[Marxism] The Lynchpin to Sharon's Strategy Gaza's Economy

Mike Friedman mikedf at amnh.org
Sat Aug 20 16:42:08 MDT 2005

Weekend Edition
August 20 / 21, 2005
The Lynchpin to Sharon's Strategy
Gaza's Economy



All eyes are on Gaza. What the late Labor Minister Yisrael Galili in 1971 
termed a great experiment in "Zionist socialism" is coming to an end with 
the evacuation of some 8000 Israeli settlers and their supporters from the 
occupied Gaza Strip. News channels, Arabian based ones, are transfixed in 
what seems to be a tumultuous struggle between Israel's fundamentalist 
right-wing and Prime Minister Ariel Sharon's apparent pragmatic plan. 
Others instead argue that the real struggle is only going to emerge later 
when it remains to be seen if the Palestinian Authority (PA) can maintain 
control over its newly liberated areas in the most desolate and desperate 
corner of the Palestinian Territories. The reality, however, is that Sharon 
has already won, regardless of the outcome.

When Ariel Sharon announced his "Disengagement Plan" in early 2004 he 
stunned not only Israeli society but also the world community as well. The 
"Father of the Settlements" who had so shied away from peace negotiations 
during the first four years of the Intifada was now making a bold 
unilateral move. The term for "disengagement" in Hebrew, Hitnatkut, also 
can mean "cutting off," and with his plan to dismantle the settlements in 
the Gaza Strip and redeploy the Israeli army to its borders, Sharon is in 
fact cutting off the Palestinians from the peace process. As Jerusalem 
based reporters Jerrold Kessel and Pierre Klochendler put it, Sharon's 
method relies on "managing the conflict with the Palestinians much more 
than it is about actually resolving the conflict."


Gaza's vitality was almost completely squelched during the four and a half 
years of the Al-Aqsa Intifada, where poverty and unemployment soared while 
the Israeli army claimed the lives of thousands and engaged untold physical 
destruction. In urban environments where already almost half of the 
population are refugees, a further 25,000 homes were either totally or 
partially destroyed by Israeli operations. Furthermore, Israel's repeated 
internal and external closures devastated the economy, pushing poverty past 
65% and unemployment to over 35% (unofficially as high as 70%). Finally, 
The World Bank asserted that while the ceasefire and end to closures are 
clearly beneficial to Gaza's recovery, the outlook for some 16% of 
Palestinians living at mere subsistence levels is not likely to change.


Israel's border policies are key, not just to investor confidence, but to 
the very sustenance of the Palestinian Territories. Currently, Israel has 
agreed to revamp the Erez and Karni crossings into Israel, promising new 
high-tech security checks that should expedite cargo transit (paid for by 
USAID). This is a first step, but not enough to win the full confidence of 
those who may wish to do business in Gaza. The World Bank has urged Israel 
to duplicate these facilities so that should a security incident warrant 
the closure of one crossing, goods can still quickly make their way though. 
In addition, anyone operating in these situations would expect proper 
arbitration and dispute resolution mechanisms if, say, produce spoiled 
because of delays. Israel so far has not agreed to establish these with the 
Palestinian Authority.

Furthermore, the 'back-to-back' system of transportation that Israel has 
forced the Palestinians to operate with only exacerbate costs and time. 
While the disengagement in Gaza will eliminate the need to transfer goods 
between vehicles at checkpoints internally, this duplicitous system will 
remain at the borders: vehicles from Gaza cannot enter Israel or the West 
Bank and vice versa. Without a further opening of Gaza's borders, few 
investors would find it sensible to do business in Gaza. As Akiva Eldar 
summarized in a recent editorial, "a Palestinian worker who is detained 
three hours at the barricade cannot compete with a Thai worker who lives in 
his boss' storage room."

In addition to a loosening of controls over Gaza's borders, it is also 
imperative that Israel consents to the re-opening of Gaza's air and 
seaports. The reopening of Gaza's airport, which was heavily damaged by the 
IDF in the recent conflict, has not progressed, and Israel has hinted that 
it will only allow helicopter traffic in the near future, impairing the 
potential for business contacts from neighboring countries to have easy access.

A final major point of contention is Israel's announced intention of 
abrogating the "quasi"customs agreement with the Palestinians in the Gaza 
strip. The Palestinian Authority has rejected this, noting that it would 
not only be damaging to economic prospects in the immediate future, but 
would also further alienate the Gaza Strip from the West Bank and East 
Jerusalem. The present arrangement gives Palestinian goods an edge in 
Israeli markets while generating critical tax revenue for the PA. The World 
Bank has warned that while the current customs agreement should not remain 
in place for long, it is essential to Gaza in the short term for getting 
its agricultural and industrial economy back on its feet and ending the 
union at this point would greatly increase transaction costs for Gaza-West 
Bank commerce.

Dr. Aharon Kleiman of Tel Aviv University further stressed that an 
abrogation of the quasi-customs union with has the potential to turn a 
future Palestinian nation into a bifurcated state. The creation of two 
entities with separate economic arrangements could fracture Palestinian 
unity. This would be a severe blow to Palestinian nationalism and further 
push Gaza into Egypt's economic orbit while the West Bank would likely 
orient itself more towards Jordan.


Benjamin Granby works for the Palestine Monitor in Ramallah, West Bank, is 
a former human rights worker in Gaza City and is author of the forthcoming, 
Welcome to the Bethlehem Star Hotel from Garrett County Press. He can be 
reached at: sarin at devo.com 

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