Issue: the Palestinian Economy the Palestinian Economy

Issue: The Palestinian Economy

The Palestinian Economy

By: Sara Toth Stub

Pub. Date: March 26, 2018 Access Date: September 30, 2021 DOI: 10.1177/237455680410.n1 Source URL: http://businessresearcher.sagepub.com/sbr-1946-106230-2884484/20180326/the-palestinian-economy ©2021 SAGE Publishing, Inc. All Rights Reserved. ©2021 SAGE Publishing, Inc. All Rights Reserved. Can it grow in the absence of peace? Executive Summary

The Palestinian economy in the West Bank and Gaza is weighed down by a lack of modern infrastructure, Israeli restrictions on the flow of goods and people and internal political conflict. The result is weak economic growth and high unemployment, especially among younger Palestinians. The consequences of this economic stagnation could include increased regional instability and a greater risk of violence. The key to progress ultimately lies in finding a political solution to the decades-old conflict between Palestinians and Israel, which could make it easier to attract investment. But the peace process is stalled, and the Trump administration’s decision to move the U.S. embassy to Jerusalem has undermined the chances that the United States can broker a deal between Israeli and Palestinian leaders. Key takeaways include: Palestinian GDP, adjusted for inflation, is about the same as in 1999. The little economic growth that has occurred in recent years was fueled mainly by international aid money, which is declining as countries around the world change their budget priorities. The Palestinian economy depends mostly on the production of building materials, information technology, agriculture, tourism and banking. Click here to listen to an interview with author Sara Toth Stub or click here for the transcript. Full Report

The new West Bank community of Rawabi has experienced problems that reflect the challenges of the broader Palestinian economy. (Highlight Films/The Washington Post via Getty Images)

Perched on a hilltop outside the Palestinian city of Ramallah, thousands of apartments in the new West Bank town of Rawabi offer views stretching to the Mediterranean Sea. Sidewalks connect several open squares. There are shops, an English-language school and a high- tech park. Built at a cost of $1.2 billion by a Palestinian-American investor, this first planned, modern town in the Palestinian territories represents what many hope is a brighter future. “This is just the beginning,” says Jack Nasser, the project’s development manager.

But four years after Rawabi’s first housing units were complete, the town is still mostly empty. Developers have encountered a number of setbacks, including a dispute that led Israeli officials to deny Rawabi access to water in 2014. Israel later relented, but “it’s only enough water for today,” Nasser says. “This will still be a challenge in the future.” Homes are selling more slowly than expected. As of November, only 3,000 people lived in the middle-class town built for 40,000. 1 Rawabi’s unrealized potential mirrors the slumping trajectory and thwarted expectations of the overall Palestinian economy. Hopes for sustainable economic growth in Gaza and the West Bank are hostage to a lack of infrastructure and Israel’s restrictions on goods and people flowing into and out of the two territories, which have been under Israeli control since 1967. Palestinians suffer from frequent electricity and water shortages, and the international aid they have relied on for decades is now declining. 2 Adjusted for inflation, Palestinian gross domestic product (GDP) is at the same level it was in 1999. 3 Internal political conflicts also hamper the Palestinian economy. Hamas, the Islamic fundamentalist group that holds power in Gaza, and Fatah, the dominant political party in the Palestinian Authority (PA), which governs the West Bank, have been feuding since 2007. PA officials have reduced payments to government employees in Gaza by between 30 percent and 70 percent and cut spending on electricity and other vital infrastructure there. 4 The consequences of these problems could be far-reaching. A failure to reverse the territories’ economic stagnation will add to regional instability and “help support terrorism and those who recruit terrorists, or fighters, or whatever you want to call them,” says Arie Arnon, an Israeli who is professor emeritus of economics at Ben-Gurion University in Beersheba, Israel. He is also a co-coordinator of the Aix Group, a joint Israeli-Palestinian think tank founded in France. Each year that goes by represents lost potential investment opportunities from foreign individuals and companies, says Sam Bahour, an American-Palestinian entrepreneur who has invested in the Palestinian retail and information technology sectors and is a board member of the policy think tank Al-Shabaka. “The investments are not as much as they should be,” Bahour says. This is happening against a backdrop of diminished prospects for an Israeli-Palestinian peace agreement. There are no talks taking place between the parties, and the Trump administration has veered from traditional U.S. policy by announcing it will move the U.S. embassy from Tel Aviv to Jerusalem, as early as May. 5 The move upset Palestinians, who also claim the holy city as their capital, and led to rioting and to Palestinian officials refusing to meet with U.S. officials. 6 The two territories – Gaza, which sits on the Mediterranean coast and shares a seven-mile border with Egypt, and the West Bank, which lies between Jordan to the east and the pre-1967 borders of Israel to the west – have a combined population of about 4.6 million. 7 Israel unilaterally withdrew its troops from Gaza, along with its citizens residing in settlements there, in 2005, while maintaining control over its airspace and sea access. 8 Israel still has a military presence throughout the West Bank, as well as a growing population in Jewish settlements there. 9 The territories’ shared economy depends mostly on the production of building materials, information technology, agriculture, tourism and banking. 10 The tech sector has grown in recent years, but mainly consists of outsourced contracts and jobs at local telecoms and internet service providers. 11 Agricultural products include olive oil, fruits, vegetables, poultry, meat, eggs and honey, with production high enough to satisfy most local needs and with most exports headed to Israel. 12 Despite the macroeconomic instability, the banking sector has grown in recent years and increased its profits, directing most of its activities toward loans to the local public and private sectors. 13 Palestinians do not have their own currency and instead use Israeli shekels, Jordanian dinars, U.S. dollars and euros. 14 Economic conditions improved following a 2014 war between Israel and militants in Gaza, but primarily because of international aid directed at rebuilding the territory and helping Palestinians recover from the conflict. More recently, international aid has fallen off, and growth has slowed. 15 In 2016 “the productive capacity of the Palestinian economy continued to erode, economic performance was far below potential and unemployment persisted at levels rarely seen around the world since the Great Depression,” according to a September 2017 report from the United Nations Conference on Trade and Development, which helps developing countries improve their trade, finance, investment and technology opportunities. 16 Youth Unemployment Tops 40%

