by Geetika Nagpal
Since the birth of the yet-to-be-acknowledged Palestinian state, the violent conflict between Jew-dominated Israel and Palestine is yet to meet its end. The negative impacts of this raging hostility have rippled through generations and trickled down to all layers of the economy over time. The conflict has been intertwined with fluctuations in the productivity of the two economies as well as their governmental structure.
Over the years, as the economy of Israel reached new heights, the Palestinian economy saw new lows. While the Palestinian economic instability reached a new peak with the declaration of a 45 percent unemployment rate in the Gaza Strip and 25 percent in the West Bank by the United Nations Relief and Rehabilitation Administration, the Israeli unemployment rate remained a meagre 5.6 percent.
While graciously moving from being forced to sign economic and trade bonds with countries in order to sustain to becoming an international economy enjoying the revenues from exports and trade, Israel achieved an unemployment rate about half of that in the Middle East and North African region. As Israel revelled in its glory of establishing strong economic ties with the US, Canada, India and Turkey, its economic blockade on the coastal territory and repeated closure of electricity and fuel sources in the Gaza Strip led to the shutdown of 95 percent of the operating factories in the region.
In 1995, apart from gains through international trade, Israel witnessed a substantial increase in revenue that was credited and connected to the sharp fall in violence and the advancement of peace agreements between Israel and the Palestinians.
As violence and chaos subsided, more individuals from countries around the world were drawn to visit sites like Jerusalem, Eilat and the Dead Sea. The region was viewed as temporarily safe by tourists and hence led to an increase in the revenue associated with the tourism sector. Tourism in Israel will forever be connected to the Arab-Israeli conflict, as the conflict itself directs the revenue of this lucrative sector.
While Israel’s economy has several pillars that it can balance on, Palestine’s economy has fewer resources available. Starting out as a young nation, Israel soon acquired greediness for power and a Macbethian willingness to let all (read Palestinians) suffer who stand in its way. Palestine has meanwhile managed to sustain its economy solely on the basis of international aid provided to it by Germany, Norway, Japan and the European Union. Estimated at three billion dollars, the aid has ensured that the Palestinian economy does not crumble and collapse in the absence of the establishment of a Palestinian state.
The World Bank predicts that 67 percent of the Palestinian population shall become victim to poverty if this dark conflict continues to cloud the future. The upgradation of Palestinian status to that of a ‘non-member observer state’ will prove to be a stepping stone in the creation of a stable economy for Palestinian generations to come.
The impact of this war has been far-reaching; not limited to Israel and Palestine. The war has caused a drain of the resources available in the Middle East for defense purposes. Further, due to failed trade agreements with Jordan worth $29 million and the animosity in the region due to the Arab-Israeli conflict, it is evident that the true trade potential of the region has not been realised. The conflict has limited the economies of Israel, Palestine and the entire Middle East from perhaps becoming the richest nations, owing to the oil resources available in the region.
"UN Study: Gaza Unemployment Rate Remains among the Worst in the World." Haaretz.com. N.p., 14 June 2011. Web. 14 Jan. 2013. <http://www.haaretz.com/news/diplomacy-defense/un-study-gaza-unemployment-rate-remains-among-the-worst-in-the-world-1.367580>.
Since the birth of the yet-to-be-acknowledged Palestinian state, the violent conflict between Jew-dominated Israel and Palestine is yet to meet its end. The negative impacts of this raging hostility have rippled through generations and trickled down to all layers of the economy over time. The conflict has been intertwined with fluctuations in the productivity of the two economies as well as their governmental structure.
Over the years, as the economy of Israel reached new heights, the Palestinian economy saw new lows. While the Palestinian economic instability reached a new peak with the declaration of a 45 percent unemployment rate in the Gaza Strip and 25 percent in the West Bank by the United Nations Relief and Rehabilitation Administration, the Israeli unemployment rate remained a meagre 5.6 percent.
While graciously moving from being forced to sign economic and trade bonds with countries in order to sustain to becoming an international economy enjoying the revenues from exports and trade, Israel achieved an unemployment rate about half of that in the Middle East and North African region. As Israel revelled in its glory of establishing strong economic ties with the US, Canada, India and Turkey, its economic blockade on the coastal territory and repeated closure of electricity and fuel sources in the Gaza Strip led to the shutdown of 95 percent of the operating factories in the region.
In 1995, apart from gains through international trade, Israel witnessed a substantial increase in revenue that was credited and connected to the sharp fall in violence and the advancement of peace agreements between Israel and the Palestinians.
As violence and chaos subsided, more individuals from countries around the world were drawn to visit sites like Jerusalem, Eilat and the Dead Sea. The region was viewed as temporarily safe by tourists and hence led to an increase in the revenue associated with the tourism sector. Tourism in Israel will forever be connected to the Arab-Israeli conflict, as the conflict itself directs the revenue of this lucrative sector.
While Israel’s economy has several pillars that it can balance on, Palestine’s economy has fewer resources available. Starting out as a young nation, Israel soon acquired greediness for power and a Macbethian willingness to let all (read Palestinians) suffer who stand in its way. Palestine has meanwhile managed to sustain its economy solely on the basis of international aid provided to it by Germany, Norway, Japan and the European Union. Estimated at three billion dollars, the aid has ensured that the Palestinian economy does not crumble and collapse in the absence of the establishment of a Palestinian state.
The World Bank predicts that 67 percent of the Palestinian population shall become victim to poverty if this dark conflict continues to cloud the future. The upgradation of Palestinian status to that of a ‘non-member observer state’ will prove to be a stepping stone in the creation of a stable economy for Palestinian generations to come.
The impact of this war has been far-reaching; not limited to Israel and Palestine. The war has caused a drain of the resources available in the Middle East for defense purposes. Further, due to failed trade agreements with Jordan worth $29 million and the animosity in the region due to the Arab-Israeli conflict, it is evident that the true trade potential of the region has not been realised. The conflict has limited the economies of Israel, Palestine and the entire Middle East from perhaps becoming the richest nations, owing to the oil resources available in the region.
References
International Monetary Fund Middle East and Central Asia Department West Bank and Gaza: Fiscal Performance in 2006. Rep. International Monetary Fund, Mar. 2007. Web. 14 Jan. 2013. <http://www.imf.org/external/np/wbg/2007/eng/032607fp.pdf>."UN Study: Gaza Unemployment Rate Remains among the Worst in the World." Haaretz.com. N.p., 14 June 2011. Web. 14 Jan. 2013. <http://www.haaretz.com/news/diplomacy-defense/un-study-gaza-unemployment-rate-remains-among-the-worst-in-the-world-1.367580>.
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