Recent protests in Palestinian cities across the West Bank against increasing food prices are related to those elsewhere in the Middle East, including Israel. They are part of a global phenomenon where the cost of living and unemployment are rising at an alarming rate. However, Palestinians lack the basic freedom and autonomy to address this situation adequately. They rely on essential aid which is primarily necessary as a consequence of Israeli occupation and years of an asymmetrical peace process that has left them with little room for economic manoeuvre.
Back in 2008 the World Bank warned that addressing the inherent problems within the Palestinian economy would 'entail increasing the economic space available for Palestinians'. Four years on and the Bank is now forecasting a $1.5 billion deficit in the Palestinian Authority budget, with donor funds expected to cover just $1.14 billion of this shortfall.
Partly in response to this gloomy prediction, partly out of a fear that Palestinian protests will create serious unrest but also due to perennial political paralysis, the international community is increasing its aid disbursement in the area. The European Union recently announced new funding of €100 million for the Palestinians. This includes a package of support specifically to Area C: the 60% of the occupied Palestinian territory under direct Israeli control as laid out in the 1993 Oslo Accords. These new commitments are welcome and indeed vital.
In the short term aid is crucial to address the urgent needs of Palestinians living in poverty. However, it is essential to tackle the root causes of the problem and challenge the structures that keep people trapped in poverty and create the need for aid in the first place. This requires strong political will and conviction.
It is the Oslo Accords with their accompanying economic appendix, the Paris Protocol (which governs labour, trade, fiscal and monetary arrangements between the parties), that many Palestinians are now suggesting be scrapped. Oslo is synonymous with the two-state solution and has been promoted by most international governments, including the UK, which donates an average of £86 million per year to the Palestinians to support such a solution. However, the facts on the ground show that the World Bank's warning has not been heeded and a lack of economic space is still the critical issue.
Area C contains natural resources and land which are essential for Palestinian economic growth. It is virtually impossible for Palestinians and international donors to obtain building permits in this area but community buildings and essential infrastructure, such as water cisterns, are routinely demolished by the Israeli Authorities if they've been constructed without them.
Across this area, which includes east Jerusalem, there are more than 100 illegal Israeli settlements that are home to some 530,000 Israelis. 42.81 per cent of the West Bank has been allocated by Israel to regional settlement councils for settlement construction shrinking the space available for Palestinians to live and develop sustainable employment. The Jordan Valley demonstrates how the occupation undermines their basic rights and economic development.
It covers 28.8 per cent of the West Bank and is home to approximately 48,000 Palestinians together with 9,500 Israelis who live in 37 settlements. Israel has allocated 86% of the Valley to those settlements. Palestinian access to land and water resources is restricted throughout, as is movement. In 2011 alone, Israel demolished over 200 Palestinian structures displacing around 430 people. In total, 44 million m3 of water a year is allocated to fewer than 10,000 settlers living in the Jordan Valley and the northern Dead Sea area. This is almost one-third the amount of water accessible to the 2.5 million Palestinians living in the entire West Bank.
The vision for a two state solution appears to be illusory. Claims that Area C and the future of settlements are to be negotiated ring hollow to Palestinians who have witnessed, during the peace negotiations era, a doubling of the settler population. Couple this with the ability and willingness of Israel to withhold the taxes it collects on behalf of Palestinians and it is clear that economic dependency and continued occupation remain the reality.
The real challenge facing the donor community is to tackle what most recognise as a serious obstacle to peace: illegal settlements. In 2009 the UK Foreign Affairs Committee concluded that their expansion on the West Bank 'prejudices prospects for a two-state outcome, and that, as such, continued settlement activity must call Israel's commitment to such an outcome into doubt'. Neither repeated condemnation by the international community nor their illegal status under international law has prevented or diminished their expansion.
A new approach is urgently required that moves from routine declaration to concrete disincentives. The EU Heads of Mission in the occupied Palestinian territory, in a 2011 report proposed that the EU develop appropriate legislation to prevent and discourage financial transactions in support of settlement activity. Trade in settlement products perpetuates their existence by making them economically profitable. Christian Aid believes that they will continue to expand and develop unless action is taken that backs statements of condemnation and thus has called for the prohibition of goods from illegal settlements being sold in UK/EU markets.
In 2012 the World Bank reminds donors again that 'continuous growth in the size of land that is allocated for settlement activity within the West Bank has fragmented the territory into smaller and more disconnected enclaves'. Whilst aid is critical and making a difference to the lives of thousands of Palestinians it is clearly only part of the solution. Christian Aid believes that peace and prosperity require a long-term, just solution that ends occupation and guarantees viability for both Palestinians and Israelis. Viability includes the security and protection of rights for all, not least the economic right that can support the right of self-determination.