Coping, Adapting and Resisting: A Critical Analysis of Risk Management during Armed Conflicts Silvia Jarauta Bernal University of Alicante Faculty of Economics and Business Administration Department of Applied Economic Analysis Coping, Adapting and Resisting: A Critical Análisis of Risk Management during Armed Conflicts PhD. Thesis Silvia Jarauta Bernal Supervisor: Dr. Moisés Hidalgo Moratal 2 2009 Acknowledgments This study would not have been possible without the support of all the people that have helped me during these years of research. First of all, I would like to express my deepest gratitude to all the people in the Occupied Palestinian Territories (oPt) who encouraged this research and helped me to understand the complex realities of the conflict. Particularly, I would like to thank Fadi Hadeeb, the translator, Jawad Saleh from the Palestinian Centre Bureau of Statistics (PCBS), Francine Pickup from the United Nations Office for Coordination of Humanitarian Affairs, Rana Hanoun from the Ministry of Planning, Silvia Asensio from Paz y Tercer Mundo, Veronique Stalmans from the office of the European Union in Jerusalem and the people who provided me with the information and data to anchor the theoretical debate on risk management to the facts on the ground. Next, I would like to thank my parents, who have provided me with two of the most essential aspects to carry out this investigation: passion for learning and a solid commitment to engaging with the collective. Without them, these years of studying would have been superficial. Then, I would like to thank Dr. Moisés Hidalgo for his supervision and for unconditionally believing in my research. He analysed my research arguments and transmitted the confidence to me to think freely. From the University of Alicante, I also would like acknowledge the generous help of Dr. Alfonsa Denia, who despite being an econometrician had no doubts about guiding me in descriptive analysis. I am also thankful to MICROCON for its financial support and primarily to the director of this research programme, Patricia Justino for motivating this investigation in the early stages. Also from the Institute of Development Studies, where I spent several months collecting literature and discussing the research with fellows and friends, I would like to thank, Robin 3 Luckham, Marzia Fontana, Lizbeth Navas-Navarro, Steven Devereux, Angela Dowman, Collete Harris, Zander Navarro, and all the team in the Library. Last, but of course not least, this work would not have been achieved without the support and understanding of my companion David, my brother Pablo, and my friends Loles, Yeyo, Elena and Juan, who have listened to my worries and helped me to find the way to keep going. And to Erica, Sofia, Ana and Silvia, who shared with me their views on the Palestinian-Israeli conflict and particularly on what should be the development policy framework. Finally, I would like to thank Ana Julieta, my dearest friend, who despite the distance, always stayed close, reminding me of the reasons why I decided to embark in this investigation. This whole thesis could not have looked like it is without the help of Paddy Mahony, who not only proof-read the entire dissertation, but also provided many stylistic suggestions and substantive challenges to help me clarify my arguments. 4 TABLE OF CONTENTS INTRODUCTION 7 CHAPTER 1: THE ISRAELI OCCUPATION OF THE PALESTINIAN TERRITORIES 20 1.1 The Dimensions of the Conflict 20 1.2 The Israeli Occupation of the Palestinian Territories 24 1.2.1 The Israeli Occupation during 2000-2004 29 1.2.2 The Impact of the Israeli Occupation on the Palestinians 42 CHAPTER 2: RISK MANAGEMENT IN CONFLICT-AFFECTED HOUSEHOLDS 49 2.1 Introduction 49 2.2 Risk Management Theory 52 2.2.1 The Strategies 54 2.2.2 The Determinants of Risk Management 61 2.2.2.1 Market- and Household-related Determinants of Risk Management 64 2.2.2.2 The Risk-related Determinants of Risk Management 77 2.3 Understanding Armed Conflict and Conflict-produced Shocks 91 2.3.1 Causes of Armed Conflicts 95 2.3.2 The Socio-economic Costs of Conflicts 99 2.3.3 The Source-related Characteristics of Armed Conflicts 106 2.4. Risk Management in Conflict-affected Households 113 2.4.1 Household Strategies to Conflict-produced Shocks 114 2.4.2 Risk-related Determinants of Risk Management Strategies 123 2.4.3 Everyday Forms of Resistance 143 2.5 Conclusions 152 5 CHAPTER 3: METHODS OF RESEARCH 158 3.1. Non-formal Collaborative Research 158 3.1.1. The Identification Phase 159 3.1.2 The Engagement Phase 161 3.2 Primary Data 164 3.3 Secondary Data 165 CHAPTER 4: DATA AND ANALYSIS 182 4.1 Palestinian Expenditure and Consumption Survey in 2004 183 4.1.1 Description of the Survey 184 4.1.2 Descriptive Analysis of PECS 186 4.2 Conflict Data 198 4.2.1 The Conflict Data Set 198 4.2.2 Understanding the Occupation Instruments 211 4.2.2.1 Descriptive Analysis of Conflict across Time and Space 211 4.2.2.2 Correlation Analysis between Israeli Occupation Instruments 217 4.3 Palestinian Responses to