Movement of People and Goods: The Occupied Gaza Strip After "Disengagement"

August 01, 2005

"Part of our definition of success is that Gaza function as an economic entity. And that means that there has to be access in and out, in a way that helps the economy, not just keeps it where it is. There has to be some economic interaction with the West Bank as well, and there has to be connectivity with Egypt." - David Welch, United States Assistant Secretary of State on Near Eastern Affairs1

Fact Sheet

Although Israel’s “Disengagement” Plan was conceived to help Israel consolidate its hold over the West Bank and its resources, especially in and around Jerusalem, Palestinians seek to transform Israel’s evacuation from the Gaza Strip and isolated parts of the northern West Bank into an opportunity for peace. To do that, Palestinians need the freedom to be able to revitalize their economy, devastated after 38 years of Israeli occupation.

Economic recovery depends on the ability to trade; and trade, in turn, depends on the ability of goods and people to move freely. Gaza, however, has been virtually isolated from both the West Bank and the rest of the world for years. Cut off from markets, goods, services, resources, and people, Gaza is still imprisoned in a humanitarian crisis: In 2004, roughly two-thirds of Gazans subsisted on US $2.25 or less per day, while enduring Israel’s imposition of some the highest electricity rates in the world.

After “Disengagement,” Gaza will likely still be cut off from the occupied West Bank, including East Jerusalem, and the rest of the world. According to the terms of the “Disengagement” Plan, Israel will retain control over all of Gaza’s borders—including Gaza’s border with Egypt—and Gaza’s airspace and sea space. It will unilaterally decide if and when Gaza will open an airport or a seaport, and it will prevent Gaza from opening a territorial link with the West Bank. In short,every person, good and resource entering or leaving Gaza will be subject to Israeli control, if the Plan is enacted as approved by the Israeli cabinet.

The international community has recognized, however, that for Gaza to be a success, it needs access. The Gaza Strip is one of the most densely populated areas on earth and lacks the natural resources and room for development necessary to make it an independent economic entity. 

Without access to East Jerusalem’s unique market, without access to the rest of the West Bank and its resources and markets, without access to the future Palestinian capital in East Jerusalem, and without access to international markets and trade partners, the Gaza Strip and the West Bank will remain encaged in crisis. 

East Jerusalem, and without access to international markets and trade partners, the Gaza Strip and the West Bank will remain encaged in crisis.

Essentially, Palestinians need free access within Palestinian territories and to the world to build their economy, to ensure their security, and to exercise their democratic rights. Palestinians seek stability, freedom, and peace—nothing more, and nothing less.

After “Disengagement,” Gaza’s economic success will depend on the relatively free movement of people and goods through the following access points:

1. Overland Crossing Points

Currently, entry/exit points for Palestinians exist at Erez in the North, Karni in the East, and Rafah in the South. The Israeli military controls each of these crossing points, regulating all land access of people and goods between Gaza, the West Bank, including East Jerusalem, Israel, and the world.

Because of “Disengagement,” these overland crossing points may change in location or function. For example, the Rafah crossing point connects Gaza to Egypt. Currently, Israel permits very few people (less than 400 in each direction per day) and virtually no goods to pass through the Rafah crossing point. After “Disengagement,” Israel has considered moving the crossing point to Kerem Shalom, which is located at the southeast corner of the Gaza Strip, bordering both Egypt and Israel. Moving the crossing point there, however, would ensure Gaza’s continued dependence on Israel, as Israel would continue to control Gaza’s access to and from Egypt. 

The Palestinian Authority would welcome a third party to ensure smooth functioning and transfer of the Rafah crossing point to Palestinian control post evacuation and to monitor customs arrangements. This move would represent an important step towards Gaza’s—and by extension, Palestine’s—future independence and success; thus, it would also represent an important step towards peace. 

At press time, Israel continued to reject the Palestinian proposal for third-party monitoring—a proposal supported by the World Bank and the International Monetary Fund (IMF).

2. Airport

The Gaza Strip, unlike the West Bank, has an airport capable of opening the West Bank, including East Jerusalem, and the Gaza Strip’s goods, people and markets to the world. The Israeli military destroyed the runway of the airport; however, the airport could be operational for daytime use within months after Israel completes its evacuation from Gaza.

In order to become fully operational, the airport needs only to have the runway repaved and the radar system upgraded. All other systems of the airport are fully-operational and have been maintained since the outbreak of the Al-Aqsa intifadain September, 2000. 

Israel has rejected any discussions on reopening the airport. Moreover, since Israel will continue to control Gaza’s airspace, Palestinians will be prevented from developing independent satellite communications and telecommunications projects which rely on the electromagnetic field.

3. Seaport 

Currently, Gaza does not have a functioning seaport—it has to rely on Israel’s ports and will continue to have to rely on Israeli and Egyptian ports in the period following “Disengagement.” 

