Extracts of a report of the Mission to the Humanitarian and
Emergency Policy Group (HEPG) of the Local Aid Coordination
Committee (LACC)
Israel's construction of the "Separation Barrier" is already
negatively impacting the economies of the northern West Bank. The
most seriously affected are the communities caught between the
barrier and the Green Line. The key issue is isolation: The barrier
is cutting off communities from their primary income streams,
either within the West Bank or in Israel. To the extent that the
barrier's course deviates from the Green Line, it has the potential
to separate Palestinian communities from one another and/or from
their agricultural lands, assets and markets. In addition to the
anticipated loss of income (especially from agricultural
activities), and the loss of income-generating assets, the barrier
may cause other economic distortions, from shifts in production, to
changes in domestic and local consumption patterns, and,
potentially, encouraging a trend away from a money-based economy to
barter.
The economic problems faced by these border communities are not
new: Their relative prosperity has been steadily undermined over
the last two years by curfew and closure. Access to jobs in Israel
- once the primary source of income for many border communities -
has been severely reduced. Income from commerce and manufacturing
has fallen considerably, due to reduced purchases by workers
formerly employed in Israel. Restrictions on travel within the West
Bank and between the West Bank and Israel have limited the ability
of customers from outside these communities to access other
markets, while agricultural producers and manufacturers have been
unable to regularly transport goods to markets elsewhere in the
West Bank. In the face of declining employment in other sectors,
agriculture has become a more important source of livelihood in
this fertile region. However, the agricultural sector's ability to
thrive is threatened by the barrier's construction.
Population and Land Use in the Border Region
The three governorates most directly affected by the first phase of
the barrier's construction are Jenin, Tulkarm and Qalqiliya, which
have a combined population of approximately 500,000. This is about
a quarter of the West Bank's total population, excluding
Israeli-annexed East Jerusalem.
The total land surface of these three governorates makes up nearly
17.6 percent of the West Bank. Land use data for the year 2000 (the
most recent available) shows that these three governorates have the
greatest area under cultivation of any in the West Bank.
Surprisingly, they are among the more urbanized, as well, with
built-up areas - residential, commercial and industrial zones -
covering 112 square kilometers (11.3 percent of their total area).
This represents 21.1 percent of total built-up Palestinian areas in
the West Bank. Israeli settlements cover 14 square kilometers (1.4
percent of the total area) within Jenin, Tulkarm and Qalqiliya.
This accounts for just over 10 percent of the total built-up
settlement area in the West Bank in 2000. (There are no figures for
the amount of undeveloped land included in settlements.)
Agriculture is the greatest user of land in these three northern
governorates, covering twice as much land as in the West Bank
overall. On average, just under 25 percent of the total land in the
West Bank is devoted to agricultural production. Jenin, Tulkarm,
and Qalqiliya together account for 37 percent of all agricultural
land in the West Bank. In 2000, they produced $220 million in
agricultural output, 45.1 percent of total agricultural production
in the West Bank. Per square kilometer of agricultural land, these
governorates produced $430,000 in output - 40.8 percent greater
output value per square kilometer than that of the other West Bank
governorates.
Economic Conditions in the Northwestern Governorates
More than 40 percent of all West Bank private-sector establishments
in the agricultural sector are located in the Jenin, Tulkarm, and
Qalqiliya governorates. Similarly, the number of wells and
irrigation networks is disproportionate to these governorates' 25
percent share of West Bank population.Also somewhat
over-represented are the number of establishments engaged in
wholesale or retail trade (including automobile repair), with this
sector comprising more than half of all private establishments in
the region. This is largely a result of the region's proximity to
Israel and the Green Line. However, employment in these
establishments is limited, averaging only one or two employees, as
most are very small-scale, family-run shops. After commercial
enterprises, manufacturing enterprises employ the largest number of
residents in these governorates (about 12,000 people) but are also
relatively small-scale - engaging on average four people per
enterprise.
Labor surveys show a decline in employment associated with the
Intifada and the imposition of tighter closure, both internal and
external. Of the 21,700 jobs lost from 2000 to 2001 in the three
governorates (plus the district of Tubas), the decline in
construction accounted for almost 50 percent. Agriculture witnessed
the second largest drop at 18 percent of the total.
It is reasonable to conclude that a considerable portion of the
decline in jobs was from employment across the Green Line in
Israel. This conclusion is based on the relatively heavy
concentration of jobs lost in these border governorates - almost
half of the people who became unemployed in the West Bank between
2000 and 2001 came from this region - a proportion greater than its
population share. (The year 2000 was an olive-harvest year,
implying greater need for agricultural workers in Israel than
non-harvest years.) By 2001, the unemployment rate in Jenin and
Tubas stood at 36.3 percent, and in Qalqiliya and Tulkarm at 25.4
percent. For the rest of the West Bank, the unemployment rate was
19.1 percent. In 2001, the World Bank released a study on poverty
in the West Bank and Gaza that developed a "poverty map" - a
geographical profile of poverty in the Palestinian territories. On
the basis of Palestinian expenditure and consumption surveys, the
key determinants of household consumption were identified. Among
the key findings were the following: If a household member is
employed in Israel, the household is better off than if he or she
works in the Palestinian territories; and, in the West Bank,
households with members employed in the private sector are better
off than those with members working in the public sector.
The 2001 World Bank study presented poverty estimates for 39 West
Bank areas. Seven of these areas include communities along the
Green Line that are directly impacted by phase one of the barrier's
construction. The study showed there was considerable variability
in poverty rates among West Bank areas (and among localities within
areas, as well).