Jobless rate for Palestinians under age 25, 2000-17

Source: “Youth Unemployment Rate for the Occupied Palestinian Territory,” Federal Reserve, Bank of St. Louis, Jan. 18, 2018, https://tinyurl.com/yc4nrazp

The unemployment rate for Palestinians ages 15 through 24 has almost doubled since 2000, the year the second intifada began, reaching about 42 percent in 2017.

The International Monetary Fund (IMF) estimated in February that annual economic growth for 2017 was about 3 percent, down from 4 percent in 2016. 17 Seventy percent of Gaza’s population depends on international aid. “The central challenge is to revive growth and generate sufficient jobs for a burgeoning population,” fund officials said. 18 The unemployment rate in mid-2017 was 21 percent in the West Bank and 44 percent in Gaza, according to the World Bank. 19 Joblessness in Gaza could reach 48 percent by 2025, according to the bank. 20 And there are signs that a sense of hopelessness has overtaken residents there. “Nobody is buying in the stores, businesses are closing, people no longer have anything to lose,” one resident told a journalist. 21 Another said he feels like “an explosion’s coming.” 22 In February, the chief of staff of the Israel Defense Forces warned Israeli cabinet members that worsening economic and humanitarian conditions in Gaza could lead to new outbreaks of violence against Israel. 23 Security concerns have led Israel to tightly monitor goods and people moving in and out of the Palestinian territories, hampering residents’ access to international markets and job sites outside the territories. 24 Israel requires special licenses for importing into the territories materials that it fears could be used to carry out violence, such as cement, fertilizer and certain types of machinery. 25 The restrictions are especially severe in Gaza because Israel, like the United States and a number of other nations, views Hamas as a terrorist organization. Since 2007, when Hamas took over Gaza, Israel has enforced a sea, air and land blockade on the strip, citing security concerns. 26 Israeli inspections have blocked numerous attempts to smuggle in explosives and contraband, but they also increase the cost of importing chemicals and machinery vital to agriculture and industry in the territories. 27 As a result, Palestinians depend heavily on imported finished goods. 28 Imports far exceed exports, and the persistent Palestinian trade deficit is now about 40 percent of GDP, one of the highest in the world. 29 Recent Israeli steps to boost exports, such as allowing more agricultural products to leave Gaza and extending the summer hours at the Allenby Bridge that connects the West Bank to Jordan, have had little impact, experts say. 30 “It may save some people a bit of time and money, but it’s not enough,” says Samir Hazboun, a Palestinian economist who chairs the Bethlehem Chamber of Commerce & Industry and sits on the advisory board of the Palestine Investment Fund, a sovereign wealth fund investing in the West Bank and Gaza. World Bank officials said that removing Israel’s restrictions on Palestinian trade could boost the territories’ economy by more than 36 percent over the next seven years. 31 But with peace talks stalled, Israel continues to say that the restrictions are needed for security. 32

In 2010, Israeli officials began allowing more West Bank Palestinians to work in Israel and Israeli settlements in the West Bank, more than doubling the number of those workers between 2010 and 2015. 33 But Israel continues to severely restrict movement in and out of Gaza, where it believes the security threat is greater. 34 Some experts, including Palestinian Authority officials, say allowing more Palestinians to work in Israel is a key to economic growth, because wages in Israel are higher and Palestinian jobs are scarce. 35 But the Palestinian anti-normalization movement – which advocates severing all ties with Israel to avoid “normalizing” its existence – pressures Palestinians not to work or engage with Israel at all, says the Aix Group’s Arnon. In addition, any flare-up in violence between Palestinians and Israelis often prompts Israel to close checkpoints, Arnon says. “These jobs in Israel can be a good option, but people pay a high price in terms of commuting time, and also any threats they may receive,” he says. Although Israeli-owned businesses in the West Bank provide employment for Palestinians, international pressure, including the Boycott, Divestment and Sanctions (BDS) movement, makes business owners and investors wary of future prospects. 36 Although data do not indicate significant economic damage to Israel’s overall economy from the BDS movement and other pressure, anecdotal evidence shows that this does have an effect on certain companies. SodaStream, an Israeli company that makes at-home sparkling water machines, closed its factory in a West Bank settlement in 2014 due to BDS pressure. However, it has fought to maintain permits to allow some of its Palestinian workforce to continue working at its new location in southern Israel. 37

