Assessing Palestinian Economic Exchange across the Green Line

Abstract

What economic interactions exist between Palestinians across the Green Line? Moving beyond existing literature that focuses on Palestinians’ subordinate economic relationship to the Israeli economy within Israel or between the occupied Palestinian territory and Israel, this article uses the concepts of dependency and de-development, as well as interviews with Palestinian business representatives, to assess cross-Green Line economic activity. It notes that despite relatively lower levels of violence since the second Intifada, current economic exchange between Palestinians is insufficient to realize economic self-determination because of: (1) ongoing political uncertainty; (2) the small scale nature of Palestinian capital and entrepreneurship; (3) the structural imbalance between a low cost Palestinian economy and high value Israeli economy; and (4) individual self-interest trumping national solidarity among Palestinian firms. The article concludes that for Palestinian economic self-determination to be realized, an alternative one-state political vision to replace the current two-state Oslo process may be required.