Transcript Israel’s Unilateral Withdrawal And its Economic impacts

Israel’s Unilateral
Disengagement plan
And its General Economic
impacts
By Hazem H. Kawasmi
Consultant – GTZ/MNE
Passia – 31 July 2004
Today’s Presentation
• Is a General overview of the upcoming
scenarios as a result of the planned
disengagement.
• Does not give an empirical analysis or
academic research.
• Is not about politics although politics and
economics are strongly interrelated.
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Economic Issues
• Free movement of people
• Free movement of goods (Export & Import)
• Industrial Zones & Investment
• Employment (mobility and generation)
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MAS Economic Monitor Issue No. 10- 2003
Economic Indicators in the West Bank and Gaza Strip
Indicator
Population in WBGS (end of -year)
Population Growth (%)
1999
3,084880
2000
3,224504
2001
3,381751
2002
3,549523
20031
3,721543
4.18
4.27
4.7
5.0
n.a
671.65
695.15
682
707.5
745
Local Employment (1000 workers) –
yearly average workers) – yearly
average
456.70
479.24
439
435
n.a
Public Employment (%)
18.40
20.08
23.4
23.6
n.a
Employment in Israel (1000
workers) – yearly average
134.40
115.94
69
50.3
49
Employment in Israel as Percentage
of Total Employment (%)
22.75
18.84
13.6
10.3
Labor Force (1000 workers) – yearly
9.5
MAS Economic Monitor Issue No. 10- 2003
Economic Indicators in the West Bank and Gaza Strip
Unemployment (%) – yearly
average
11.8
14.5
25.5
31.3
30.4
5,095.0
4,939.4
4236.3
n.a
n.a
Inflation Rate (%)
5.54
2.80
1.23
5.7
4
Poverty Rate (% of
population)
21
32
44
60
n.a
Hotel Room Occupancy
Rate (%)
35.5
34.2
8.2
10.1
9.6
Commodity Exports
(million $)*
615
435.6
314
n.a
n.a
Commodity Imports
(million $)*
2759
2382
1800
n.a
n.a
Donors’ Assistance (million
$)2
523.9
369.3
929
1,051
n.a
GDP (million $, constant
prices)
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Best scenario
• If disengagement is implemented with wisdom
and foresight, however, it could make a real
difference”.
• As for the settlement assets that Israel will leave
behind, those in Gaza have considerable
economic value, and in time can make a
significant contribution
World Bank report.
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Best Scenario
• “Donor assistance levels today average almost US$1
billion each year”.
• “an additional US$500 million each year could help the
Palestinian economy turn the corner”.
• “Additional aid in today’s economy would help alleviate
day-to-day hardship, but would have little lasting impact”.
• “could reduce unemployment to levels only slightly
higher than prior to the intifada”
World Bank study.
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Prerequisite for
Economic Development
Political Stability
“The process of evacuation is planned to be
completed by the end of 2005”.
Israel disengagement plan.
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The Key Question?
• Does Disengagement Plan bring stability
to Gaza Strip and West Bank
• The answer is NO
• NOT to Gaza Strip
• Not to the West Bank Definitely
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Disengagement Plan? General
•
•
•
•
•
Israel will keep control on air, sea and land
Israel controls borders crossings
No airport
No seaport
No investment (Israeli and others), thus no
job creation.
• No labor movement to Israel eventually
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Israel Disengagement Plan?
• “Israel has come to the conclusion that there is
currently no reliable Palestinian partner”.
• In Gaza Strip, the Israeli army can enter into
Gaza anytime they like, for any reason and
justification; “both preventive and reactive”.
• “it is clear that in the West Bank, there are areas
which will be part of the State of Israel,
including cities, towns and villages, security
areas and installations, and other places of
special interest to Israel”.
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Israel Disengagement Plan?