Palestinians protested President Trump’s decision to move the U.S. embassy from Tel Aviv to Jerusalem. (Ashraf Amra/Anadolu Agency/Getty Images)

The Palestinian economy also suffers from policies derived from a 1995 agreement, part of the Oslo accords, between the Palestinians and Israel that has left about 60 percent of the West Bank under Israeli joint civil and military control and made it difficult for Palestinians to pursue economic development there, with needed permits for buildings and other infrastructure rarely granted. 38 This division of land was meant to be temporary, but with the collapse of peace talks, Israel remains in control of the area. 39 Israeli government officials say that Palestinians can build in these areas as long as they follow the correct procedures. 40 But opponents of Israeli policies say that Israel is taking advantage of the situation to squeeze the Palestinians and expand Israeli settlements on these lands. 41 Absent a final agreement between the Palestinians and Israel, the land, known as Area C, remains under Israeli control. Removing the 1995 restrictions would expand Palestinians’ access to natural resources such as farmland, water and stone for quarrying, and would boost the economy by one-third over the next eight years, according to the World Bank. 42 It also would allow Palestinians to develop tourist sites along the Dead Sea and other locations. 43 Access to reliable electricity in Gaza remains a significant problem, with the Palestinian Authority cutting the amount of money it would pay

Israel to supply the Hamas-dominated territory with electricity. (Palestinians generate almost none of their own power and purchase 86 percent of their electricity from Israel.) 44 In addition, Gaza’s residents cannot rely on their territory’s small power plant or on privately owned generators because of fuel shortages. Blackouts are frequent. 45 “If you want to grow an economy, you need electricity, and there is no reliable source,” says Gershon Baskin, an Israeli who is co-chairman of Israel-Palestine: Creative Regional Initiatives, a think tank that conducts research and runs co-existence and development projects in the region. Lack of electricity is less severe in the West Bank, where residents receive about 90 percent of the power they need, Baskin says. Solar energy offers one alternative, both for supplying energy and attracting foreign investment in infrastructure. “Solar energy is the only real local source of energy the Palestinians have,” World Bank economist Vivien Foster recently wrote. “It can supply a margin of safety that will guarantee the basic needs of the population and a supply of electricity to hospitals, water, and sewage systems.” A small solar power plant opened in the West Bank at the end of 2017, and there are plans for others to open. 46 Israel, however, still controls the energy grid, and connecting solar power facilities to it involves technical and bureaucratic hurdles that many Palestinians cannot overcome, Baskin says. Building an independent Palestinian energy grid would take about $3 billion and more than 10 years, according to the World Bank. 47 Prospects for foreign aid are similarly discouraging. It has declined over the last several years, according to the IMF, and the 2018 Palestinian Authority government budget relies on 14 percent less aid than in 2017. 48 Politics also plays a role: The Trump administration said in January that the United States, one of the largest providers of aid to the Palestinian Authority and other local programs, would withhold $45 million in food aid it had pledged to the United Nations Relief and Works Agency, demanding unspecified policy reforms at the agency. 49 In addition, legislation pending in Congress would cut U.S. money to the Palestinian Authority unless it stops financial support to the families of Palestinians killed or jailed in connection with terrorist attacks against Israel and the United States. 50 The decline in aid has forced the Palestinian Authority to cut budgets and adopt austerity measures, putting at risk the salaries of teachers, police and other public sector employees. 51 PA officials also cite it as one reason they have reduced spending in Gaza. 52 “The donor money is real money,” says Bahour, the American-Palestinian entrepreneur. “It is the funds that are propping up our reality.” Palestinian bank loans to PA employees and to Palestinians in the private sector, meanwhile, have increased. 53 “Banks are taking big risks to make these profits to survive,” says Orobah Barghouthi, former executive director of the Palestine Monetary Authority and an assistant professor of economics and business at Al Quds University in East Jerusalem. “In general, loans are a good means of growth, but it can be too much and too risky.” The political problems holding back the Palestinian economy also defy quick solutions. Hamas and Fatah had been moving toward a reconciliation, but that effort appears to have stalled. 54 The Palestinian legislature has not convened since the two factions split in 2007, preventing development of a regulatory framework that could draw more foreign investment. 55 Palestinian Trade Costs Are Extremely High

Average cost per transaction (U.S. dollars)

Source: “Economic Monitoring Report to the Ad Hoc Liaison Committee,” The World Bank, Sept. 18, 2017, p. 6, https://tinyurl.com/ycpfuagb

Because of trade barriers, the average trade cost per transaction for a Palestinian firm is almost three times higher than that of an Israeli firm, according to the World Bank.

