UN agency singles out Israel for harming Palestinian economy

The United Nations Conference on Trade and Development published a report that tries to estimate the cost of Israeli military rule on Palestinian industries.

By MAX SCHINDLER
Palestinians stand atop a boat at Gaza's seaport in Gaza City October 16 (photo credit: REUTERS)
Palestinians stand atop a boat at Gaza's seaport in Gaza City October 16
(photo credit: REUTERS)
A United Nations agency accused Israel on Wednesday of impeding Palestinian economic development amid a half-century of military rule over the West Bank and a decade-long joint Egyptian blockade of Gaza.
The United Nations Conference on Trade and Development published a report that tries to estimate the cost of Israeli military rule on Palestinian industries such as agriculture, fisheries, quarry mining, tourism and manufacturing.
“Ample evidence has accumulated to show that occupation has resulted in the destruction of Palestinian productive assets and the appropriation of land and natural resources,” the report states, mentioning Israel’s natural gas projects off Gaza’s coast and its use of the West Bank water aquifer.
The UNCTD says that the division of the West Bank into Area A, B and C – with Israeli control over Area C, comprising 60% of the territory – prevents the Palestinians from developing that land. That imposes a projected cost on the Palestinian economy of about 35% of its GDP and close to $1 billion in lost tax revenue.
Yet it is unclear how the numbers are tabulated, with macroeconomic projections not necessarily offering black and white conclusions.
“The report is an exercise in complete speculation and a non-scientific ‘what-if’ logic,” said Northwestern University law Prof. Eugene Kontorovich.
“An economic analysis is not science, you make various assumptions. What would life be like if things were totally different, their projected growth rate? It’s an alternative universe...
One in which Israel left the territories and everyone lives happily after.”
And even if the UN report carries some merit, the messenger is problematic, “The overriding context is the UN’s singular obsession with Israel. They’re holding Israel to standards and criteria and relying on NGO reports to an extent that they don’t do anywhere else,” Kontorovich added.
Then-UN secretary-general Ban Ki-moon conceded such, saying in 2016 that the organization had a “disproportionate focus” on Israel, given that the Jewish state has been subject to more resolutions condemning its behavior than any other country.
And in measuring 50 years of progress, since the start of Israel’s military rule, Palestinians have seen overall solid economic growth rates, increases in life expectancy and decreases in infant mortality, Kontorovich said.
“It’s characteristic of the UN report, to take all the positive things and positive benefits to the Palestinian economy, from Israel, and to say; this doesn’t count. To discount them.”
The UNCTD report added that the creation of Palestinian Authority – created in the bilateral Oslo Accords – came at the same time that the Palestinian economy began to suffer slower growth. In other words, Israel’s direct military rule over the territories, prior to the autonomous PA, may have seen faster economic growth.
“Had the pre-Oslo Accords growth trend continued, Palestinian real GDP per capita could have been at least double its current size,” the UN report states.
The UNCTD also alleges that Israel is capturing an unfair share of Palestinian tax revenue – around 3.6% of GDP, or 17% of Palestinian public revenue.
While Oslo and its sister treaty – the 1994 economic Paris Protocol – allows Israel to collect VAT on Palestinian imports transiting through Israeli ports, that grants the Jewish state uncanny leverage over the PA’s revenue, imports and exports.
Kontorovich pushed back, saying that Palestinians would rather have Israel as their principal trading partner, as opposed to trading with Jordan or Syria.
The report concludes by urging Israel to compensate and indemnify Palestinians who may have been harmed financially by its military rule.