Palestinian Industrial Trade Zones and the Occupation

The Al Jalama Industrial Zone in Jenin - a means for further occupation?

Sam Bahour has a great essay at the Middle East Report Online concerning the development, encouraged by the US, funded by international donors and called for by the PA, of industrial free trade zones throughout Palestine in an attempt to create jobs and improve the stumbling Palestinian economy (although the Palestinian economy grew at a healthy rate last year, 8-9%, it was entirely donor based and unsustainable).  Bahour correctly identifies these zones as a quick-fix way to create jobs by further increasing Palestinian dependence on Israel while undermining the possibility for future Palestinian economic development.  As currently designed, these zones would create hundreds of thousands of menial Palestinian jobs that rely on good relations with the occupying Israeli state while concurrently representing a refusal to invest in more appropriate and longterm economic opportunities.

Bahour lists five industrial zones in Palestine:

1) The al-Jalama zone, in the north near Jenin, led by Germany with the support of Turkey

2) The Bethlehem zone led by France and the Jericho Agricultural Park in the Jordan Valley, led by Japan

3) The Tarqoumiyya Industrial Estate, in the south near Hebron, spearheaded by the World Bank and Turkey

4) The Erez Industrial Zone along the Gaza-Israel border was abandoned by Israel and is no longer operational

5) The Gaza Industrial Estate (which Israel calls the Karni Industrial Zone), a Palestinian-developed zone southeast of Gaza City, came to a standstill in 2007.

[tweetmeme] Without many natural resources, Palestine needs to focus its economic efforts on what little it does possess (namely, tourism, agriculture) while investing in opportunities for Palestine’s large college educated population.  The creation of these zones undermine each of these economic necessities.  By consuming large tracts of land, the zones are limiting the agricultural potential of Palestinians (there is currently a dispute in Jenin as farmers are refusing to sell their properties) and completely ignores the importance of agriculture to the Palestinian state (a sector that is also currently dominated by subsidized products from illegal Israeli settlements in the Jordan Valley).  Furthermore, creating thousands of jobs is hardly unworthy, but the Palestinian people are not looking for menial low-paying jobs.

With more and more Palestinians attending university, the lack of high-end jobs is suffocating the recent graduates, leading to a high rate of unemployment among college graduates and a waste of massive potential.  Indeed, the select few Palestinians from Jordan Valley villages who are able to attend college often return to work in settlement farms due to the dearth of suitable employment opportunities.*  As Bahour suggests, a much more sustainable and independent way to invest in Palestine’s economy would be to establish high-tech areas near universities:

Building high-tech zones in the vicinity of university campuses would be a strategic starting point. Better yet, bringing such investments into the universities themselves, which are in dire need of modernization and sustainable development, would have a more lasting impact and be  a better deterrent of political turmoil.

Unfortunately, the industrial zone concept is part of Prime Minister Salam Fayyad’s governmental program entitled “Homestretch to Freedom” and is fully supported by the United States.  Yet, by undermining the potential of Palestinian tourism and agriculture as well as its growing educated population, the industrial zones are simply a means of normalizing and deepening the Israeli occupation.  In addition to providing menial jobs to Palestinians – thus providing a disincentive for further education – the industrial zones will be entirely dependent on Israeli good will and will, in effect, be controlled by the Israelis.  Moreover, consultants predict that 30% of businesses outside the zones will refocus to serve the businesses within the zone, creating a near monopoly of employment dependent on Israel.

Before the Second Intifada, a large portion of the Palestinian workforce served the Israeli economy within the ’48 borders.  The dependence on Israel was exemplified as the borders were largely closed to Palestinians during the Intifada.  While ostensibly using economics to serve as a basis for peace – remind anyone of Netanyahu’s hollow call for  ‘economic peace?’ – while providing jobs, over reliance on these zones will only enforce Israeli control on the Palestinian economy.  From Bahour:

In a nutshell, one can see a continuation of Israel’s scheme to reengineer the Palestinian economy away from its agricultural and tourism bases toward an economy that is dependent on Israeli public services and good will.

Indeed, much like the Palestinians who worked in Israel before the Intifada, those employed at and around these industrial zones will be dependent on Israel.  Thus, though the zones will decrease unemployment, they do little to increase the independence of the Palestinian economy (from Israel and donors) as the World Bank and IMF both recently recommended and are unfortunately aimed at jobs and sectors that are not sustainable or make use of the comparative advantages that Palestine possesses.

*See the continuing series of articles on the Education in the Jordan Valley; the first two posts cover the damage of Area C and Demolitions.  In a personal interview with the principal of the Zubeidat school in the village of the same name, I was told that many college graduates are unable to find work in their fields and must resort to employment in settlements, earning less that 1/3 of minimum wage.

Photo from POICA

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