IMF officials said the Palestinian Authority also needs to remove bureaucratic hurdles that make it difficult for Palestinians to open and maintain businesses. 56 According to a recent World Bank study, the West Bank and Gaza ranked 114th out of 190 countries on the ease of doing business, on par with countries such as the Philippines and Honduras – although this was an improvement from its 140th-place ranking in 2017, mainly because it became easier for businesses to get loans. 57 Middle East experts say high-tech ventures could help Palestinians overcome some of the political and other obstacles holding back their economy. Rawabi’s developers, for example, hope it will someday become a hub for high-tech industry, which entrepreneurs say is less affected by hindrances such as Israeli checkpoints than companies selling physical goods. 58 Palestinian technology startups have received venture capital funding, mainly from Sadara Ventures, a firm set up by Israeli- and Palestinian-Americans and backed by Google, and thousands of Palestinian engineers in Gaza and the West Bank have received outsourced tech work from international companies. 59 The Israeli subsidiaries of Cisco, Microsoft, HP and Intel have outsourced work to Palestinians. 60 Among the startups funded by Sadara is Yamsafer, a travel booking service tailored to Arab-world clients, and SoukTel, which provides digital communication services to agencies and others working in hostile and hard-to-reach environments. 61 For now, the only high-tech companies in Rawabi are ASAL Technologies, a Palestinian software company with numerous international clients, and a few startups. But the community hopes to attract more startups and outsourcing companies and create a high-tech ecosystem, says Murad Tahboub, ASAL’s managing director. “It’s very important to create a geographic center for the industry, this will help attract foreign companies, because they will find everything easily and not spread out all over the West Bank.” The growth of the sector, along with more foreign investment in it, is key to growth for the Palestinians economy, he says. But only about 40 percent of Palestinian engineering graduates find high-tech jobs in the territories, Tahboub says, and he acknowledges there is a long way to go. Middle East experts say Rawabi and ASAL are examples of the kind of private-sector ventures that could eventually help Palestinians realize their economic goals. But they say the economy will continue to perform short of its potential without a breakthrough in the peace process with Israel. 62

“Right now, all of these investments are what I would call ‘patient capital,’ ” Bahour said. “They are made by people who are convinced there will be a political solution. But we are still waiting.” About the Author

Sara Toth Stub is a Jerusalem-based U.S. journalist who has written for The Wall Street Journal, The Atlantic, U.S. News & World Report and other publications. She usually covers business, culture and travel, and you can follow her work at @saratothstub. Chronology

1948-2000 From war to intifada. 1948 Zionist leaders declare an independent state of Israel in the land in Palestine that the United Nations designated for Jews. Arab countries oppose the decision and war breaks out, lasting until 1949 and ending with Jordan in control of the West Bank and part of Jerusalem. 1950s-60s West Bank economy grows under Jordanian control, including the development of a tourism sector and infrastructure. 1967 Israel takes control of all of Jerusalem, the West Bank and Gaza after its victory in the Six-Day War against Egypt, Jordan and Syria. 1967-1987 Following the war, Palestinians begin integrating into the Israeli economy. With 25 percent of Palestinians working in Israel, living standards rise. 1987-1993 A popular Palestinian uprising against Israel called the intifada breaks out, resulting in fewer Palestinians working in Israel. 1993 Israeli and Palestinian leaders sign the Oslo agreement, which establishes a timetable for a full peace process and sets up an interim Palestinian government in Gaza and in Jericho in the West Bank. 1994 As part of the Oslo peace process, the Paris Protocol is signed to govern economic relations between Israel and the Palestinians. Israel agrees to transfer value-added tax revenues on goods bought in the Palestinian territories to the Palestinian government. Palestinians are allowed to conduct their own economic policies to a limited extent, including setting up a monetary authority, levying taxes and employing people in a public sector. 1995 Israeli and Palestinian leaders sign Oslo II, also known as the Taba Agreement, which divides the West Bank into areas A, B, and C, as a temporary step in an ongoing peace process. Palestinians have rights to use land in areas A and B, but Israel maintains control of all security and building rights in Area C, which today is about 60 percent of the total West Bank, effectively making it off-limits for Palestinian economic development. 2000-Present Conflicts, internal strife damage Palestinian economy. Early 2000s Another Palestinian uprising, known as the second intifada, breaks out. It results in increased Israeli security regulations and checkpoints throughout Gaza and the West Bank and fewer Palestinians working in Israel. The Oslo framework, including the Paris Protocol, cannot be implemented due to the violence; the Palestinian economy becomes more reliant on international aid and donor money. 2005-2006 Israel unilaterally pulls out of Gaza in late 2005. After the Islamic fundamentalist party Hamas wins a majority in Palestinian elections in 2006, Israel withholds taxes it has collected on behalf of the Palestinian Authority. The international community also cuts back its financial aid, resulting in a severe fiscal crisis for the authority. 2007 Hamas wins control of Gaza in an armed conflict with Fatah. Israel and Egypt respond by imposing a land, air and sea blockade on the territory, taking a severe economic and humanitarian toll. 2008-present Israel battles militants in Gaza in periodic airstrikes and in three different military operations, destroying infrastructure and bringing the economy to a halt. In the West Bank, growth is stagnant and the economic future uncertain as the peace process stalls. 2017 President Trump announces that the United States will move its Israeli embassy from Tel Aviv to Jerusalem, effectively recognizing the contested holy city as Israel’s capital and angering Palestinians, who say it should be part of their future state.

