Top expert Sara Roy about realities in occupied Palestine:

[Introduction. Sara Roy, a Research Fellow at Harvard University's Center for Middle Eastern Studies, is the foremost American expert on the Palestinian economy and the author of The Gaza Strip: The Political Economy of De-development (Institute for Palestine Studies, 1995). She spoke at the Center for the Comparative Study of Development at Brown University's Watson Institute for International Studies on January 30, 1997. These notes of her talk were prepared by Stephen Shenfield, researcher at the Watson Institute and member of the JCOME Advisory Committee.]

On the basis of published and unpublished studies by the World Bank, the US State Department, ministries of the Palestinian Authority (PA), several UN agencies and various research institutes as well as my personal observations, I can say that economic, social and political conditions in the Palestinian territories have steadily and sharply deteriorated over the three years since the Oslo Agreement. Israel, now assisted by the PA, continues to pursue, and with great success, policies aimed at keeping the Palestinian economy weak and dependent.

According to the Oslo Declaration of Principles, the military law of the occupation remains the legal foundation of government throughout the transition period. Israel has a veto over all Palestinian legislation, and the PA is never allowed to harm Israeli interests in any way. The agreement says that Israeli security considerations override any other provision, and Israel uses this pretext to do whatever it likes, even when the matter at hand is quite unrelated to security -- for example, changing standards for agricultural produce. This may be against the spirit of the agreement, but technically Israel is allowed to do it.

The single most damaging measure Israel has applied has been closure. Since March 1993 closure has never been fully lifted. There have been four kinds of closure: 1. Total closure, in which the territories are completely sealed off. Just between January and November 1996, there were 15 periods of total closure, totalling 109 days.

2. General closure, entailing severe restrictions to the movement of people and goods.

3. Partial closure, in which restrictions are somewhat eased.

4. Internal closure, in which movement is blocked or restricted between one Palestinian town, village or area and another. This is a post-Oslo phenomenon: there was no such thing even at the height of the intifada. Two important examples:

* The West Bank is cut off from Jerusalem, its commercial center. Only 5% of Palestinians from the West Bank and Gaza are legally entitled to enter Jerusalem.

* Over the last year, Israel has blocked movement between the West Bank and Gaza. It is now virtually impossible. Even a Gazan with a permit to enter Israel for business is not allowed to enter the West Bank, and similarly a West Banker may be allowed into Israel but not Gaza.

There are numerous restrictions on foreign trade, which is completely controlled by Israel. Many businesses have failed.

Household income comes from three sources:

1. Traditional forms of wealth, mainly land and livestock 2. Remittances from Israel and abroad 3. Wage labor.

All three are in decline. Ownership of land and livestock is undermined by continuing expropriation. The settler population is planned to rise to 200,000 in the next four years. Tens of thousands of acres are confiscated to build by-pass roads serving the settlements. 44% of Gaza and 78% of the West Bank is now in Israeli hands.

29% of the current labor force of 540,000 are unemployed -- 18% on the West Bank and 30% in Gaza. During total closure, unemployment reached 50% on the West Bank and 70% in Gaza. This does not take under-employment into account. At the same time there is a noticeable increase in child labor.

Prior to the intifada, 120-130,000 Palestinians from the occupied territories used to work in Israel (80,000 from Gaza and 40-50,000 from the West Bank). At present, 40-44,000 Palestinians from the occupied territories are allowed to work in Israel (20-22,000 from Gaza and 20-22,000 from the West Bank). This number is subject to extreme fluctuation. Moreover, many of those with permits to work in Israel fail to find work, and many others find only part-time or sporadic work.

The PA employs 70,000 people. 40,000 of these are police and security forces. One sees armed police everywhere, wearing different color uniforms, driving their jeeps fast through villages and refugee camps to intimidate the inhabitants, just like the Israeli army did. The PA maintains a monopoly on the sale of 15 kinds of product, generating a profit of $2-300m per annum, part of which goes to pay the police and part into officials' pockets. The PA has made clear that it is not interested in economic reform or development.

