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Palestine: World Bank exposes PLO's disastrous miscalculations

By David Singer - posted Tuesday, 15 October 2013


The failure by the PLO to accept two offers made by Israel in 2000/1 and 2008 ceding Israel's claims in more than 90% of the West Bank have been political and economic catastrophes for West Bank Arabs - as substantiated by a World Bank Report published this week titled "West Bank and Gaza , Area C and the Future of the Palestinian Economy".

Whilst Israel and the PLO are once again engaged in negotiations behind closed doors for the next eight months, any prospect for their successful conclusion seems destined to founder for the same reasons that led to the collapse of the negotiations in 2000/2001 and 2008 namely:

  1. The PLO refusal to recognise Israel as the national home of the Jewish people
  2. The PLO insistence that any Palestinian State not be demilitarised
  3. The PLO rejection of the right of Jews to live in the West Bank under any circumstances
  4. The PLO objection to abandoning the claimed right for millions of Palestinian Arabs to emigrate and settle in Israel.
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The World Bank Report has highlighted the following disastrous economic outcomes suffered by the West Bank Arab population, because the PLO failed to grab those two political lifelines thrown to it by Israel:

  1. Private investment has averaged a mere 15 percent of GDP over the past seven years, compared with rates of over 25 percent in vigorous middle income countries.
  2. The manufacturing sector, usually a key driver of export-led growth, has stagnated since 1994, its share in GDP falling from 19 percent to 10 percent by 2011.
  3. Manufacturing been not been replaced by high value-added service exports like Information Technology (IT) or tourism, as might have been expected.
  4. Much of the meager investment has been channeled into internal trade and real estate development, neither of which generates significant employment.

Consequently, unemployment rates have remained very high in the Palestinian territories and are currently about 22 percent - with almost a quarter of the workforce employed by the Palestinian Authority - an unhealthy proportion that reflects the lack of dynamism in the private sector.

The World Bank has concluded:

Whilst the unsettled political environment and internal Palestinian political divisions have contributed to investor aversion to the Palestinian territories, Israeli restrictions on trade, movement and access have been seen as the dominant deterrent.

Accepting the Report's conclusion - the fastest way to end these Israeli restrictions would be a signed peace treaty between the PLO and Israel.

In Area C - 61% of the West Bank where Israel exercises complete administrative and security control under the Oslo Accords - the World Bank report states:

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 Area C is particularly important because it is either off limits for Palestinian economic activity, or only accessible with considerable difficulty and often at prohibitive cost. Since Area C is where the majority of the West Bank's natural resources lie, the impact of these restrictions on the Palestinian economy has been considerable. Thus, the key to Palestinian prosperity continues to lie in the removal of these restrictions with due regard for Israel's security.

Realistically these restrictions in Area C are not going to disappear until the signing of a peace treaty that guarantees Israel's security.

Yet the PLO stubbornly maintains its intransigent and rejectionist demands - whilst simultaneously encouraging economic, divestment and sanctions boycotts and public relations campaigns undertaken with funds supplied by foreign Governments and wealthy private foundations - designed to denigrate and delegitimise Israel and erode Israel's legal rights negotiated under the Oslo Accords with the PLO.

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About the Author

David Singer is an Australian Lawyer, a Foundation Member of the International Analyst Network and Convenor of Jordan is Palestine International - an organisation calling for sovereignty of the West Bank and Gaza to be allocated between Israel and Jordan as the two successor States to the Mandate for Palestine. Previous articles written by him can be found at www.jordanispalestine.blogspot.com.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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