TEL AVIV - Israel's new security fence around the West Bank could prove to
be the final straw for the already crippled Palestinian economy while having a
minimal effect on Israel, analysts said.
The fence, aimed at preventing suicide bombers and car bombers from entering Israel, will also stop thousands of Palestinians from working in Israel and earning badly needed cash, representatives of donor countries and the United Nations said.
An Israeli bulldozer works to build a security fence south of Jerusalem June 27,
2002. Israel's new fence around the West Bank could prove to be the final straw
for the already crippled Palestinian economy while having a minimal effect on
Israel, analysts said. (Nir Elias/Reuters)
Shaun Ferguson, head of the economic unit at UNSCO (United Nations Special Coordinating Organization) in Ramallah said the fence would lead to a sharp rise in unemployment in the West Bank which some sources estimate at more than 60 percent.
"There's a strong correlation between Israeli closures and rising poverty levels in the Palestinian areas," he said. "There were 39,000 Palestinians working in Israel in the fourth quarter of 2001. If you multiply that by a dependency ratio of six you see the impact the fence will have."
Israel started work three weeks ago on the first stretch of a 225-mile security fence which includes trenches, early warning and surveillance devices in the northwest of the West Bank. At a cost of $1 million per km, the 110-km first stage is due to be completed within 10 months with plans to fence off the entire West Bank.
Israel denied the fence would shut out legal workers. "Our main focus is ending the unacceptable ease with which Palestinian bombers have entered Israel," said Ra'anan Gissin, a spokesman for Prime Minister Ariel Sharon. "There will be controlled crossing points for legal workers to get into Israel."
"The border is porous and we need to prevent infiltration and have sufficient early warning if bombers do get in."
Israel also started work on Sunday on a 50 km fence around Jerusalem's borders with the West Bank in response to Palestinian suicide bombings that have killed at least 80 people in the city since a Palestinian uprising began in September 2000.
"The Palestinian economy has been dependent on salaries from its workers in Israel since wages are much higher than in the Palestinian areas," said a source for the international donors to the Palestinian Authority who declined to be named.
"The fence will have an immediate impact since the economy is doing so badly anything they earn prevents a human crisis.
"But the internal closures Israel has imposed in the West Bank (since the outbreak of the uprising) almost makes the fence irrelevant anyway since Palestinians cannot move around and get to jobs in Israel," the source added.
At the start of the uprising 20 months ago, 60,000 Palestinians were working in Israel, the donor source said.
"That number has dropped dramatically as closures have increased, but it's impossible to give a precise figure. It's certain there will be a strong impact."
PALESTINIANS REPLACED BY OVERSEAS WORKERS
Israel has been weaning itself from its dependence on Palestinian workers over the past decade following the first Intifada, or uprising, of 1987-1993.
Today an estimated 300,000 workers from Romania, Thailand, the Philippines, Turkey, China and many other countries have replaced the Palestinians in the agriculture, construction and service industries.
"At the peak in 1991-1992, there were about 200,000 legal Palestinian workers and at least the same number of illegal workers," said Gil Bufman, chief economist at Bank Leumi. "That number has fallen due to the attacks over the years and the economic links have weakened.
"The Palestinian economy shows growing poverty and unemployment and a further push will cause a further deterioration that will put the population in a very difficult situation."
Bufman said the fence would also make financial transactions more difficult since the shekel is the most widely used currency in the Palestinian areas. "With fewer shekels circulating, economic activity is going to fall."
He also said Israel could suffer from lower sales to the Palestinians, particularly in the food sector, if Palestinian earning power dropped but said the effect was likely to be marginal.
Not everyone agrees, however, the Israeli fence will have a major impact on the Palestinian economy.
Professor Gerald Steinberg, director of a program on conflict management at Bar Ilan University, said the number of legal Palestinian workers was "between several hundreds to a few thousands."
He said a figure of 25,000 cited by the Israeli media for the number crossing illegally into Israel on a daily or weekly basis was "an exaggeration."
"The Palestinian economy has suffered during the past two years and will continue to suffer," Steinberg said. "The economic impact of the fence is marginal since the number of workers has fallen dramatically in the past 10 years."
He said 100,000 Palestinian workers living in Israel had entered illegally
in the past five years and their importance to the Palestinian economy, from remittances,
was much stronger than a few thousand entering and leaving on a daily or weekly
Copyright 2002 Reuters Ltd