Resources for Further Study Bibliography

Books

Niksic, Orhan, Nur Nasser Eddin and Massimiliano Cali, “Area C and the Future of the Palestinian Economy,” The World Bank, 2014. The World Bank analyzes the impact of Israeli restrictions on Palestinian economic development in a region that constitutes 60 percent of the West Bank. Turner, Mandy, and Omar Shweiki, eds., “Decolonizing Palestinian Political Economy: De-development and Beyond,” Palgrave Macmillan, 2015. Two scholars bring together essays on several aspects of Palestinian economic life.

Articles

Gal, Yitzhak, “The Palestinian Economy, Gaza Reconstruction, and Israel: Crises and Possibilities,” Iqtisadi, vol. 5, no. 7, The Moshe Dayan Center for Middle Eastern and African Studies, Tel Aviv University, July 29, 2015, https://tinyurl.com/ycxbuygh. A detailed report by the co-chair of Tel Aviv University’s Dayan Center Middle East Economic Forum on recent developments and challenges in the Palestinian economy. Greenwald, Diana B, “Who is Responsible for Solving Gaza’s Massive Electricity Crisis?” The Washington Post, Feb. 5, 2018, https://tinyurl.com/ya8woump. A postdoctoral research fellow at the Harvard Kennedy School’s Middle East Initiative explains the challenges facing efforts to solve Gaza’s electricity shortage. Halbfinger, David M., “With Gaza in Financial Crisis, Fears that ‘an Explosion’s Coming,’” The New York Times, Feb. 11, 2018, https://tinyurl.com/yab24tzd. The New York Times’ Jerusalem-based correspondent provides a close-up look at the economic and humanitarian crisis unfolding in Gaza. Kaufmann, Yadin, “Start-Up Palestine | How to Spark a West Bank Tech Boom,” Foreign Affairs, July/August 2017, https://tinyurl.com/y8sr2l7q. The founder of a venture capital firm gives an overview of the Palestinian high-tech sector and discusses its potential.

Reports and Studies

“Economic Monitoring Report to the Ad Hoc Liaison Committee,” The World Bank, Sept. 18, 2017, http://tinyurl.com/ycpfuagb. The most recent report gives detailed background and an outlook for the economy in the West Bank and Gaza. “West Bank and Gaza: Report to the Ad Hoc Liaison Committee,” International Monetary Fund, Aug. 31, 2017, https://tinyurl.com/y7lckgya. The IMF’s most recent report on the West Bank and Gaza details the territories’ political and economic challenges. Arnon, Arie, and Seab Bamya, eds., “Two Further Studies: Improving the Gazan Economy and Utilizing the Economic Potential of the Jordan Valley,” The Aix Group, November 2016, https://tinyurl.com/y86hwl3w. Israeli and Palestinian scholars, in collaboration with the World Bank, discuss possible solutions to lack of growth in the Palestinian economy. The Next Step

Anti-normalization Movement

“Modi visits Ramallah: to balance out Israel, Palestine relation with India,” Pakistan Today, Feb. 8, 2018, https://tinyurl.com/ybo6nzy4. India has ended its long-standing support for anti-normalization – the movement that advocates severing all ties with Israel to avoid “normalizing” the latter’s existence – and seeks to balance its relations with Israel and the Palestinians. Lieber, Dov, “Set your sights nearer: Forum urges Israel entrepreneurs to market to Arab world,” The Times of Israel, Jan. 24, 2017, https://tinyurl.com/yburfshn. Two Tel Aviv University students organized a forum to press Israel to pursue closer economic relations with its Arab neighbors, including Palestinians, despite the region’s history of anti-normalization. Teicholz, Tom, “The Real Jerusalem (Nir Hasson’s Urshalim),” Forbes, Nov. 2, 2017, https://tinyurl.com/yb3r42fp. A Jerusalem-based reporter and author discusses the dynamics of relations between Israel and the Palestinians, including the increasing pervasiveness of the Palestinian anti-normalization drive.

