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News analysis: Israel undermines Palestinian economy through restrictive measures

Xinhua, March 21, 2016 Adjust font size:

Palestinian Prime Minister Rami Hamdallah on Sunday warned of the consequences of Israel's violations to all norms and commercial treaties, adding that if Israel does not honor economic agreements, then the Palestinian side will do the same.

"Israel continues attempts to isolate Jerusalem from its surrounding and obliterate its identity, until it recently decided to ban the products of five large Palestinian companies from entering Jerusalem city to monopolize the market for its products," said the prime minister.

Last week, Palestinian economists slammed Israel for directing "a painful strike" to the Palestinian economy when it decided to ban five large food companies in the West Bank from marketing their products in Israel and east Jerusalem,

The measure is destructive to the companies, they said.

Officials with the Palestinian Ministry of National Economy said that the ban "is a flagrant breach of Paris Protocols," an agreement signed in 1995 between the Palestinians and Israel that regulates economic relations between the two sides.

They said the new Israeli measure aims at damaging the Palestinian economy.

Saeb Bamya, former Palestinian deputy minister of economy, told Xinhua "the recent Israeli measure has negative impacts on the Palestinian general revenues."

"East Jerusalem has been always considered as a major part of the Palestinian market regardless of the continued Israeli policy of politically isolating the city from the entire West Bank," Bamya said.

"It is a gradual Israeli ban which was made on purpose and is part of a collective punishment against the Palestinians). It's nothing to do with the quality of products," he said.

He warned that "these Israeli measures would put the Palestinian economy in a bottleneck, pushing it into a real crisis for the long-run."

Bamya, who is Palestinian academic director of the AIX Group focusing on Palestinian-Israeli economic study, noted that all the trade treaties and agreements the Palestinian National Authority (PNA) signed in the past with Arab and European states, which included a tax-free offer for the Palestinian products, "had become untapped due to the Israeli measures."

The unresolved conflict between Israel and the Palestinians, which has been going on for decades, is not only a political issue of establishing an independent Palestinian state, but also an economic one, according to local analysts and economists.

Palestinian observers said it is obvious that the political peace process is stalled due to Israel's policy of expanding settlements that thwarts any effort or opportunity to revive a fruitful peace talk. However, the hidden fact the world doesn't clearly know is the restrictions Israel imposed on the Palestinian economy.

They asserted that Palestinian economy is suffocated due to a series of Israeli measures that are imposed on the Palestinian trade and industry, besides keeping a tight blockade imposed on the Gaza Strip.

Samir Abdullah, former Palestinian minister of planning and director of the Palestine Economic Policy Research Institute, told Xinhua that it's very hard to attract foreign investments due to the Israeli restrictive measures on the movement of goods and people, including checking points, roadblocks and the separate wall, thus contributing to the rise of transportation costs in the territories.

According to a research report released last October by the AIX, Israeli restrictions to access to the land and to water resources also undermine productivity of the agricultural sector, which is important in Palestine. The report also said that access to 43 percent of the West Bank, mainly in area "C," remains largely off-limits to Palestinian use, earmarked instead for the use of Israeli settlements.

Meanwhile, the Palestinian economy has demonstrated growth potential.

The data from the Palestinian Central Bureau of Statistics shows that the Palestinian GDP and GDP per capita increased 3.5 percent and 0.5 percent in 2015 respectively compared with 2014. Endit