Economic Conditions and the Future of Palestine

By Blakely, Andrew | Washington Report on Middle East Affairs, January/February 2010 | Go to article overview

Economic Conditions and the Future of Palestine


Blakely, Andrew, Washington Report on Middle East Affairs


THE PALESTINE CENTER in Washington, DC hosted an Oct. 29 talk and presentation by Palestinian entrepreneur and former Minister of National Economy Bassem Khoury. The Israeli "colonialist enterprise is the single greatest threat not only to the establishment of a viable Palestinian state but to its economic viability and, therefore, to peace," Khoury explained.

An immediate and complete halt to settlements, including settlement activity in East Jerusalem, is the only way to preserve the integrity of the peace process, he argued. The current Israeli government, however, fails to recognize this and is attempting to exchange economic peace for political peace.

While emphasizing that the two are not mutually exclusive, Khoury noted that the concept of economic peace has been used before and has proven to be unsuccessful. Citing the income differentials in the post-Oslo period, he confirmed that insufficient economic progress has been made in the absence of political peace. In fact, widening income differentials (Israeli income is now 25 times that of Palestinian income) and worsening economic conditions are the result of the closure regime, which Khoury described as "the main obstacle that faces Palestinian economic recovery."

Restrictions to access, movement, and direct links between the occupied territories have considerably stifled any attempts to stimulate the Palestinian private sector. Khoury added that the closure regime has reduced the Palestinian economy's ability to efficiently translate foreign aid funds into economic growth. "Aid alone," he contended, "cannot solve the woes of the Palestinians."

The restrictions of the closure regime prevent the Palestinian economy from meeting domestic demand. The injected aid funds, therefore, primarily are used to purchase Israeli and Chinese goods and services-a process that stimulates the economies of Israel and China, but not of Palestine. …

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