Tech Industry

“Quietly, Israeli high-tech companies contract Gaza engineers,” Agence France-Presse/ The Times of Israel, Sept. 20, 2017, https://tinyurl.com/yb5e6g7s. Israeli tech firms are hiring a growing number of Palestinian engineers in Gaza, despite the risk that Hamas, which holds power in Gaza, could kill the workers for collaborating with the enemy. Cuen, Leigh, “Palestinian Women Are Shaking Up The Tech Industry,” International Business Times, Sept. 14, 2017, https://tinyurl.com/ycekud9l. An East Jerusalem-based startup, My Pink Electronics, aims to help Palestinian women make their mark in the region’s burgeoning tech industry. Maltz, Judy, “In Rare Public Appeal, Palestinians Woo Israeli High-tech Firms,” Haaretz, July. 13, 2017, https://tinyurl.com/y7p6egjx. An Israeli tech hub and a Palestinian software firm touted the mutual benefits of expanding business relations between the two parties. Organizations

Aix Group http://aix-group.org/ [email protected] A joint Israeli-Palestinian-French think tank registered in France that produces position papers on economic issues related to the Israeli- Palestinian conflict. Coordination of Government Activities in the Territories (COGAT) Foreign Relations Branch, HaKirya, Tel Aviv, Israel +972 3 697-7957 FAX: +972 2 970 4704 www.cogat.mod.gov.il [email protected] Section of Israeli Defense Department that carries out humanitarian and infrastructure investment projects, publishes statistics on the movement of goods and people to and from the Palestinian Territories and works with the Palestinian Authority to oversee civilian border crossings into Israel. Gisha - Legal Center for Freedom of Movement 42 Harakevet St., Tel Aviv-Jaffa, Israel 6777008 +972 3-6244120 FAX: +972 3-6244130 http://gisha.org/ [email protected] Israeli nonprofit organization that reports on and promotes freedom of movement for Palestinians in the West Bank and Gaza. The Initiative for the Palestinian Economy Office of the Quartet, P.O. Box 55384, Jerusalem, 95908 +9722-6333318 www.quartetoffice.org/page.php?id=5da3e3y6136803Y5da3e3 An initiative run by the Quartet – the United States, European Union, United Nations and Russia – that assesses sectors of the Palestinian economy most ripe for growth. International Monetary Fund (West Bank and Gaza Office) P.O. Box 54842, World Bank Building, Dahiet Al-Barid, Jerusalem +972 2 236 6530 FAX: +972 2 236 6543 www.imf.org/en/countries/resrep/wbg [email protected] Provides policy support and technical assistance to the West Bank and Gaza on macroeconomic and fiscal matters. Palestine for Development Foundation Ramallah, Al Masyoon, Padico House, 8th Floor, West Bank, Palestine +972 2-295 0567/8 FAX: +972 2-295 0565 www.psdf.ps/ [email protected] Invests in efforts to boost Palestinian employment and make the Palestinian territories more self-reliant and competitive. Palestine Investment Fund P.O. Box 413, Amaar Building, Al-Ersal St., Ramallah, Palestine +972 2 296 9600

FAX: +972 2 296 9617 www.pif.ps/english.php Palestinian national sovereign fund that invests in the private sector to boost employment and help Palestinians develop an independent economy. Palestinian Central Bureau of Statistics P.O. Box 1647, Ein Munjed Quarter, Tokyo St., Ramallah, Palestine +972 2-298 2700 FAX: +972 2-298 2710 www.pcbs.gov.ps/ [email protected] Collects employment, economic growth, demographic and other statistics to aid Palestinian policymakers. The World Bank (in the West Bank and Gaza) P.O. Box 54842 North 91547, Jerusalem +972 2 236 6500 http://www.worldbank.org/en/country/westbankandgaza [email protected] Researches economic and employment trends in the Palestinian territories and operates a trust fund that provides Palestinians with funding assistance. Notes