Since Israel has restricted Gaza’s access to the West Bank, including East Jerusalem and beyond, and since Israel restricts movement and trade entirely within the West Bank and the Gaza Strip, the Palestinian market might be too small to support a full-functioning seaport now. If Palestinian people and goods could freely move within Palestinian territory and to the rest of the world, however, a seaport would provide Palestinians essential access to world markets. 

Recently, Israel has indicated that it would allow Palestinians to build a seaport. However, building a seaport will take two to three years to complete. Moreover, a seaport may not provide tangible benefits to the Palestinian economy unless three conditions are met:

  1. Gaza’s and the West Bank’s external borders are opened;

  2. Restrictions on the freedom of movement are lifted within the West Bank, especially to and from and East Jerusalem; and

  3. A dedicated territorial link is opened between the Gaza Strip and the West Bank. 

By providing Palestinians an invaluable opportunity to build an independent economy, the seaport could be an important step forward in building an independent and viable Palestinian state. But if Palestinian goods and people can’t get to the port, and if international goods and people can’t get to Palestinians markets or beyond, the seaport won’t do anything.

4. Safe Passage/Territorial Link

The Gaza Strip and West Bank complement one another: The Gaza Strip has access to the sea and a large natural gas reserve, while the West Bank does not; the West Bank is rich in water resources and room for development, while the Gaza Strip is not. Moreover, Palestine’s future capital and most important potential market, East Jerusalem, and Palestine’s current seat of national government, Ramallah, both lie in the occupied West Bank. For the Gaza Strip to succeed, it needs immediate access to the West Bank, the East Jerusalem market, and the Palestinian national seat of government—all of which in turn need unfettered access to Gaza. 

Otherwise, Palestinians will not be able to build their economy or freely engage in such basic democratic activities as campaigning within Palestinian areas. 

A number of proposals for territorial links have been discussed. Some proposals have separate links for train service, road service, and the provision of public utilities. Some proposals package all of the necessary links (highway, water, gas, electricity, communications, train and air links) into the same geographical region. 

Whatever the solution, the international community and Israel recognized that the West Bank and the Gaza Strip represent one territorial unit in the Oslo Accords. This means that Palestinian people and goods are assured access between both parts of the occupied Palestinian territory until a permanent territorial link is established. 

Moreover, the Oslo Accords detailed specific “safe passage” procedures and routes between the West Bank and the Gaza Strip. While Israel improved—and improves—Israeli access to its illegal settlements (colonies) throughout the occupied Palestinian territory, it has never permitted a fully-operational safe passage between the West Bank and the Gaza Strip. 

Palestinians recognize the actual and potential interdependency of the Gaza Strip and West Bank. Palestinians also recognize that a comprehensive and dedicated territorial link cannot be established before the end of Israel’s evacuation from the Gaza Strip. Accordingly, Palestinians simply demand that Israel implement the safe-passage agreement for people and goods until such a territorial link can be completed—a matter that Israel has rejected so far.

5. Customs Arrangements and Import Policies (“Paris Protocol”) 

Customs arrangements and import policies regulate how goods leave and enter a specified territory. Currently, Israel and the Palestinian Authority are engaged in a quasi-customs union, known as the “Paris Protocol.” 

The Paris Protocol, signed in 1994 and ratified in 1995, created one “customs envelope” in Israel and the occupied Palestinian territory. In part, this means that any goods entering the customs envelope will be subject to a uniform tariff and import policy, however, goods traveling within the envelope will not—e.g. a computer destined for Ramallah is subject to an import tariff at Ben Gurion airport, but is not subject to an additional tariff when traveling from Tel Aviv into occupied Palestinian territory; similarly, wicker furniture from occupied Gaza destined for Haifa is not subject to export or import tariffs when crossing into Israel. 

When ratified, Palestinians believed that the Paris Protocol would open their markets to the world. Since the occupied Palestinian territory does not have a functioning airport seaport, or control over any of its border crossings, Palestinians must rely on Israeli access points (such as Ashdod Seaport or Ben-Gurion Airport). The Paris Protocol established that Palestinian goods would enjoy “equal trade and economic treatment” with Israeli goods at all access points (Annex V, Article III, section 13). 

In practice, however, this has not been the case. Israel has detained Palestinian goods at access points, sometimes for weeks or months. Accordingly, Palestinian businesspeople have resorted to using Israeli intermediaries to import and export goods. This means that tariffs that would normally go to the Palestinian Authority go to Israel via the Israeli intermediary instead. Not only does the PA lose out on revenue generated from tariffs, but also goods become more expensive: Palestinian businesspeople must pay their Israeli intermediaries to handle Palestinian goods, increasing transaction costs. 

