Palestinian business sceptical of Netanyahu's economic partnership
March 29, 2009
By Mohammed Assadi
Local Palestinian businessmen say the health of the economy is closely tied to these barriers, which grossly distort trading conditions, and that unless Israel's leader removes them, there is little scope for big improvements.
So far it is not clear exactly how Netanyahu, who said this week that a strong Palestinian economy would be a strong foundation for peace, plans to proceed.
"The Palestinian-Israeli conflict is a political, not an economic issue. You can't put the cart before the horse," said former Palestinian economy minister Mazen Sinokrot, who owns nine food and logistics firms.
Along with the checkpoints, Israel has expanded Jewish settlements in the West Bank and the protective fences around them since the Palestinian uprising of 2000, seeking to enhance its security.
Netanyahu, now assured of a majority coalition in the Israeli Knesset, said he wanted to boost the West Bank economy instead of simply negotiate a land-for-peace swap to create a Palestinian state.
"The economic track is not a substitute for political negotiations," he said, apparently seeking to ease any international concerns he might not seek a peace deal. "It's a complement to them."
Shrinking economy
"Our problem is bigger than economics," says Mohammad Mustafa, the head of the Palestine Investment Fund, which is charged with consolidating the financial resources of the Palestinian authority.
Billions of dollars in foreign aid over the years - some of it siphoned off by a corrupt elite - had made little difference, he said. Since 1999, the economy has shrunk from gross domestic product of $4.511 billion (R42.9 billion at the current rate) to $4.133 billion in 2007, official statistics show.
Netanyahu speaks of Palestinian self-government, but with only limited sovereignty because of Israel's overriding need for security. He has made no commitment to dismantling Israeli settlements built without the government's approval.
Western backers of the peace process, including British Middle East envoy Tony Blair, pointed to "areas that have been holding back Palestinian economic progress", Netanyahu said.
"We've checked quite a few of them, and we've seen that we can remove some bureaucratic handicaps without necessarily affecting our security, but definitely affecting the possibility of growth in the Palestinian economy," he says.
The Palestinians will have "a partner for peace".
Mustafa says there cannot be economic prosperity unless hundreds of Israeli checkpoints in the West Bank are removed, an airport is built and a sea port opened in Gaza.
Ruled by the Palestinian Islamist militants of Hamas, Gaza is currently blockaded by Israel to prevent its enemies rearming, Israel maintains. Movements on the West Bank are tightly controlled in a measure Israel says is intended to prevent militants reaching potential Israeli targets.
The Palestinians call this a form of collective punishment. "I do not see how we can have real economy ... to absorb the huge number of those who are not employed." Unemployment among the Palestinians was running at about 27 percent last year.
Bewildering patchwork
West Bank businesses have to operate in a country where some 60 percent of the land, classified by the 1993 Oslo preliminary peace accords as Area C, is under full Israeli security and civil control.
Palestinian farmers have little access to the fertile fields of the Jordan Valley, which constitute about one-third of the total area of the West Bank land, Sinokrot notes.
Areas under Palestinian self-rule are classified as Area A. But in so-called Area B lands, Israel has security control, while Palestinians have civil control. In this bewildering patchwork, there is little territorial continuity between A and B. Most major Palestinian companies are in Area A, creating an artificial land shortage in which prices have rocketed.
"It's time that classification of our land as Area C come to an end," said Palestinian Prime Minister Salam Fayyad.
Since the Oslo accords, international powers have advocated a Palestinian state alongside Israel.
"Economic peace won't work," said Mustafa. "The economy can prosper only in the context of an appropriate political environment, where you have stability, sovereignty and control your own land and borders." - Reuters
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