AFTER 23 years of seeking to stifle economic activity in the
occupied West Bank and Gaza Strip, Israel has begun to encourage
local business, as rocketing unemployment threatens to increase
Palestinians say Israel's recent decision to issue more business
licenses may be no more than a public relations ploy, but local
entrepreneurs are hoping to use the new policy to erect the
framework of economic autonomy.
"The civil administration is encouraging investment in order to
create places of work for Arabs" in the territories, says an Israeli
military source. New licenses have been granted to 55 businesses in
recent weeks, the largest number in such a period since the
occupation began, and last month the government authorized the
creation of the first Palestinian-owned bank since the start of the
occupation. Meanwhile, business licensing procedures have been
"This is extremely important for us," says Ghassan Kattib, a West
Bank economist. "But the areas being eased up are not enough for
viable economic development... A license by itself is not sufficient
for a successful business."
Since the start of the occupation in 1967 Israel has sought to
retard economic activity, both to keep the territories weak and to
limit the production of cheap Palestinian goods and agricultural
products that could undercut Israeli competition.
In addition to making it difficult for Palestinians to start new
businesses, Israel has denied access to raw materials from abroad
except through Israeli agents, making it harder for Arab concerns to
Until recently, Palestinians have also been denied direct access
to all foreign markets except Jordan. In addition, Israeli-imposed
curfews and commercial strikes called by Palestinians as part of
their uprising against Israeli occupation have interfered with
Israeli officials say the new shift in policy is designed partly
to create work for the thousands of Palestinians now losing their
jobs in Israel and in the Gulf states.
Israeli employers are laying off Palestinians in the wake of a
recent spate of stabbings of Jews in Israel. This violence has
sparked growing support for the idea of "disengagement," separating
Jews and Palestinians. At the same time, 1 million Soviet Jews are
expected to migrate to Israel over the next two years, and they will
be looking for jobs.
Most of the 120,000 Palestinians now working in Israel "will be
phased out in the end," says a top Israeli official. "If we
gradually could reduce the number it would be good. Maybe it would
be better if we employed Jews."
Exacerbating the problem is the return of thousands of
Palestinian workers who have been forced home from the Gulf since
Iraq invaded Kuwait in August. The result has been higher
unemployment in the territories, now at least 25 percent.
Both Israeli and Palestinian analysts expect the increased
joblessness to create political problems. …