In its report in October 2019, the UN Conference on Trade and Development repeatedly states that the Israeli occupation of Palestine hinders economic development for the Palestinian people and territory. Israeli control of the movement of goods and people, as well as control of natural resources, make economic growth extremely difficult for Palestinians.

‘Israel uses us as a company. They herd us into our open air prison. They make us buy their products. We are cheap labour. We build their settlements; they take our quarries and our water; even the cows in Israel have more water than us.’

Abdullah, South Hebron Hills

Over 25 years after the Oslo Accords were signed – intended to be a temporary measure to last 5 years – Israel retains control of Palestine’s economic borders, leaving Palestinians with limited access to affordable goods and services.

As part of the Oslo Accords, the Paris Protocol (1994) established an economic customs union between Israel and occupied Palestine, as well as a shared external border. The agreement gave Israel sole control over the external borders and collection of import taxes and VAT, and international trade would be conducted through Israeli air and sea ports, or through land border crossings controlled by Israel.

In the agriculture sector for example, Palestinian farmers are not able to import certain fertilisers, which would be more effective. According to the World Bank, this has resulted in ‘lower land productivity in the Palestinian territories, in comparison to Israel, amounting to, on average … only 43 percent of the yield in Israel, per dunum [1000 square meters], despite nearly identical natural environments.’ Palestinian farmers also report difficulty obtaining licences for pesticides and water treatment solutions which means they struggle to grow produce which can meet certain market standards.

The ongoing occupation, with an economic framework that was intended to be temporary, results in Palestinians today suffering from the restriction of movement of goods and severe limitations on their ability to reach international markets.

Additionally, Israel controls all water resources in the West Bank and sells it back to Palestinians through its half nationalised, half private water company Mekorot. The lack of control of water significantly impacts the lives and the livelihoods of Palestinians – especially those whose primary income source is agriculture and/or livestock.

Palestinians who are not working in agriculture or raising livestock often seek employment in Israel or in Israeli settlements located in the West Bank, including East Jerusalem. These settlements are illegal under international law, but in some cases provide wages 60% higher than in the domestic labour market (UNCTAD).

In order to work in Israel or in settlements, Palestinians need to obtain a work permit from the Israeli Civil Administration. The work permits are issued to the Israeli employers, so Palestinians are permitted to enter Israel only through this specific employer who has applied for this specific work permit. The employer can revoke the permit at any time, and often Palestinians do not find out that their permit has been revoked until they arrive at the checkpoint crossing, having spent several pre-dawn hours waiting to pass through the checkpoint. According to many human rights NGOs, thousands of Palestinians either pay for illicit permits to cross, or are unable to cross because they have been put on a permit ‘blacklist’.

All checkpoints between the West Bank and Israel are controlled by the Israeli military, and tens of thousands of Palestinians cross the checkpoints each day in order to find work. Palestinians have to queue, often for a number of hours, in order to reach their place of work. Israelis living in the settlements in the West Bank, by comparison, use well maintained settler-only highways without having to stop at the checkpoints on their daily commute. In addition to checkpoints between Israel and the West Bank, UNCTAD reports that ‘within the 5,655 km² total area of the West Bank, 705 permanent obstacles restrict Palestinian vehicles and pedestrian movement, including checkpoints, road gates, earth mounds, roadblocks, trenches and earth walls.’

In this military occupation, Israel retains control of natural resources, revenue from imported and exported goods, and the movement of people and goods throughout Israel and occupied Palestine. Palestinians will suffer from limited economic opportunities as long as the Israeli occupation continues.

‘The prospects for the Palestinian economy are grim because the sources of growth that have propelled it in the last two decades are disappearing, while the constraints imposed by prolonged occupation persist and worsen.’ (UNCTAD)