the Crisis: PECS and Beyond 222 4.3.1 Households Responses to Conflict-produced Shocks 222 4.3.2 The Risk Management Distribution in PECS 2004 228 4.4 Conflict Correlates of Risk Management 236 4.4.1 Conflict Correlates of Income Smoothing Strategies 237 4.4.2 Conflict Correlates of Risk-sharing Strategies 254 CONCLUSIONS: FINDINGS AND IMPLICATIONS 267 BIBLIOGRAPHY 288 APPENDICES 305 SPANISH SUMMARY 359 6 ACRONYMS AND ABBREVIATIONS ACSUR Asociación para la Cooperación con el Sur. AECID Agencia Española de Cooperación Internacional para el Desarrollo. AFF Obtained assistance from Family and Friends. AHLS Adjusting Household Labour Supply. ACH Acción contra el Hambre. AIC Alternative Information Centre. ANOVA Analysis of Variance. B’Tselem Israeli Information Centre for Human Rights. CE Complex Emergencies. EU European Union. FAO United Nations Food and Agriculture Organization. FSA Food Security Assessment. GDP Gross Domestic Product. GNP Gross National Product. HDIP Health Development Information Project. HEPG Humanitarian Emergency Policy Group. ICHAD Israeli Committee against House Demolitions ICJ International Court of Justice. ICRC International Committee of the Red Cross. IDF Israel Defence Forces. ILO International Labour Organization. IPC Israeli Policy of Closure. IPYL International Palestinian Youth League. IUED Institute Univesitaire d’études du Développement. JPS Journal of Palestinian Studies. LCT Life-cycle theory. LFS Palestinian Labour Force Survey. NGO Non-governmental Organization. NIS Israeli New Shekel. OCHA United Nations Office for the Coordination of the Humanitarian Affairs. ODI Overseas Development Institute. oPt Occupied Palestinian Territories. PNA Palestinian National Authority. PASSIA Academic Society for the Study of International Affairs. PCBS Palestinian Centre Bureau of Statistics. PECS Palestinian Expenditure and Consumption Survey PIH Permanent Income Theory. PRCS Palestinian Red Crescent Society. PTM Paz y Tercer Mundo. RUF Revolutionary United Front of Sierra Leone. SI Solidaridad Internacional. UN United Nations. UNCTAD United Nations Conference for Trade and Development. UNDP United Nations Development Programme. UNSCO United Nations Special Coordinator Office for the Middle East. UNWRA United Nations Relief and Works Agency for Palestinian Refugees in the Near East. USAID United States Agency for International Development. VCI Village Closure Index. WFP World Food Programme. 7 INTRODUCTION The objective of this research is to contribute to the understanding of risk management in the context of armed conflicts, i.e. to help understand how people deal with the anticipated and actual losses associated with the uncertain events and outcomes produced by socio- political risk events such as armed conflicts. This is an infant area of research and the investigation aims to participate in the emerging debate by providing a conceptual framework for the analysis of risk management of conflict-affected households. This investigation relies in a great extent on analyses framed in the Israeli-Palestinian conflict. Out of the many different dimensions of the conflict1, this research is interested in the Israeli occupation of the Palestinian Territories2. Given the different realities of the three territories comprising the Occupied Palestinian Territories (oPt) – the Gaza Strip, the West Bank and Jerusalem – this research focuses solely on the West Bank. The period of analysis refers to 2000-2004, the years immediately following the onset of the Al-Aqsa Intifada in September 2000, the largest sustained Palestinian uprising against Israeli occupation. This crisis was characterised by the redeployment of the Israeli Defence Forces (IDF) in the West Bank, the tightening up of the Israeli Policy of Closure and the construction of the Wall3. During this period in the West Bank, the real Gross Domestic Product (GDP) suffered a decrease of 38%, unemployment increased 10%, reaching an unprecedented 40% in 2002; the 1 As it is argued by many authors, the Israeli-Palestinian conflict is composed of four main aspects; the refugee issue, the situation of the Palestinians of Israel, the status of the city of Jerusalem and the Israeli occupation of the Palestinian Territories (Escudero, 2006; Al-Haq, 2005; Pappe, 1997). 2 As Article 42 of The Hague Regulations stipulates: a ‘territory is considered occupied when it is actually placed under the authority of the hostile army’, and that the occupation extends ‘to the territory when such authority has been established and can be exercised’ (Regulations Annexed to the Fourth Hague Convention Respecting the Laws and Customs of War on Land, 1907). Furthermore, the Tribunal of the Nuremberg Trials detailed, in the Hostage Case, that a territory is occupied even when the occupying forces have partially evacuated certain parts of the territory or lost control over the population, as long as it could at any point in time re-assume physical control of that territory (Case number 7, Nuremberg Proceedings, May 10, 1947).