Palestinian economy

Israeli investors had reason to celebrate last month with the news that Israel may soon be joining the club of oil-producing states. Only one cloud looms on the horizon. It is unclear how much of this new-found oil wealth actually belongs to Israel. The Meged 5 oil field extends over a very large area, possibly 250 sq km, with much of the reserves believed to lie under Palestinian territory in the West Bank. PA officials refer to it as part of Israel’s “theft of Palestinian national resources”.

The focus of last week’s World Bank report is on the nearly two-thirds of the West Bank, known as Area C, exclusively under Israeli control and in which Israel has implanted more than 200 settlements to grab Palestinian land and resources. The report reflects mounting frustration in European capitals and elsewhere at Israeli intransigence and seeming US impotence. Europeans, in particular, are exasperated at their continuing role effectively subsidising through aid an Israeli occupation with no end in sight.

The largest exhibition ever staged by Israel’s national museum, dedicated to the life of King Herod, has generated unprecedented excitement at home and abroad. But the exhibits have been taken from sites located in the occupied Palestinian territory of the West Bank, outside the recognised borders of Israel. PA official Hamdan Taha said: “This is just the latest example of an Israeli policy to use archeology to cement its political claims to land that belongs to the Palestinian state.”

In poll after poll Israel ranks as one of the countries with the most negative influence on international affairs. And yet, the lower Israel sinks in public estimation, the more generous western leaders are in handing out aid and special favours to their wayward ally. The past few days have been particularly shameless. It was revealed last week that the European Union had approved a massive upgrade in Israel’s special trading status, strengthening economic ties in dozens of different fields. The decision was a reversal of a freeze imposed in the wake of the Gaza attack of winter 2008.

Thousands of pilgrims flocked this week to Israel’s latest tourist attraction, touted as the place where Jesus was baptised in the River Jordan. Visitors to Qasr al Yahud, in the Jordan Valley, received an unusual welcome, however. They had to pass through a fenced-off corridor warning that landmines surrounded them on all sides. At the river’s edge, they were watched over by armed Israeli soldiers in watchtowers with orders to stop anyone trying to cross the short stretch of water that marks the border with Jordan.

As Israel this week declared the “easing” of the four-year blockade of Gaza, an official explained the new guiding principle: “Civilian goods for civilian people.” The severe and apparently arbitrary restrictions on foodstuffs entering the enclave – coriander bad, cinnamon good – will finally end, we are told. Gaza’s 1.5 million inhabitants will have all the coriander they want.

Over the past four decades Israel has defrauded Palestinians working inside Israel of more than $2 billion by deducting from their salaries contributions for welfare benefits to which they were never entitled, Israeli economists revealed this week. A new report, “State Robbery”, says the “theft” continued even after the Palestinian Authority was established in 1994 and part of the money was supposed to be transferred to a special fund on behalf of the workers.

Israel celebrated at the weekend its success at the United Nations in forcing the Palestinians to defer demands that the International Criminal Court investigate allegations of war crimes committed by Israel during its winter assault on the Gaza Strip. The about-turn, following furious lobbying from Israel and the United States, appears to have buried the damning report of Judge Richard Goldstone into the fighting, which killed some 1,400 Palestinians, most of them civilians.

Yunis al Masri was luckier than his brothers from Gaza. Although the truck that ploughed into their car as they travelled to work in Israel 24 years ago killed Jaber and Kamal instantly, Mr al Masri survived with shattered bones, internal bleeding and brain damage. Certified as disabled, he is entitled to a monthly allowance of $800 from Israel’s National Insurance Institute to support his wife and 10 children. In early January, however, the transfers of disability benefits stopped arriving in his bank account. About 700 other injured workers are in the same situation.

The accelerated pace of Gaza’s economic asphyxiation since January, when the Bank of Israel cut ties with the tiny enclave, has highlighted the degree to which Israel has engineered the Gaza Strip’s absolute financial dependency on its larger neighbour. The Harvard political economist Sara Roy has characterised Israel’s long-term policy towards Gaza as one of “de-development”, or “the systematic and progressive dismemberment of an indigenous economy by a dominant one”.

The reality of Israeli Prime Minister Benjamin Netanyahu’s promises of “economic peace” for the Palestinians is nowhere under greater scrutiny than in Jenin, the northern West Bank city being aggressively promoted as a potential model of co-operation with Israel. Once known as the City of Martyrs for the high number of suicide bombers it despatched into Israel, today Jenin is being feted – at least by Israel – as a successful experiment in peacemaking.

Benjamin Netanyahu, Israel’s prime minister, has been much criticised in Israel, as well as abroad, for failing to present his own diplomatic initiative on the Israeli-Palestinian peace process to forestall US intervention. Mr Netanyahu may have huffed and puffed before giving voice to the phrase “two states for two peoples” at Sunday’s cabinet meeting, but the contours of just such a Palestinian state – or states – have been emerging undisturbed for some time.

The sun is sinking fast behind the trees of an olive grove on the outskirts of the West Bank village of Nilin. After a day of confrontations between the Israeli army and the Palestinian villagers over Israel’s building of its separation wall on Nilin’s land, the soldiers appear finally to have gone. Overlooked by the homes of the neighbouring Jewish settlement of Hashmonaim, a handful of Nilin’s braver teenagers finally come out to work. Jamal and Abed are sweating from their efforts to beat both nightfall and the return of the army.

The small village of Taybeh, nestling in the mountains of the West Bank, has established several Palestinian firsts, but it hopes its latest will make it a household name in the Arab world. As well as being the only entirely Christian village in the Palestinian territories and running the only Palestinian brewery, it now hopes to export what it is calling a “non-alcoholic beverage”, modelled on its popular Golden Taybeh beer, to Muslims across the Middle East.