From Relative Prosperity to Crisis in the Border
Communities
While locality-specific employment data are not available beyond
1997 (and governorate-level data beyond 2001), indirect and
anecdotal information suggests Palestinian villages and towns on or
near the Green Line generally fared better economically than
locales situated further from that border. Several factors gave the
border communities distinct advantages and greater income earning
opportunities. First, proximity to the border and, prior to the
Intifada, relatively easy access to the Israeli labor market.
Second, the relatively porous border allowed manufacturers, farmers
and merchants from border areas to access the wealthier Israeli
consumer market.
Third, large numbers of Israelis - both Arab and Jewish - regularly
frequented the border towns of Jenin, Tulkarm, and Qalqiliya to
purchase lower-cost goods and services, boosting commercial and
service incomes. Fourth, the population of these governorates
possesses, relative to others in the West Bank, greater
agricultural assets, such as land and livestock, coupled with
relatively abundant water resources.
However, the natural and acquired economic advantages of this
region have been steadily eroded since late 2000. Progressively
stricter mobility restrictions for people and vehicles have
rendered the Israeli labor and commodity markets considerably less
accessible since the beginning of the Intifada. Residents
interviewed in the border region say fear of confrontation has also
drastically reduced the numbers of Israeli shoppers in local
markets. The direct and indirect evidence suggests that the loss of
this access has now considerably impacted these communities.
Contributing to the economic downturn has been the destruction of
both private property and public infrastructure - some built with
donor assistance - in the context of military confrontation and
occupation. In a forthcoming report, the World Bank estimates that
until August 2002 such damage totaled more than US$725 million,
with US$110 million of that damage in the three northern
governorates. About 58 percent of this damage has been to
infrastructure, 23 percent to private property, and about 21
percent to agricultural land and assets. The destruction of such
income-producing wealth has further limited economic opportunities
for Palestinians. Repeated and extended curfews placed on towns and
villages in the north have also constrained economic
activity.
The Barrier: Its Course and Impact
Those communities trapped between the barrier and the Green Line
will suffer long-term damage to agricultural development and
restrictions on the use of water resources and livestock grazing,
coupled with increasing transactions costs. The barrier
construction process is having a major economic impact on the
surrounding area. Its immediate effects include: (i) destruction of
agricultural land and assets; (ii) inability to access agricultural
land and assets including water resources; (iii) added limitations
on mobility of people and goods and, therefore, higher transaction
costs; and (iv) uncertainty about the future leading to a dampening
of investment in economic activities, including agriculture.
Leveling of Land and Destruction of Agricultural
Assets
As of December 2002, physical destruction of agricultural lands and
assets had been documented in 53 communities in the Jenin, Tulkarm
and Qalqiliya areas. Direct damage to these particular communities
from barrier preparation and construction included the destruction
of some 84,000 dunums (8.4 square kilometers) of olive and other
fruit trees, 615 dunums of irrigated agricultural land (including
greenhouses), 37.3 km of water networks, 15 km of agricultural
roads, and the loss of other agricultural assets.
According to the Palestinian Agricultural Relief Comittee (PARC),
11 of these 53 border communities are going to lose 238,350 dunums
(238.3 square kilometers), land being isolated between the Green
Line and the barrier. These communities cultivate about 57 percent
of this land, mostly with olive trees and field crops.
Inaccessibility to Agricultural Land and Markets
In addition to these 11 communities, on the basis of research and
field work conducted by this mission, phase one construction
activities appear to be isolating another four communities between
the Green Line and the Barrier. This includes the towns' built-up
portions and most of their land. For the most part, the population
of these fifteen communities (approximately 12,000 people) have not
been separated from their agricultural land, but have been isolated
along with it. However, PARC estimates that 450 members of the
population derive their livelihood from land located east of the
barrier and an additional 20,000 people who own or derive income
from land located west of the barrier, reside in communities
located on the eastern side. To date, no formal provision has been
made by Israeli authorities for regular mobility for those
economically engaged on the other side of the barrier. Field
reports suggest some agricultural land near the barrier has been
declared a closed military zone, while other land is inaccessible
due to intimidation by armed guards protecting contractors working
on barrier construction sites.
The anticipated course of the barrier will leave an estimated
138,000 people in 16 additional localities surrounded on three
sides by the barrier and its associated "depth barriers." An
as-yet-unknown portion of cultivated land belonging to these and
other localities will also fall into such pockets. For these
communities, the likely economic impact has been (or will be) some
destruction of agricultural land and production assets as a result
of the barrier's construction and limited (if not lost)
accessibility to other assets. Mobility of people and goods will
suffer, raising transactions costs and also increasing uncertainty
about the feasibility of potential investments - particularly when
future profitability depends on mobility. Uncertainty regarding
future access to agricultural land poses particular dilemmas for
producers. These include questions of what, and even whether, to
plant, the amount of investment to make in agricultural activities,
and how to market output in the face of movement
restrictions.
In addition to the 31 communities identified, other communities
will be economically impacted by the barrier - losing land,
irrigation networks, or other infrastructure while it is being
constructed, or having a main (or only) access road cut by its
path. There are some 38 such communities, with a combined estimated
mid-2003 population of 73,000. Notably, the locations listed lie
within 1.5 km of the barrier. Other villages located further to the
east will undoubtedly also be negatively affected, deprived of
access to urban markets and services in areas closer to the
barrier.