United Nations Seminar on Assistance to the Palestinian People (Cairo, 6 and 7 February 2012) - Report - DPR publication

UNITED NATIONS SEMINAR ON ASSISTANCE

TO THE PALESTINIAN PEOPLE

The economic cost of continued Israeli occupation of the Palestinian Territory;

local, regional and international efforts towards mitigating it

Cairo, 6 and 7 February 2012

CONTENTS

Executive summary

The theme of this year’s Seminar on Assistance to the Palestinian People revolved around the economic and humanitarian impact of the Israeli occupation on the West Bank and Gaza. Participants reviewed substantial evidence that the settlements, the 700-kilometre-long separation wall, forced displacements and demolitions, confiscation of land, restricted access to natural resources, obstacles to Palestinian movement in the West Bank, including in East Jerusalem, restricted access to the Dead Sea and the blockade in Gaza, deprived the Palestinians of significant revenue sources and growth opportunities. In 2010, the overall cost of the occupation to the Palestinian economy was estimated at nearly $7 billion, or a staggering 84.9 per cent of the total estimated Palestinian gross domestic product (GDP).

Participants stressed that it was important to document such socio-economic damage done by the occupying Power to the Palestinian people, noting that other costs should also be quantified, such as the cost of the fines imposed on the Palestinians, the cost of the use of occupied and exploited land, the compensation for Palestinian prisoners in Israeli jails and the cost of the environmental degradation. While all agreed that both compensation and restitution were important, some participants stressed that restitution was essential as land had to be returned to their owners as a matter of priority, while the issue of compensation could be addressed at a later stage. Others argued it would be counter-productive to wait with the assessment and demands for compensation until the occupation ended, and that in formulating policies towards the Palestinian population, the Israeli Government and Israeli society must be made aware that their actions carried consequences.

Discussing the role of the international aid and development community in mitigating the consequences of the occupation, it was stated that occupation and development cannot co-exist. Experts argued that aid would have an impact only when it was coupled with a clear political agenda in pursuit of a just peace settlement, based on international law. Participants stated that donors should not just focus on operational and technical issues of aid delivery, continuing to pay the bulk of the costs of the occupation to the occupying Power. They should face and deal with difficult political issues of how best to tackle the illegal and destructive policies at play in the Occupied Palestinian Territory. Donor policies needed to be revised, in order to connect the political and development imperatives, and assist the Palestinian people in the establishment of their independent State.

It was concluded that the estimated nearly $7 billion annual cost of the occupation meant that, if the occupation ended, the Palestinian people would have sufficient financial resources to be self-reliant and govern themselves as a viable State with strong institutions. Looking at further ways of ensuring socio-economic viability of the future State of Palestine, participants stressed the importance of establishing a stable connection between the West Bank and Gaza, removing the barriers to trade, revitalizing the Gaza and East Jerusalem’s economy within the broader national economy, as well as reintegrating the Palestinian economy within the economy of the region.

I. Introduction

1. The United Nations Seminar on Assistance to the Palestinian People was held in Cairo on 6 and 7 February 2012, under the auspices of the Committee on the Exercise of the Inalienable Rights of the Palestinian People (hereinafter referred to as “the Committee”) and in accordance with the provisions of General Assembly resolutions 66/14 and 66/15 of 30 November 2011. The theme of the Seminar was “The economic cost of continued Israeli occupation of the Palestinian Territory; local, regional and international efforts towards mitigating it”.

2. The Committee was represented at the Seminar by a delegation comprising Abdou Salam Diallo (Senegal), Chair of the Committee; Zahir Tanin (Afghanistan); Pedro Núñez Mosquera (Cuba); and Riyad Mansour (Palestine). The Seminar consisted of an opening session, three plenary sessions and a closing session.

3. The themes of the plenary sessions were: “Israeli occupation as the paramount obstacle to socio-economic development in the West Bank and the Gaza Strip”, “Quantifying the cost of the occupation”, and “Offsetting the cost of the occupation while preparing for independence, sovereignty and sustainable development”.

4. At the Seminar, presentations were made by 14 experts, including Palestinian and Israeli experts. Representatives of 52 Governments, Palestine, 5 intergovernmental organizations, 12 United Nations bodies, 18 civil society organizations, 31 media outlets, and special guests and members of the public attended the Seminar.

5. The Summary of the Chair on the outcomes of the Seminar (enclosed herewith as annex I) was published shortly after the Seminar concluded its work, and is accessible at the website of the Division for Palestinian Rights, of the United Nations Secretariat, at www.un.org/depts/dpa/qpal/calendar.htm.

