in Gaza.
“The impact is tremendous,” said Elkhafif. “This would have reduced unemployment rates by about 5 percent.”
Researchers called the estimated losses “partial and conservative”, saying the real figures could be higher still.
Elkhafif urged Israeli and Palestinian officials to return to the negotiation table to come up with a “fundamental change in many working arrangements” that make it easier for Palestinian officials to collect revenue from businesses that operate more freely.
Israel’s mission to the world body did not immediately respond to a request for comment from Mondoweiss.
The report comes amid growing concerns about widespread poverty across the Palestinian territories, while opportunities for brokering the creation of an independent Palestinian state with the Israelis appear ever-more remote.
In a landmark 2013 study, the World Bank found that Israel’s occupation of Area C of the West Bank was costing the Palestinian economy some $3.4bn each year, or 35 percent of the value of all goods and services traded in the territories.