Israeli Occupation Cost Palestine $48b Between 2000-2017: UN

Israel's illegal occupation of Palestine has cost the economy US$47,7 billion between 2000-2017, or three times the size of the Palestinian economy in 2017, a United Nations report said Monday.

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The United Nations Conference on Trade and Development report, titled ‘Economic cost of the Israeli occupation for the Palestinian people: Fiscal aspects’, estimated a total fiscal loss of more than US$2.5 billion a year for the past two decades due to the blockade and illegal occupation. 

"This estimated cumulative fiscal cost of occupation by Israel would not only have eliminated the Palestinian budget deficit estimated at 17.7 billion U.S. dollars during the same period. It would have also generated a surplus nearly twice the size of the deficit," Unctad Economist Mutasim Elagraa announced at a news conference in Geneva.

The report attributes the fiscal losses to the measures imposed by the Israeli occupation, which include, among others: restrictions on the free movement of the Palestinian people and goods; control by Israel of Area “C” in the West Bank and all border crossing points; denying the Palestinian people their right to freely utilize their land, natural and human resources; and depriving the Palestinian government of meaningful control over its fiscal resources.

The total figure includes US$28.2 billion in estimated accrued interest and US$6.6 billion of leaked Palestinian fiscal revenues to Israel, and the amount continues to rise. 

Although the final amount for all losses is likely much higher as they only measure the direct fiscal impact, Senior Researcher at the Palestine Economic Policy Research Institute (MAS) Misyef Jameel, who worked on the report, told AFP news agency.

The document recommends that stopping the fiscal cost of occupation would entail a fundamental change in many working arrangements especially the Paris Protocol. The agreement was signed between the Palestinian Liberation Organization and Israel in 1994, which sealed Palestinian economic dependency, giving Israel full control over external borders and the collection of import and value-added taxes.

The U.N. body also argues that if the money had been invested sensibly in the impoverished Palestinian economy, it would have created an extra two million jobs over the 18-year period, or 110,000 a year.

According to the Palestinian Central Bureau of Statistics, unemployment in Palestine increased in 2018 to reach about 31 percent of the labor force compared with about 28 percent in 2017. The West Bank registered 18 percent while the number was much higher in Gaza with 52 percent of the population without a job. 

The financial crisis in Palestine was aggravated in 2019, mainly due to the freezing of revenue by Israel and the ending of international aid. In 2018, the Trump administration ended approximately US$230 million in development funding to the Palestinian people and another US$360 million in funding to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (Unrwa).

In January 2019, the World Food Programme also cut food aid to about 190,000 Palestinians due to a shortage of funds. “The suspension of aid to our people, which included critical sectors such as health and education, will have a negative impact on all, create a negative atmosphere, and increase instability,” Nabil Abu Rudeineh, a spokesman for Palestinian President Mahmoud Abbas, said back on Feb. 1.

Yet all aggravated in February, as Israel’s security cabinet approved the freezing of US$140 million for the fiscal year in tax transfers over the Palestinian Authority’s payments to Palestinians jailed by Israel. This meant the withholding of about six percent of the tax revenue levied on goods it collects on behalf of the PA.