• “will serve to dispel claims regarding Israel's
responsibility for the Palestinians in the Gaza
Strip” ..“As a result, there will be no basis for
claiming that the Gaza Strip is occupied territory”
• “Israel will evacuate an Area in the Northern
Samaria Area including 4 villages and all military
installations, and will redeploy outside the
vacated area”.
• “Israel will continue to build the security fence”.
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Israel Disengagement Plan?
• “Israel will enable the continued supply of
electricity, water, gas and petrol to the
Palestinians, in accordance with current
arrangements. Other existing
arrangements, such as those relating to
water and the electro-magnetic sphere
shall remain in force”.
• “there shall no longer be any permanent
presence”
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What will rule
the economic relations
Paris Protocol:
– only reference agreement
– Not implemented properly
– Semi-customs union
• Unilateral actions by the Israeli government.
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Movement of Goods
1. Restrictions might be removed in Gaza Strip.
2. Restrictions will Stay in the West Bank.
3. Restrictions will not be removed between Gaza
Strip and the West Bank.
4. Restrictions will stay between Gaza Strip and
Egypt.
5. Restrictions will stay between the West Bank
and Jordan.
6. No major changes are expected.
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Movement of Goods
• Trade will continue to be based on BackTo-Back arrangements. This is very bad to
trade
– between West Bank and Gaza Strip
– Between West Bank and Jordan
– Between Gaza Strip and Egypt.
– Between Gaza Strip and Israel
– Between West Bank and Israel
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World Bank study:
“The Disengagement Plan
does not incorporate a change
in border trade regimes”.
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Movement of People
• Movement between the Gaza Strip and
the West Bank will be dependant on Israeli
Authorities.
• Movement between Gaza Strip and Egypt
will stay in Israeli control.
• Movement between West Bank and
Jordan will stay in Israeli control.
More dependency on VIP cards
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Industrial Zones
• International investment will not take place
without stability in place.
• Israelis are not expected to invest in the
Gaza Strip. They evacuated Erez already.
• Thus international investors are
discouraged even more.
• No international guarantees on investment
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Unemployment is a big threat
• Erez already closed, Thus about 4,000
jobs eliminated
• 39,000 jobs every year need to be created
• More jobs lost with economic deterioration
• Lost of jobs that could have been created
by investment.
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Palestinian difficult situation
• The Palestinian recession is among the
worst in modern history.
• Average personal incomes have declined
by more than a third since September
2000
• Nearly a half of Palestinians now live
below the poverty line
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Disengagement will remove internal
movement restrictions in Gaza and in part
of the northern West Bank, but Palestinian
economic recovery depends on:
• A radical easing of internal closures throughout
the West Bank,
• the opening of Palestinian external borders to
commodity trade, and
• sustaining a reasonable flow of Palestinian labor
into Israel.
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Conclusion
• “The Palestinian economy is in deep crisis.
Disengagement alone will not alter this dangerous,
unsustainable situation.
• “Israel’s Disengagement Plan of June 6 will have very
little impact on the Palestinian economy and Palestinian
livelihoods, since it only proposes a limited easing of
closure”.
• “Indeed, were it accompanied by the sealing of Gaza’s
borders to labor and trade or by terminating supplies of
water and electricity to Gaza, disengagement would
create worse hardship than is seen today”.
•
world Bank study
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Conclusion
• By producing unilateral political and
economic arrangements
Israel plans to prepare the
Palestinian people for a long
occupation to come.
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Main points discussed
• The use of industrial Estates as a sustainable solution for economic
development.
• Palestinians are not sure what amounts the donor community would
pour in the Palestinian market in case there was coordinated efforts
for the disengagement process. (talks varied between 0.5 -10 Million
USD)
• Some doubted the probability of enforcing Paris Protocol throughout
the coming short-term period, until Permanent Status solution is
reached.
• The conclusion was to prepare for the worst case, and therefore we
need economic policies that will support the Palestinians’
steadfastness and survival under continued difficult times and
occupation.
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