Ha'aretz
Published 02:03 26.11.10
Economic prison zones
The notion that political differences can be solved through job creation is fundamentally flawed and will not change the reality that our economy is micromanaged by a foreign military.
By Sam Bahour
When a project mixes the feel-good concepts of jobs, economic development and Israeli-Palestinian cooperation, how can anyone complain? These are some of the things the international community has been promising to deliver through the construction of industrial free-trade zones in the occupied Palestinian territory. The project's proponents expect the zones to constitute the economic foundation for a future Palestinian state.
These mega-employment projects present a serious challenge to those who are striving to build an independent and viable economic foundation for a future Palestinian state. Because the zones will be dependent on Israeli cooperation to function, and because they will exist within an Israeli-designed economic system that ensures Palestinian dependence on Israel, they cannot form the basis of a sovereign economy. Relying on them will perpetuate the status quo of dependency and risks further entrenching Israel's occupation, albeit possibly under another name, like statehood.
The working assumption is that these zones will be open to any Palestinian or international company wanting to establish a business within them. Although the sectorial theme of each zone, assuming it has already been decided, has not been made public, if existing zones (such as the maquiladoras in Mexico, or those in Jamaica ) are any indication, the zones in Palestine will host "dirty" businesses - those that are pollution-prone and sweatshop-oriented. Jordan's Qualified Industrial Zones provide a regional example. Like many others around the world, they are notorious for their exploitative labor practices.
According to two consultants to the Israeli government, the West Bank zones, several of which are already under construction, are planned to employ 150,000- 200,000 Palestinians, nearly the same number that used to travel daily to Israel for work before the second intifada. Studies from the Peres Center for Peace project even higher numbers, estimating that 500,000 Palestinian workers may be employed in joint industrial zones by 2025. Israeli expectations do not stop there. The consultants also predicted that 30 percent of Palestinian businesses outside the zones will refocus their businesses to serve those enterprises located inside them.
The entire undertaking fits well with Israel's policy of separation - a policy that enables Israel to box in the Palestinians while maintaining control of their movements and economic viability.
As long as Israel controls access and resources in the West Bank and Gaza, the zones' operation will remain precarious, perpetually at the mercy of positive relations between Israel and Palestine. The water and electricity capacity of these zones will be totally controlled by Israel. Most important, Israel will maintain full control of the movement of goods and people between the zones and the outside world. By incorporating Israel's infrastructure of control into the plans, these projects would serve to normalize an illegal occupation as long as the state of occupation persists, and continue to do so even after it has nominally ended, not to mention undermine Palestinian political aspirations.
The privileged status of the zones also raises ethical concerns. While Israeli restrictions will be eased in order to ensure smooth functioning for foreign investors, indigenous industries outside the zones will continue to face the same hurdles that have hindered Palestinian industry for decades. Thus, existing businesses will be placed at a comparative disadvantage.
Donor funds, foreign direct investments and Palestinian efforts would be better placed if they targeted Palestine's natural economic comparative advantages - for example, tourism and agriculture - without trying to confine their activities to closed zones that will, over time, empty large tracts of land of their productive capacity, not to mention create a dependency on Israeli goodwill to allow these closed zones to function properly.
Similarly, confiscating agricultural land to make way for large industrial projects not only strips farmers of their livelihoods, but structurally reorients a key segment of the labor force that, over time, will lose its skills. Agricultural development in Palestine is not in need of a "zone," but rather requires Israeli compliance with international law, to release Palestinian water resources, and remove the myriad of access and movement restrictions that do not allow people or products to travel freely within Palestine and abroad.
Building high-tech zones in the vicinity of university campuses would be a more appropriate 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.
While they might benefit a certain elite, the planned economic zones cannot benefit Palestinian strategic interests. The notion that political differences can be solved through job creation is fundamentally flawed and will not change the reality that our economy is micromanaged by a foreign military. The development projects proposed by the international community would only normalize the illegal occupation, by working in partnership with Israel to fine-tune its mechanisms of control.
Sam Bahour is a Palestinian business management consultant living in Ramallah and blogs at www.epalestine.com.
Note: The original (longer) version of this essay was published in German here.
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