II. Opening session

6. The Seminar opened with the statement of Ahmed Fathalla, First Under-Secretary at the Ministry of Foreign Affairs of the Arab Republic of Egypt, who reaffirmed his Government’s unwavering support to the Palestinian people’s rights aimed at achieving a just peace, ending the occupation and restoring unity. Drawing attention to the recent Egyptian revolution, he said that the new Egypt was an integral part of the Arab popular movement and a model for other popular movements to advocate fundamental principles and values. The revolution has set the path to democracy, progress, the respect of human rights, and laid the very foundation of Egypt’s relationship with the rest of the world. Israel should be aware of, and should respond to and not resist, that change, he said. All parties needed to fully adapt to the transformation of the political map in the region, and act in acceptance of that change.

7. Mr. Fathalla expressed the hope that change in the region would eventually be in favour of the Palestinian people and their legitimate cause, since the alternative was the worst-case scenario in which no country had any interest. In order to avoid that worst-case scenario, he said, the international community had to take a crucial decision this year: reaching a final settlement. Rather than duplicating efforts, and wasting opportunities in individual frameworks and initiatives, it was necessary to integrate all those efforts in an overarching approach, in an international meeting or conference that would lead to a specific outcome, a final solution for the Palestinian people, backed by the peoples of the Arab region, and accepted by any other parties, not only for the individual, but rather for the collective interest. Speaking on behalf of the Egyptian presidency of the Non-Aligned Movement, Mr. Fathalla reiterated the Movement’s support for the Palestinian people and said that restoring their legitimate rights was a priority.

8. Maxwell Gaylard, Deputy United Nations Special Coordinator for the Middle East Process and United Nations Resident and Humanitarian Coordinator for the Occupied Palestinian Territory, speaking on behalf of United Nations Secretary-General Ban Ki-moon, said that occupation measures that stifled Palestinian life must be rolled back, and that the status quo was unacceptable and only guaranteed continued conflict and suffering. He noted that the issue of settlements, which were illegal and hampered the prospects for a negotiated solution, clearly had an economic dimension, severely restricting access to land and natural resources by the Palestinian people. Israeli restrictions on free movement remained another vast impediment to Palestinian economic viability in the West Bank, he added.

9. Furthermore, the Secretary-General called for immediate action on the closure of the Gaza Strip in line with Security Council resolution 1860 (2009). The full opening of legitimate crossings for the import of construction materials was critical for Gaza’s economic recovery, and would enable badly needed reconstruction activities, he said. Exports, a critical component of any economy, should be allowed to resume at scale, including transfers to the West Bank and Israel. All these policy changes can be implemented with due consideration for Israel’s legitimate security concerns, while making a significant difference in the lives of many ordinary Gazans, he pointed out. Noting the fragile financial situation of the Palestinian Authority,

Mr. Ban stressed that continued shortfalls could challenge the impressive progress in Palestinian institution-building, and called on the donors to deliver their 2012 contributions to the Authority as soon as possible.

10. The Secretary-General remained hopeful that the momentum created by the start of direct talks in 2012 between the parties to the Israeli-Palestinian conflict would ultimately lead to serious negotiations based on comprehensive proposals on territory and security, and an agreement for a two-State solution by the end of the year. The Palestinian Authority has built the institutions essential for a functioning democracy and a future Palestinian State, he said, and now was the time to build on that progress, where Israel could make a critical contribution to consolidating these achievements and preparing the ground for a negotiated, two-State solution. The Secretary-General therefore urged the parties to refrain from provocative action and do their utmost to resolve all permanent status issues, leading to the end of the conflict and the establishment of an independent, democratic and viable Palestinian State living side-by-side in peace with a secure Israel, and with Jerusalem as the capital of two States.

11. Abdou Salam Diallo, Chair of the Committee on the Exercise of the Inalienable Rights of the Palestinian People, called for a change in “the cost-benefit calculus for the occupation”. Palestine was among the world’s top aid recipients solely because for decades the Israeli occupation had been starving the Palestinian economy of land, investments, natural resources, markets and opportunities, he said. He recounted that more than 40 per cent of the West Bank was off-limits to Palestinians, serving the needs of half a million Israeli settlers; the separation wall was poised to swallow up a further 9 per cent of the territory; housing demolitions and evictions had doubled; and settler crimes and vandalism were up 40 per cent. Israel was blocking Gaza exports and vital imports, preventing the rebuilding of its devastated economy and fragmentation and restrictions plagued the West Bank, he said. As a result, the international assistance which was expected to bolster the peace process and prepare the Palestinian economy for independence was often spent to mitigate the humanitarian crisis, fill budget gaps, and undo the damage caused by the occupation, he said.