[1] Anne-Marie O’Connor, “New Palestinian City has condos, a mall and a sports club—but no water,” The Washington Post, Feb. 25, 2015, https://tinyurl.com/ydbwtydk; “Rawabi: New Palestinian city rises with sleek homes and boutiques,” The National, Nov. 21, 2017, https://tinyurl.com/yb9emmmj; Eric Reguly, “Rawabi: A City of Dreams for Hopeful Palestinians,” The Globe and Mail, Nov. 12, 2017, https://tinyurl.com/y7kpa6g3. [2] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” The World Bank, Sept. 18, 2017, p. 5, https://tinyurl.com/ycpfuagb. [3] “Report on UNCTAD Assistance to the Palestinian People: Developments in the Economy of the Occupied Palestinian Territory,” United Nations Conference on Trade and Development, 2017, p. 1, https://tinyurl.com/ycoth3u4. [4] Isra Namey, “Gaza pay cuts deepen rift between PA and Hamas,” Al Jazeera, April 11, 2017, https://tinyurl.com/yaszmcwt; Jack Khoury, “Palestinian Authority Forces 6,000 Gazan employees into early retirement,” Haaretz, July 5, 2017, https://tinyurl.com/ycatoqwz; David M. Halbfinger, “With Gaza in Financial Crisis, Fears That ‘an Explosion’s coming,’ ” The New York Times, Feb. 11, 2018, https://tinyurl.com/yab24tzd. [5] Gardiner Harris and Isabel Kershner, “Hard-Line Supporter of Israel Offers to Pay for U.S. Embassy in Jerusalem,” The New York Times, Feb. 23, 2018, https://tinyurl.com/yba56phd. [6] “PA Turns Down Invitation to White House Meeting on Gaza Crisis,” The Times of Israel, March 10, 2018, https://tinyurl.com/y72b3sfl; “Palestinians Protest US Embassy Move, Clash with Israeli Troops,” Reuters/The Jerusalem Post, Jan. 12, 2018, https://tinyurl.com/ydx2uu5n. [7] “Middle East: Gaza Strip,” The World Factbook, Central Intelligence Agency, https://tinyurl.com/ysemej; “Middle East: West Bank,” The World Factbook, Central Intelligence Agency, https://tinyurl.com/2zggyu. [8] William Booth and Ruth Eglash, “A decade later, many Israelis see Gaza pullout as a big mistake,” The Washington Post, Aug. 15, 2015, https://tinyurl.com/yb6lgsfm. [9] Josef Federman, “Israeli Settler Leader Says Settlements Continued to Grow in 2017,” Associated Press/Time, Feb. 22, 2018, https://tinyurl.com/y8vy2k4l. [10] “The Initiative for the Palestinian Economy,” Office of the Quartet, undated, accessed Feb. 13, 2018, https://tinyurl.com/yavbdkp9. [11] Mashhour Abudaka, “The Telecommunication and IT Sector in Palestine,” This Week in Palestine,” Oct. 31, 2016, https://tinyurl.com/y8f4nwra. [12] “The Besieged Palestinian Agricultural Sector,” United Nations Conference on Trade and Development, 2015, p. 10, https://tinyurl.com/y9yo27tf. [13] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit.

[14] Marc Jones, “Palestinians hope to launch e-currency in 5 years,” Reuters, May 12, 2017, https://tinyurl.com/y7nthomt. [15] “GDP, West Bank and Gaza,” The World Bank, undated, accessed Feb. 13, 2018, https://tinyurl.com/ybpqn8fb; “Palestinian Territories,” The World Bank, 2017, https://tinyurl.com/y9gy7cll. [16] Ibid. [17] “IMF Staff Concludes Visit to West Bank and Gaza,” press release, International Monetary Fund, Feb. 20, 2018, https://tinyurl.com/y89lxtyj. [18] “West Bank and Gaza: Report to the Ad Hoc Liaison Committee,” International Monetary Fund, Aug. 31, 2017, file:///C:/Users/Kfireman/Downloads/091117WBG.pdf. [19] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit. [20] Ibid. [21] Avi Issacharoff, “As economy crumbles and with ‘nothing to lose,’ war in Gaza grows likely,” The Times of Israel, Jan. 4, 2018, https://tinyurl.com/yacz54lh. [22] Halbfinger, op. cit. [23] Times of Israel Staff and Stuart Winer, “IDF chief said to warn Gaza war likely if humanitarian crisis persists,” The Times of Israel, Feb. 4, 2018, https://tinyurl.com/ybouvvss. [24] “Restrictions on Movement,” The Israeli Information Center for Human Rights in the Occupied Territories,” Nov. 11, 2017, https://tinyurl.com/yasfbw6h; “IMF Staff Concludes Visit to West Bank and Gaza,” op. cit.; Halbfinger, op. cit.; “West Bank and Gaza Report to the Ad Hoc Liaison Committee,” op. cit., p. 13. [25] “List of Dual-Use Items Requiring a Transfer License,” Coordination of Government Activities in the Territories, undated, accessed Feb. 13, 2018, https://tinyurl.com/ycn45bs4. [26] “Gaza Blockade,” The UN Office for the Coordination of Humanitarian Affairs, https://tinyurl.com/y9b5ohwl. [27] “MOD foils attempts to smuggle packages containing explosives through Kerem Shalom crossing,” Israel Ministry of Foreign Affairs, Feb. 4, 2018, https://tinyurl.com/y6u3q5e3; “Dual-Use Lists,” Office of the Quartet, undated, accessed Feb. 13, 2018, https://tinyurl.com/yd5hzqmz. [28] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit., p. 5. [29] Ibid. [30] “Hours of Operation Extended at Allenby Bridge,” Coordination of Government Activities in the Territories, June 21, 2017, https://tinyurl.com/ya8txo4c; “Significant Increase in Agricultural Exports/Transfers from Gaza in 2016,” United Nations Office for the Coordination of Human Affairs, Monthly Humanitarian Bulletin, December 2016, p. 7, https://tinyurl.com/y9mfso7e. [31] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit., p. 6. [32] “World Bank Calls for steps to bolster Palestinian Economy,” Reuters/YNet News, Dec. 9, 2017, https://tinyurl.com/y8bw3s4y. [33] Yitzhak Gal, “The Palestinian Economy, Gaza Reconstruction, and Israel: Crises and Possibilities,” Iqtisadi Middle East Economy,” Tel Aviv University, vol. 5, no. 7, July 29, 2015, p. 10, https://tinyurl.com/ycxbuygh. [34] “Restrictions on Movement,” op. cit.; “2017 Tightening of the Closure,” Gisha Legal Center for the Freedom of Movement, undated, accessed Feb. 14, 2018, p. 1, https://tinyurl.com/ycvdht7a. [35] Adam Rasgon, “Israel Planning to Increase Work Permits for Palestinians,” The Jerusalem Post, Jan. 12, 2018, https://tinyurl.com/ydypvb24. [36] Sara Toth Stub, “Business Owners in Israeli Settlements Confront Boycott Threat,” The Wall Street Journal, June 10, 2015, https://tinyurl.com/yd4ztsz9. [37] “SodaStream bringing 74 Palestinians back to work in Israel,” Jewish Telegraphic Agency/The Times of Israel, May 24, 2017, https://tinyurl.com/yda8blyn. [38] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit., p. 19;

