The Economics of an Independent Palestine

Published 10 May 2017

The Zionist perception formed two units for Palestine: one that was Jewish and one that was not Jewish. Despite the fact that Palestine was not divided during the Ottoman period, a conflict centered on the Palestinian territories made way for what was called the ‘demographic danger’ by the 1960s… a fear that Israeli would be converted to a bi-national state. With the help of the Bush administration and Palestine’s self-determination, the ‘two-state solution’ became possible, especially with an economic viability that could present brighter future for the state. With the Palestinian culture and citizens being scattered in large numbers across borders, an independent Palestine was actually possible, especially that they had an economy that was thriving and improving. This is where Sufyan Alissa centers her piece in what is entitled as ‘The Economics of an Independent Palestine’. With economic development being shaped in the West Bank and Gaza Strip or WBGS, it made way for the establishment of the Palestinian Authority or PA that, in the process, made way for policies to take greater dimensions across borders. Many think that Palestine was about to experience a thriving economy—until it broke loose in September 2000 (Alissa 123). With the collapse of the Camp David negotiations, it led to numerous outbreaks between groups and movements.

Main Body

In Alissa’s text entitled ‘The Economics of an Independent Palestine’, the author tries to point out the Israeli policies centered on controlling the WBGS and destroying that economy (123); this, despite the fact that there were other powerful groups and movements that were scattered around the WBGS, such as the PA and some international donors’ community. According to Alissa, “[A] viable national economy is considered to possess two main characteristics: the ability to function as a normal economy, and to generate economic prosperity for the population” (123-24). More so, Alissa also wrote the following lines:

A functioning economy is defined as having geographical linkage between all areas of the country, free movement of labor and capital, its own currency, the possibility of determining its own fiscal and monetary policies, control over its own natural resources, rights to develop its own productive base, the capacity to determine economic relations with other countries, and the ability to make the necessary legal arrangements to regulate and protect the economy. (124)

The economic policies exercised by Israeli intended to improve the economy of WBGS without putting changes on the structure of the economy and standard of living that, in the process, should weaken the indigenous economic base by strengthening the Palestinian society through product competition and the like. Palestine would, thus, be encouraged to become an independent state through “a complementary and discriminatory system of integration and segregation producing a dual outcome… individual prosperity and communal stagnation” (125). However, this appears to be an act of exploitation on the side of the Israeli government, through the exercise of selective integration, where only cheap labor and limited production would be allowed at all costs. No equal commercial exchange was said to be allowed that, by the 1990s or after the second Gulf War, introduced a number of restrictive policies and collective punishment and restrictions, which brought further complexity to the political and economic arena of Palestine.

General, comprehensive, and internal closure policies were applied (126), and by 2002, a control in terms of its natural resources led Israeli to build strong walls intended to further extension of control over the WBGS by means of “increasing the size and number of colonial settlements and settlers, and to fragment the WBGS areas into many enclaves” (127). Israeli gained its control over the Palestinian people, economy, and territory… implementing procedures that control the resources and increase the price of land and water that, in the process, increased the cost of agricultural production. By 2002, Israeli built a separation wall under these two motives: first, to confiscate more land in the colonization of WBGS; and second, to displace Palestinians by denying them access to their land and resources (128).

It appears that the PA had failed to properly and rightfully administer its land. Since its establishment in 1994, there had been numerous debates on the true state and role of the PA concerning its mandate, responsibilities, and plan of action. With exceedingly limited control over policies and resources, its attempt to build a developmental state during the Oslo Accords was nearly impossible because of Israeli’s policies of closure, settlement building, bypass construction, and control over natural resources (Alissa 132). However, this does not state PA as politically and socially futile. Its plans of action were just weak and inappropriate.


There were a number of helpful things that PA brought to its society, such as greater privileges and rights like the numerous government institutions that delivered apt services and privileges to the Palestinian citizens. Its failure in terms of its plan of action has tragically coincided with Israeli’s policies of colonization and land confiscation, and this brought danger, especially that Israeli controls most of Palestine’s resources, population, and power. Although PA had brought great privileges and assistance to the Palestinians, it needs to be strengthened and improved, chiefly because it had failed to develop a ‘functioning economy’ to its state and society—one that has geographical linkage, liberty, and the ability to build, control, and administer its own currency, own policies, own resources, own rights, and own capacities. They forgot that the most important power of all resides on the people.

Works Cited

  • Alissa, Sufyan. “The Economics of an Independent Palestine.” Where Now For Palestine?: The Demise of The Two-State Solution. Ed. Jamil Hilal. Atlantic Highlands, NJ: Zed Rooks Ltd., 2007. 123-143.
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