12. Mr. Diallo stressed that the economic vulnerability was handicapping Palestinians in the diplomatic arena, making it more difficult to break free of the occupation. Israel, meanwhile, was reaping all the benefits of the occupation: a captive market, cheap labour, natural resources, and land, to further its colonial project. However, Israel was insulated from the economic costs, which were borne by the Palestinians and the donor community. The good news was that the Palestinian leadership, aware of the pitfalls, was doing something about it, said Mr. Diallo. Recent initiatives to boost domestic revenues were a step towards eliminating the need for external budgetary assistance.

13. However, that does not mean that assistance to the Palestinians was becoming less important; on the contrary, the need was becoming greater, he said. What was needed was the type of assistance which would promote self-reliance, stimulate rather than crowd out private investment, and empower Palestinians. Robust engagement on the part of the donor community would be of key importance. Mr. Diallo stated that the Gaza blockade must be lifted completely, and measures of the occupation in the West Bank must be reversed, including a complete stop to all settlement activity. The Palestinian revenues should be safeguarded against politicized manipulation by Israel. At the same time, he urged the donor community to maintain its focus and respond generously to the 2012 Humanitarian Appeal launched by Mr. Gaylard, and to the emergency appeal by the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

14. Ali Al-Jarbawi, Minister for Planning and Administrative Development of the Palestinian Authority, speaking on behalf of Palestinian Authority President Mahmoud Abbas, posed a question how the economic costs for usurping a nation from its people could be calculated; how could one calculate the economic cost of the humanitarian plight for a victim living under occupation for 44 years. As a Palestinian citizen living under occupation since age 13, how could he calculate the cost? Every Palestinian needed to make that calculation, but the matter surpassed economic and all other costs, he said.

15. Mr. Al-Jarbawi argued that the international community should practice that right and not just keep talking about it; it must take effective steps to end the occupation. It was regrettable and shameful that, at the start of the twenty-first century, the domination and occupation persisted, he said. The world must deal with and discuss the occupation and the ways and means to end it promptly to enable the Palestinian people to practice their simple humanitarian, political and natural rights – to live in freedom and dignity in an independent and sovereign State.

16. Further, in a keynote address, Mr. Al-Jarbawi summarized the main developments in the Arab world over the past year, which, he said, would define the region’s politics for years to come. He described the steps the Palestinians had taken last year towards full United Nations membership, but said that, sadly, those had not translated into an endorsement by the United Nations Security Council as the State of Palestine. Recognition of statehood was fundamentally a political process and not a technical one and ending an occupation did not even require a certain level of development; however, the quest did not mean much if the occupying forces “do not want to let go”. At the same time, the recognition of Palestinian statehood was not just a symbolic act; it would cease all violations of human rights and international law that were part of the daily life in the Occupied Territory, including in the West Bank, Gaza and Jerusalem. Concluding, Mr. Al-Jarbawi said that if everyone was serious about a two-State solution, then the fragmentation of Palestinian lands into areas A, B and C needed to be overcome. That situation was “apartheid reborn”; Palestinian children should never know about areas A, B and C, but only about the State of Palestine.

17. In an ensuing discussion, a representative of Palestine spoke of the basic elements required for economic growth, which included full control by the Palestinians over their natural resources, as well as freedom of movement of both people and goods, including imports and exports. That would make the climate conducive for investment, he argued. Political stability was also required for any sustainable social and economic growth. He noted that settlers were using water and land resources that belonged to the Palestinian people.

18. A representative of Turkey said that the international community, particularly the members of the Security Council, should not fail to support the legitimate call for Palestinian statehood. The Israeli-Palestinian negotiations should take place on equal footing, which currently was not the case, he believed, calling for the United Nations to play a decisive role in correcting such a lopsided situation. In the meantime, it was important to continue the support to Palestinian state institutions, he said, and provided a brief account of Turkey’s efforts in this direction. He also commended Palestinian Authority President Abbas and the leadership of Hamas for their national reconciliation efforts.

19. The representative of the League of Arab States (LAS) recalled that Israel had been established by a decision of the United Nations, yet it did not respect the Organization’s resolutions. Thus, the international community had a responsibility to urge the implementation of relevant resolutions and stop the vicious cycle of demolitions and destruction. He also noted that Palestinians were forced to buy water and electricity from Israelis at exorbitant prices.