“Planning Policy in the West Bank,” B’Tselem/The Israeli Information Center for Human Rights in the Occupied Territories, Nov. 2017, https://tinyurl.com/yapa6dup. [39] “Planning Policy in the West Bank,” ibid. [40] Dov Lieber, “UN: Israel ‘Systematically’ Emptying Area C of Palestinians,” The Times of Israel, July 28, 2016, https://tinyurl.com/y9grfk4s. [41] Ibid. [42] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit., p. 6. [43] Ibid. [44] “Palestinian Economic Bulletin,” The Portland Trust, December 2017, http://tinyurl.com/ya5cwx5n. [45] Diana B. Greenwald, “Who is Responsible for Solving Gaza’s Massive Electricity Crisis?” The Washington Post, Feb. 5, 2018, https://tinyurl.com/ya8woump. [46] “Palestinian Economic Bulletin,” op. cit., p. 2. [47] Ibid. [48] ”West Bank and Gaza Report to the Ad Hoc Liaison Committee,” op. cit., p. 20; “Cabinet approves record $5b budget for 2018; $5.8b in case of unification with Gaza,” Palestinian News & Information Agency, Feb. 27, 2018, http://tinyurl.com/yd7x6rr7. [49] Nick Wadhams, “US Withholding Added $45 million in Palestinian Aid, Sources Say,” Bloomberg, Jan. 18, 2018, https://tinyurl.com/ybxehwuf. [50] Patricia Zengerle, “House passes measure to limit aid to Palestinians over ‘martyr payments,’ ” Reuters, Dec. 5, 2017, https://tinyurl.com/y9augr5m. [51] “Drop in Foreign Funding to Force Cuts in Palestinians’ Budget,” Voice of America, Jan. 3, 2017, https://tinyurl.com/y7uv82jm. [52] ”West Bank and Gaza Report to the Ad Hoc Liaison Committee,” op. cit., p. 13; Fares Akram and Mohammed Daraghmeh, “Palestinian Government Slashes Salaries for Gaza Employees,” Associated Press/U.S. News & World Report,” April 5, 2017, http://tinyurl.com/y72dqs65. [53] West Bank and Gaza Report to the Ad Hoc Liaison Committee,” ibid., p.10. [54] Jack Khoury, “Fatah, Hamas Are at an Impasse,” Haaretz, Jan. 3, 2018, https://tinyurl.com/ybjpul2b. [55] “Economic Monitoring Report to the Ad Hoc Liaison Committee,” op. cit., p. 24. [56] “West Bank and Gaza Report to the Ad Hoc Liaison Committee,” op. cit., p. 13. [57] “Doing Business 2018 Reforming to Create Jobs,” The World Bank, 2018, p. 4, https://tinyurl.com/yaon9u4j; “Doing Business/Economy Rankings,” The World Bank, http://tinyurl.com/32n47we. [58] Yadin Kaufmann, “Start-Up Palestine, How to Spark a West Bank Tech Boom,” Foreign Affairs, July/August 2017, https://tinyurl.com/y8sr2l7q. [59] Luke Baker and Tova Cohen, “In West Bank, a venture capital fund hunts Palestinian tech returns,” Reuters, March 31, 2017, https://tinyurl.com/yc6yloj4; Judy Maltz, “In rare public appeal, Palestinians woo Israeli high tech firms,” Haaretz, July 13, 2017, https://tinyurl.com/y7p6egjx. [60] “IT in the West Bank Palestinian Connection,” The Economist, Feb. 26, 2014, https://tinyurl.com/yaq2dxx4. [61] Baker and Cohen, op. cit. [62] ”West Bank and Gaza Report to the Ad Hoc Liaison Committee,” op. cit., pp. 11-12.

Page 13 of 13 The Palestinian Economy SAGE Business Researcher