Even if implemented properly, the Paris Protocol might still engender the conditions for indefinite Palestinian economic dependence on Israel. The Protocol requires that only goods that meet Israeli standards can enter the customs envelope. Israel, for all intents and purposes, is a first-world country with a robust economy; the occupied Palestinian territory, however, has roughly ½ Israel’s population but only 1/34th Israel’s GDP. The majority of Palestinians subsist on $2.25 per day or less, meaning that most Palestinians cannot afford these goods. 

Already, 95% of Palestinian exports go to Israel: Thus, Palestinians are dependent upon Israel while also serving as a captive civilian market for Israel. This dependence/captivity is so extreme that in 2004 the gross Palestinian GDP was roughly US$ 3.2 billion; yet the Palestinian Authority had a trade deficit of US$ 1.3 billion with Israel alone. And despite Palestinians’ weak purchasing power, Palestinians pay some of the highest electricity rates in the world, higher than rates paid by their better-off Israeli neighbors—all because Israel prohibits Palestinians from adequately developing their own resources or participating in the international competitive market place. 

Because the Paris Protocol restricts the quality of goods that Palestinians can import, and because Israel restricts Palestinian access to internal and external markets—which would enable Palestine to dramatically (and independently) improve its GDP—Israel can and does dump lower-quality goods in the captive civilian Palestinian market. Entrenching this dependence does not serve the interests of the Palestinian economy, or by extension, the interests of peace. 

An historic and viable peace depends on a viable Palestinian state. A viable Palestinian state, in turn, depends on economic independence. While the Paris Protocol is not perfect, the Palestinian economy can immediately benefit from the Protocol’s proper implementation: The Palestinian Authority would receive funds and Palestinian businesspeople would be able to once again engage in international trade. Moreover, the Paris Protocol could help facilitate international Palestinian trade until the airport and seaport are opened in Gaza and until the territorial link between the Gaza Strip and the West Bank is completed and fully-operational. 

But unless implementation of the Paris Protocol is accompanied with independent Palestinian access to internal and external markets, Gaza and the rest of the Israeli-occupied Palestinian territory will remain embroiled in humanitarian crisis. That humanitarian crisis, in turn, stokes political instability.

6. Movement of Goods and People within Israel and the occupied Palestinian territory: “Back-to-Back” v. “Door-to-Door” 

After “Disengagement,” Israel plans to keep restrictions on the movement of people and goods within and between parts of the occupied Palestinian territory, and with Israel. 

Israel currently administers the “closure regime” in the Gaza Strip and the West Bank. The closure regime is a matrix of restricted roads, checkpoints, dirt mounds, and blockades that restrict Palestinian movement between and within Palestinian areas. The World Bank and the international community have identified the closure regime as a direct cause of the economic and humanitarian crisis in the occupied Palestinian territory. 

The closure regime means that Palestinians often have to obtain permits to travel on Palestinian roads, entirely within Palestinian territory; thus, travel and trade is severely restricted for Christian and Muslim Palestinians—even entirely within Palestinian territory—while Israelis enjoy unfettered access to Israel’s illegal settlements (colonies) in the occupied Palestinian territory. 

One striking example of Israel’s closure regime is the “back-to-back” system. The “back-to-back” system requires Palestinian merchants to off-load goods at Israeli checkpoints and then to reload those goods into new trucks on the other side of the checkpoint. Israel not only subjects Palestinians to the “back-to-back” system at checkpoints between the occupied Palestinian territory and Israel, but also imposes the “back-to-back” system on trade entirely between some Palestinian cities and towns. 

Meanwhile, Israeli goods, including those coming from Israel’s illegal settlements (colonies), frequently are not subject to the “back-to-back” system. Because the “back-to-back” system can increase transaction costs for Palestinian goods by as much as 100-200%, this procedure gives Israeli goods an unfair competitive advantage over Palestinian goods in captive Palestinian markets. 

After “Disengagement,” the closure regime will have been lifted within the Gaza Strip; however, Gaza will still likely be separated from the West Bank and the rest of the world. And during and after “Disengagement,” Israel will continue toentrench the closure regime in the West Bank, especially in and around Jerusalem. 

Now, Israel is unilaterally building two-separate transportation networks throughout the West Bank: One for the exclusive use of settlers, and another, a system of circuitous roads and tunnels, for Palestinians. The settler road network facilitates the incorporation of all of Israel’s West Bank settlements on both sides of the Wall
into Israel: The only exceptions are the four settlements slated for evacuation in the northern West Bank. 

Palestinians already have an adequate road network in the West Bank. The problem is not that Palestinians need new roads and tunnels; rather, it is that Israel restricts access to Palestinian roads—roads that they are entitled to use under international law. While Israel’s massive infrastructure project in the West Bank might ephemerally ease the Palestinian humanitarian crisis upon completion, it ensures complete Palestinian dependence on the international community in the long run: The settler roads fragment the West Bank and the settlements and Wall take the occupied West Bank’s best lands and resources for exclusive Israeli use. This means no Palestinian room for development, no independent Palestinian economy, no viable Palestinian state—and by extension, no viable peace.

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