Abstract
The de-development of the Palestinian economy began in 1967, following Israel's occupation of the West Bank and Gaza Strip (WBGS). Following the Oslo Accords of 1993, this de-development has continued. The WBGS remained dependent on the Israeli labor market for jobs until 2000, when Israel curtailed the flow of Palestinian labor to Israel following the 2000 intifada. This curtailment has resulted in sharp increases in unemployment and poverty rates in the WBGS. Closures and other actions taken by the Israeli government since 2000 have led to further de-development of the Palestinian economy. Although the WBGS has received substantial foreign aid in the post-Oslo period, the positive economic impact of such aid has been more than offset by the punitive measures taken by Israel in this period. It is highly unlikely that the Israeli government will allow the number of WBGS workers in Israel to return to its pre-2000 level. Hence, the revitalization of the Palestinian economy will require huge private investment. Such investment cannot be expected without a permanent settlement of the Palestinian-Israeli conflict that includes a Palestinian state with control over its borders and a strong link with diaspora Palestinians.
Highlights
The Oslo Accords kept 70 percent of the West Bank and 40 percent of the Gaza Strip under direct Israeli military control
Continued Israeli control over West Bank and Gaza Strip (WBGS) borders and air space has prevented the Palestinian Authority (PA) from building a seaport in the Gaza Strip and expanding the small airport built in the Gaza Strip to allow cargo transport.[3]
The Oslo Accords did not provide a mechanism for reimbursing the PA for tariffs generated by Palestinian indirect imports, which have been retained by the Israeli Treasury since 1967.6 The value of tariff revenues generated by WBGS indirect imports was estimated at 12 to 21 percent of WBGS GDP for the period 1967-1987.7 It is highly unlikely that indirect imports as a share of W BGS GDP have declined in view of the increase in the intensity of inspections and delays experienced by direct Palestinian imports in the post-Oslo period
Summary
The Oslo Accords, reached in 1993 and supposed to govern Palestinian-Israeli relations as from 1994, allowed Israel to have direct control over large areas of the West Bank and Gaza Strip (WBGS) They gave Israel control over WBGS borders with the rest of the world, WBGS underground water resources, and administration of the collection of most WBGS tax revenues. The Oslo Accords, reached in 1993, allowed Israel to have direct control over large areas of the West Bank and Gaza Strip, and gave it control over Palestinian borders, underground water resources, and administration of most tax revenues. Such control has resulted in the continued dependence of the Palestinian economy on Israel.
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