20. A representative of Indonesia highlighted the unbearable economic and humanitarian predicament. The blockade, he said, made it impossible for the massive reconstruction required in Gaza, where hospitals, businesses and schools remained in ruins. The separation wall was part of Israel’s deployment of physical obstacles, as was the use of complicated permit requirements, especially in and around East Jerusalem. Together, those developments had not only worsened the humanitarian situation in the Occupied Territory, but had sown the seeds of deeper misery. Private businesses had continued to shut down at a fast pace, leading to greater unemployment and disillusionment. Despite all that, the Palestinians had continued their historical State-building programme, for which they should be heartily commended.

21. A representative of the Organization of Islamic Cooperation (OIC) pointed to Israel’s continued violation of international norms and obstruction of all efforts to achieve the two-State solution by continued settlement construction. The occupation forces attacked holy sites and attempted to Judaize Jerusalem and isolate it from the rest of the Occupied Territory. He called on the international community to pressure Israel to lift the Gaza blockade and allow construction and medical supplies through, and on donors to help the beleaguered enclave. The situation had become more urgent than ever, and the international community should assume direct responsibility for finding a just and permanent solution. The lack of a solution would destabilize the region and jeopardize international peace and security, he said.

III. Plenary sessions

A. Plenary I

Israeli occupation as the paramount obstacle to socio-economic development

in the West Bank and the Gaza Strip

22. The speakers in plenary I addressed the following sub-themes: “The impact of Israeli policies and practices on the socio-economic situation in the West Bank: restrictions on movement and access; displacement, dispossession and demolitions in East Jerusalem and Area C. The economic impact of settler violence”; “The impact of the occupation on recent economic achievements in the West Bank”; “The socio-economic impact of the blockade of the Gaza Strip”; and “Unilateral economic measures as a means of political and economic coercion in the Occupied Palestinian Territory”.

23. Mr. Maxwell Gaylard provided a snapshot of the situation through a “United Nations lens”. Although there were some 23 or 24 entities of the Organization operating in support of the Occupied Palestinian Territory, little analysis was available on what was happening socio-economically in Jerusalem or the West Bank, he noted. What was obvious was that in the West Bank, the occupation added up to a lot of Israeli troops and border police. Closely related to that, in area C, comprising nearly 62 per cent of the West Bank, land was under the full control of Israel, which maintained an “obvious” presence. He said that settlements were “big cities”; “they’re no joke, they’re well and truly there”. The International Court of Justice said Israel had a right to defend itself, ruling that the separation wall should be the length of the Green Line, or 400 kilometres, which made the current wall 300 kilometres longer than stipulated. The separation forced Palestinian farmers to line up at 5 a.m. to cross the barrier to their fields to pick olives, and line up again at 5 p.m. to get back. Those Palestinians caught on the Israeli land numbered in the tens of thousands, and their standard of living was dropping, in some cases, catastrophically. A more odious fallout of this situation was settler violence, with Israeli settlers basically attacking the Palestinians next door. For Palestinian farmers, 10,000 olive trees had been poisoned or cut down in 2011; each worth more than $1,000, amounting to an estimated

$1 million loss, Mr. Gaylard said.

24. The United Nations also considered Gaza to be under occupation; it was true that the settlers had left in 2005 and that there was no permanent Israeli military presence there, continued Mr. Gaylard. However, when one stood on the beach and looked out to sea, one could see the Israeli Navy not three miles away. Maritime restrictions had ruined the local fishing industry. The airspace was also completely controlled by Israel, as jet fighters crossed regularly, and blimps or drones hovered over Gaza. People said Gaza was an “open-air prison”, and he agreed. Many Gazans simply could not get out. Gaza and the West Bank were territorially divided, which significantly hampered the socio-economic development of a State. Calling for the lifting of the Gaza blockade, he said, “let the trade flow; let the Government of Israel look to its security concerns, but not simply lock it [Gaza] up”.

25. Concluding, Mr. Gaylard reiterated that the United Nations regularly pointed to the fact that the Palestinians were more than capable of looking after their own affairs, whether political, economic or social. The Palestinian people were highly educated, innovative, and entrepreneurial – there was no good reason why they could not run their own affairs, he said. The only reason was the occupation.

26. Alex Pollock, Director of Microfinance Programme at UNRWA, said that for up to 20 years, the occupation had ensured that the Palestinian economy had not taken off. The Oslo Process created significant conditions for positive change, which altered the landscape for Palestinian people, particularly in Gaza. But at the same time, Oslo had created a nexus of dependency, in the form of a tripartite relationship between the Palestinian Authority, the donor community and Israel, with Israel being a significant force in that relationship. As a result, in 2011 only 35 per cent of the Palestinian Authority’s budget came from domestic revenues; the remainder was under the control of the Israeli authorities. So while the Oslo architecture had significantly unburdened the occupying authorities, the bulk of the costs in fact got transferred to the donor community.

