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Economic costs of Israeli occupation of Palestine


Family and friends carrying the coffin of Al Jazeera reporter Shireen Abu Akleh, who was killed during an Israeli raid in the occupied West Bank, next to Israeli security forces, during her funeral in Jerusalem on Friday –Reuters file photo Family and friends carrying the coffin of Al Jazeera reporter Shireen Abu Akleh, who was killed during an Israeli raid in the occupied West Bank, next to Israeli security forces, during her funeral in Jerusalem on Friday –Reuters file photo

The crisis and tragedy of Palestine has been continuing for more than seven decades. After the forceful creation of the state of Israel in 1948, people of Palestine have entered into a perpetual suffering. Today, May 15, they will observe the Nakba Day, the day of catastrophe which fell upon them in 1948, after the declaration of the independence of Israel on May 14.  At least 700,000 Palestinians were forced to leave their houses and took shelter in neighbouring Arab countries as refugees. Only a small number of them could return their homeland only to suffer more. The failed and disorganised attacks by Arab countries on newly born Israel brought no results. The Zionist state successfully consolidated its foothold over the years and occupied a large portion of Palestinian land. Today, Gaza Strip is under the strict blockade imposed by Israel. West Bank adjoining Jardan is also virtually controlled by Israel. These two small pieces of lands are now the divided territories of the state of Palestine.

Occupied by Israel since June 1967, the West Bank - including East Jerusalem- and the Gaza Strip constitute the occupied Palestinian territory (OPT). Since the occupation of the territories by Israel in 1967, the international community has repeatedly called for withdrawal of Israel from the occupied territories as well as establishing an independent Palestine.

The cost of Israeli occupation is quite high. United Nations Conference on Trade and Development (UNCTAD) has been assigned to estimate the economic cost  the  Palestinian people had to pay due to Israeli occupation. The UN agency made the first report in 2016. In later years, more reports were produced. The latest report was released in December last which focused on the impact of the Israeli restrictions on the economy of the West Bank as well as the socioeconomic conditions of its households in the period 1998-2019. The report also shed light on the impact of the restrictions imposed by the occupying power in the aftermath of the second intifada.

According to the report, the restriction has had 'a long-lasting negative impact that has affected all economic sectors for at least 20 years' and also has 'inflicted serious dislocations and enormous income losses on the Palestinian economy.' As a result, the territory has faced 'volatile economic growth and persistently high unemployment and poverty rates, as well as chronic internal and external imbalances.'  UNCTAD tries to shows the costs in various numbers and figures although that probably matter little to the Palestinians who have been suffering for long.

According to UNCTAD estimate,  in between 2000 and 2002, which corresponds to the peak of the second intifada, the regional economy of the West Bank shrank by 32.8 per cent, Gross Domestic Product (GDP) per capita declined by 40 per cent and unemployment increased to 28 per cent. In the period of 2007-2019, the economy of the West Bank grew to 2.5 times its size in 1999 although the average unemployment rate was about 18 per cent.

According to UNCTAD, the combined economic cost of the stricter Israeli restrictions during 2000-2019, stood at US$58 billion which is equivalent to 4.5 times the size of the West Bank regional economy or 3.5 times the size of the entire economy of the Occupied Palestinian Territory in 2019. The UN agency, however, made it clear that these are 'only estimates of lost potential GDP and do not include the cost of damage and destruction of Palestinian assets under Israeli military operations and other measures.'

Thus, the real cost of the occupation is quite higher compare to the revealed estimation. This is quite difficult to measure the real cost mainly due to lack of adequate data and tools. Moreover, perpetual human sufferings cannot be reflected entirely in the traditional economic statistics. This is the case of Palestinians who have been suffering for long.

Again, two years back in December 2020, UNCTAD estimated the economic cost of Israeli blockade on Gaza Strip which has been under a complete land, sea and air closure and restrictions since June 2007 having nearly 2.0 million people living in 365 square kilometres. The report showed that the outcome of the closure and military operations was the near collapse of the regional economy of Gaza, as well as its separation from the rest of the Palestinian economy. In economic statistical measurement, poverty headcount increased from 44.45 per cent in 2007 to 63.66 per cent in 2017. Five years later, the situation has deteriorated further. Gaza's cumulative loss of potential GDP, or part of the economic costs of occupation, in 2007-2018 was at least US$16.7 billion. UNCTAD also mentioned that these 'estimates are conservative and partial because they account only for the costs of the period of closure and restrictions and the recurrent hostilities in Gaza' and do not include the total costs of the occupation for the Palestinian people in occupied strip.

Meanwhile, the International Monetary Fund (IMF) submitted a report on West Bank and Gaza to the ad hoc liaison committee in April last. The report is basically a  technical analysis of macroeconomic situation of the occupied territory and does not explicitly say anything about the economic costs of occupation.

The IMF report showed that the Palestinian economy is enduring a fiscal crisis and the economic outlook is dire due to repeated political and security shocks as well as shock of the Covid-19 pandemic. IMF underscored the combined efforts of the Palestinian Authority (PA), Israel, and the donor community overcoming the fiscal and debt challenges faced by Palestinian economy.

Though the regular reports and suggestions of UNCTAD or IMF have brought little change in the gradual impoverishment of the Palestine, these will serve as evidences to provide minimum support to the uprooted and occupied people. The complex geo-political games have made it harder for the Palestinian to overcome their Nakba. Nevertheless, trying to determine the economic costs of occupation may be considered as a glimmer of hope no matter how far this is.

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