Talk about the rights and wrongs of the Palestinian economy, and you automatically get caught up in the crossfire of Middle East protagonists.

The story of UN Secretary General, Ban Ki-Mon, is a great example. Visiting Gaza a few days ago, he condemned Israel’s blockade of the territory. In parallel, it could be asked why he did not condemn Egypt’s blockade from its side of the border? The Jerusalem Post newspaper, quoting UN stats, questioned if there is a true humanitarian crisis in Gaza.

And so on. However, there are certain facts, which cannot be disputed. The West Bank under the control of the Palestinian Authority had a boom year in 2009, even when international economies were in free fall. The World Bank suggests 8% growth in just 12 months.

Is there more potential to be released? Surely. And the Palestinians have finally realised: Israel relaxes the security measures when there is less violence, ensuring greater freedom of movement. Everyone benefits. Simple.

Move over to Gaza, and the Hamas regime has not delivered economic prosperity. In fact, the local authority has now even began to control who will receive a haircut and by whom.

Meanwhile, Israel continues to allow the transfer of cash to international organisations operating in the Gaza Strip and the transfer of shekels to pay the wages of Palestinian Authority employees (about 70,000 in number).  And it continues to supply around 70% of the electricity needs of the area. 

The bottom line is that the Palestinian economy is split in two. The West Bank is replacing violence for higher income levels. In Gaza, the intensity of the official hatred for Israel is matched only by the high levels of unemployment.

Meanwhile: I have added a series of selected facts taken from the World Bank report and official Israeli sources.

• Trade between Israel and the West Bank dropped by 4.05% in 2009 as compared with 2008, and constituted 70% of all the trade of the West Bank. The volume of trade with Israel stood at 13,594 million NIS.
• The total trade of the West Bank grew by 2.75% in 2009 as compared with 2008. The total trade (including Israel) stood at 19,310 million NIS in 2009.
• Palestinian imports from the world (not including Israel) registered an increase of 25% in 2009 as compared with 2008.
• Palestinian exports to the world (not including Israel) registered a drop of 2.3% in 2009 as compared with 2008.
• In 2009, Israel transferred to the Palestinian Authority (after deduction of payments owed by the Palestinians) 4,272 million NIS as compared with 3,918 million NIS in 2008. The increased amount constitutes another indicator of the growth in the Palestinian Authority’s economic activity.
• Other indicators point at the growth of economic activity: an increase of 41% in truck movement between Israel and the West Bank; an increase of 29% in fuel consumption and of 7.6% in diesel fuel consumption in mid-2009 in comparison with the parallel period in 2008. The significant rise in automobile imports into the West Bank is also continuing.
• A survey undertaken by the Palestinian Bureau of Statistics among businesspeople in the West Bank and the Gaza Strip in December 2009 points to an increase in optimism among manufacturers and businesspeople.

 Steps Taken by Israel to Support Palestinian Economic Activity

•   Increasing the hours when the Allenby Bridge Terminal is open to the passage of goods and pedestrians
• Upgrading the Gilboa-Jalameh crossing point in the northern part of the West Bank for vehicular traffic (opened on 13 October 2009). About 1500 cars enter the West Bank through this crossing point every weekend. Since the crossing point was opened to vehicles, the economy of Jenin has grown by 30-35%. The income deriving from the entry of Israeli Arabs into the towns of Jenin, Tulkarm, Jericho, and Bethlehem is estimated to be around 8 million NIS every weekend. In November and December, over 30,000 vehicles entered through the Gilboa crossing point alone. The permit for Israeli Arabs to enter the West Bank with their vehicles through various crossing points constitutes a significant contribution to the local economic activity.
• Removal of roadblocks and barriers: Since 2008, the number of major checkpoints was reduced from 41 to 14. From April 2008 until today 209 roadblocks were removed. Ten of the barriers that were removed this past January are on Route 60, the major north-south artery in the West Bank.
• This past year considerable sums of money were invested in upgrading the crossing points for goods between Israel and the West Bank, so that they could manage the movement of trucks in short periods of time and with efficiency. During 2010, 8 million dollars have been invested (with USAID funding) in upgrading the Gilboa and Shaar Ephraim crossing points for goods.
• Beginning in January 2010, the hours of operation at the Tarqumiya crossing point for goods were extended, a measure which enables Palestinian merchants to increase the number of shipments which are sent on a daily basis to Israeli ports.
• The quadrilateral dialogue headed by Japan to establish an agro-industrial zone in Jericho is continuing. An additional meeting will be held on 17 March.
•  Israel is acting to assist the French initiative to establish an industrial zone in Bethlehem and is acting in full cooperation with the French President’s envoy to move the project forward.
• Israel maintains close working ties with the Quartet’s Envoy, Tony Blair, and his team to handle and promote economic projects and measures that support economic activity, including the issue of the access road to the town of Rawabi.
• The Israeli security network maintains close ties with General Dayton and is doing all that it can to assist the process of building the capabilities of the Palestinian security forces. Israel participates in a quadrilateral monitoring forum which convenes pursuant to the Berlin Conference and discusses subjects pertaining to the development of Palestinian capabilities in civilian security as well as in building capabilities pertaining to the law and to the judicial system.

The Gaza Strip

There is no shortage in the Gaza Strip, due in part to the flow of goods and raw materials through the tunnels.

• Recently, the entry of glass into the Gaza Strip began, to enable the repair of homes that were damaged during Operation Cast Lead against Hamas. More than 100 trucks carrying glass have entered thus far into the Gaza Strip and this is continuing.
• Israel has advanced contacts with the UN Secretary-General’s envoy, Robert Serry, to approve the carrying out of humanitarian infrastructure projects in the Gaza Strip, with emphasis on water and sewage.
• Israel enables strawberries and carnations to leave the Gaza Strip for markets abroad.
• Israel enabled in recent months the entry of cement and construction materials for the reconstruction of buildings and for various humanitarian projects. From May 2009 through January 2010, 1,352 tons of building materials entered the Gaza Strip. Israel approved the entry of an elevator for the maternity hospital al-Awad (15 February).
• Recently, Israel arranged the matter of transferring social security payments to beneficiaries in the Gaza Strip.