Foreign assistance is directed to the PA (to cover running costs etc.), relief programs that provide immediate and short-term job creation (street cleaning etc.) and small to medium scale infrastructure. Very little is spent on health, education or development. As a recent internal report of the World Bank states, "the present situation is one of transition to an unknown destination." Such uncertainty makes all planning impossible. Investment is negligible. Structural degradation of the economy may prove irreversible unless addressed quickly.

Between 1992 and 1996, real per capita GNP in the Palestinian territories declined by almost 40%, from $2400 to $1500 per annum. In spite of an increasing proportion of income spent on food, food consumption is falling. While nutrition studies do not yet show starvation, malnourishment is a rapidly growing problem. Marasmus, a form of extreme malnutrition, was diagnosed in 100 babies from Jabalya refugee camp and Gaza City in 1995. However, I suspect that the situation is really much worse than these studies suggest. For a growing proportion of the population, probably the majority, diet is limited to bread, rice, vegetables and fruit. Household savings are depleted and household debt is rising. Utility bills are left unpaid. People sell off all their possessions, such as women's gold and jewellery, to buy food.

I now observe phenomena that I have never previously seen in the twelve years I have been visiting the occupied territories. There are cases of people selling their body organs to Israeli hospitals. Many survive by sifting through garbage for rotten food and sellable objects. Groups of women and children make the rounds of schools and offices begging for food and money. Even middle class women are now prepared to go begging. And on the West Bank there have been cases of husbands prostituting their wives -- an indicator of extreme desperation in such a traditional society.

The United Nations Relief Works Agency (UNRWA) supports 90,000 hardship cases in Gaza alone. The World Food Program increased its food distribution by 70% over the last year. But the number of hardship cases is growing so fast that the aid agencies are less and less able to cope. The resources available to them are likely to decline rather than increase, on the assumption that the Palestinian problem is on the way to being solved. The efficiency with which resources are utilized is also likely to decline as welfare functions are increasingly transferred to the corrupt and incompetent PA.

The aid agencies operate as if in a political vacuum. They know very well that Israeli policy is at fault and will admit it privately, but the donors will not publicly challenge the Israelis.

The political situation under the PA is now far worse than it was before Oslo. People are disillusioned, intimidated and -- in sharp contrast with the past -- depoliticized. Opposition to Arafat is not permitted. The political parties, which used also to fulfill important social functions, have been destroyed. Civil society is weakening. Israel pursued a policy of de-institutionalization and the PA is continuing this policy. Viable civic institutions continue to function but are under constant threat, especially those associated with the Islamic movement. The PA is clearly trying to eliminate indigenous institutions and replace them with its own.

Family and community structures having broken down, people seek individual not collective solutions. This is a traumatized population, especially the children and young adults. Some of these kids have been given uniforms and guns. I expect much more violence from the extremists on both sides. Violence is often the only option for the hopeless.

An Israeli economist (who does not want to be identified) told me: "The Palestinians paid as much for the Oslo Agreement as they did for 1948."

What are the goals of Israeli policy? I think the Israelis are very myopic. Their main immediate goal is to destroy the social, economic and political structures that could provide the basis for a viable independent Palestinian state, to preclude the emergence of such a state and to keep the Gaza Strip and the West Bank economically weak, integrated into and dependent upon Israel. They also want to keep the two populations, Israeli and Palestinian, separated from one another.

What needs to be done? It is the US that possesses the greatest leverage on Israel. Above all, there is a need for public activity to change public opinion here in the US.

Sara Roy asked that the following two points be added to Stephen Shenfield's notes of her presentation at Brown University:

1. A key source used and cited by the author was Salam Ajlouni, Economic and Social Conditions in the West Bank and Gaza Strip, Quarterly Report, Office of the Special Coordinator in the Occupied Territories, Gaza, 29 October 1996.

2. In the last paragraph that refers to Israeli goals, Sara Roy did not state that Israel's "main immediate goal is to destroy the social, economic, and political structures that could provide the basis for a viable independent Palestinian state."   Sara Roy did state that Israel's "main goal is to preclude the emergence of a sovereign and viable Palestinian state by keeping the Gaza Strip and West Bank economically (and politically) weak, integrated into and dependent upon Israel.   Another goal is to keep the two populations, Israeli and Palestinian, separated from one another."