Academic journal article The Middle East Journal

Israeli Policy towards the Occupied Palestinian Territories: The Economic Dimension, 1967-2007

Academic journal article The Middle East Journal

Israeli Policy towards the Occupied Palestinian Territories: The Economic Dimension, 1967-2007

Article excerpt

This article focuses on the economic dimension of Israeli policy towards the Palestinian territories occupied in 1967. The article argues that since 1967, both before and after the Oslo process, Israeli policy was directed at preventing the "Two," i.e. the division of the land into two states and two economic (and political) sovereign entities, while also negating the "One," i.e. the establishment of a single political and economic entity. Although Israeli policy repudiated both the "Two" and the "One," it changed character and formulations from time to time. Thus, Israeli policies will be examined with all their twists, turns, and reversals, discussing their repercussions on Israel and especially on the Palestinian economy.

INTRODUCTION: THE DILEMMA OF THE OCCUPATION

"Woe to me if I do, and woe to me if I don't."

- Former Prime Minister Levi Eshkol, quoting the Talmud to Israeli Defense Force generals in 1967

Many Israelis, including those who shaped the country's policies after the June 1967 War, did not realize that Israel would continue to rule the West Bank of the Jordan River for so many years. At first, declarations and private meetings indicated that it was probably temporary, partly since there were serious doubts about Israel's ability to hold and continue to rule the newly occupied Territories.1 A clear message came from the leading global powers against the future annexation of the Territories and there was also a major discrepancy between Israel's desire to expand its sovereign territory and international law. However, Israeli policy-makers, among them Prime Minister Levi Eshkol, had other doubts arising not from the country's political ability to expand geographically, but from the implications of such a decision. In a recent account of 1967, Tom Segev wrote:

Once Eshkol shared his thoughts with IDF generals, there was no doubt as to what he wanted: A large country empty of Arabs. But not for the first time he relayed the feeling that Israel was a victim of various forces and historic processes beyond its control. Thus he used the Talmudic expression: Woe to me if I do, woe to me if I don't ... The effect of continuing conquest on Israel as a democratic, Jewish state disturbed Eshkol more than it did Moshe Dayan; this was the only real difference between them. All the rest were ego and politics.2

The far-reaching consequences of integrating the Territories into Israel were well-understood by some leaders. Annexing the Territories and erasing the pre-war economic and political borders - "the Green Line" - meant forming one geo-political unit. Forming one unit could bring about the integration of Palestinians into the Israeli polity and generate a new political reality. Conversely, preserving the border and not annexing the Territories could lead to the establishment of two political and economic units between the Mediterranean Sea and the Jordan River. The controversy between integration and separation, between erasing the Green Line and preserving it, between "One" and "Two," has haunted discussions from the very beginning.3 Understanding the continued tension between integration and separation is an integral part of any analysis of the years since 1967.

In this article I will focus on the economic dimensions of Israeli policy which refrained from deciding one way or the other, avoiding a decision on "Two" entities or "One." I will argue that since 1967 Israeli policy has been directed at preventing the "Two," i.e. the division of the land into two states and two economic (and political) sovereign entities while also negating the "One," i.e. the establishment of a single political and economic entity. Although since 1967 Israeli policy has repudiated both the "Two" and the "One," it changed character and formulations from time to time. Thus, I will examine Israeli policies in depth, with all their twists, turns, and reversals, discussing their repercussions on Israel and especially on the Palestinian economy. …

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