27. Despite being in such a subordinate position, the Palestinians continued to manufacture, trade and farm, Mr. Pollock continued. But it was not possible to have development under occupation, only a dependency. Permission was required for everything; occupation ran through every aspect of life. In fact, the occupation had “always run at a profit”. He cited as an example Israel’s initial occupation of Gaza and the West Bank and Jerusalem in 1967, when it immediately integrated a huge Palestinian labour force into Israel as a workforce – “so Israel ran the occupation at no cost, while it continued to prevent the development of Palestinian industry”.

28. The Palestinian Authority was in a very fragile situation tied to a complex diplomatic process which was not always in the interest of the Palestinians, Mr. Pollock said. Israel often had significant leverage, which meant it could disrupt the Authority at any time. Another aspect of such a set-up was that the Authority had been running on a significant budget deficit of more than $1 billion a year. Most of that was picked up by the donor community, which had allowed the Palestinian Authority to create massive improvements in the lives of the Palestinian people throughout the West Bank and Gaza. But that was a diplomatic relationship, which could change along with changes in strategic policies. As a result, the Palestinian Authority’s standing today was a one-way-street dependency on western Governments.

29. Ramesh Rajasingham, Head of Office at the United Nations Office for the Coordination of Humanitarian Affairs in the Occupied Palestinian Territory, discussed the humanitarian impact of the occupation in Gaza and the West Bank. The Palestinian community, he said, had the capacity, organization, motivation and will to fully and independently develop its territory. At the core of the problem was the situation emanating from international law violations within the occupation. Mr. Rajasingham illustrated the effects of Israeli “illegal” policies by air, land and sea, which, he said, placed enormous physical and administrative restrictions on the Palestinians. He noted that closure policies had been in place since the early 1990s, with restrictions that also dated back more than 20 years. In Gaza, their severity meant that the average Gazan was unable to provide for his or her family. Israeli-imposed access restrictions delved 1.5 kilometres into Gaza, which severely impacted life there and rendered 35 per cent of extremely arable land unavailable for cultivation as it had been levelled by military operations.

30. As for restrictions at sea, Mr. Rajasingham said they had severely eroded the fishing industry and contaminated the main food source for Gazans, making them dependent on food aid. Despite measures to ease the blockade in 2010, the situation remained “extremely fragile”, as only 40 per cent of imports from 2007 levels were allowed in, and exports were at a minimum — limited to agricultural products to Europe. Thus, Gaza could not meet most of its infrastructure and reconstruction development needs. The situation in the labour force was similarly dire, especially among youth and refugees, he said. Gaza remained isolated from the rest of the Occupied Territory. There were some 200 to 300 illegal crossing tunnels operating between Egypt and the Occupied Palestinian Territory at the Gaza border; however, there were serious safety concerns and the tunnels in no way substituted for the reopening of the crossings.

31. In the West Bank, Mr. Rajasingham said, the occupation affected 60 per cent of the population in area C, and there had been a 20 per cent increase in new settlements on the eastern side of the planned route, meaning on the “wrong side” of the separation wall. There were more than half a million settlers in the West Bank, including in East Jerusalem. Forcible displacements of children from demolitions represented an 80 per cent increase over last year, and more than 60 per cent of this year’s demolitions had occurred in areas allocated to settlements. Israeli settlements received preferential treatment in terms of allocation of water, law enforcement, and other services. By the end of 2011, there were more than 500 obstacles to Palestinian movement in the West Bank, excluding Hebron. Those included earth walls, barriers and trenches. Some 200,000 Palestinians had to use detours, taking five times longer to access schools, jobs and relatives. The situation was equally bad in East Jerusalem, where only a 13 per cent area remained for Palestinian construction, every square inch of which was already full. Almost 90,000 Palestinians were at risk of housing demolitions. The 2012 consolidated appeal for 150 projects was a manifestation of policies and measures of the occupation.

32. Picking up on the point that there was no access for Palestinians in Gaza, affecting fishing, farming and international trade, was Hanan Taha, Chief Executive Officer at the Palestine Trade Center in Ramallah and Gaza. She recalled that although the strict blockade on Gaza started in June 2007, trade and movement access was heavily restricted long before that. Despite interim agreements and memorandums of understanding, no safe passage between the West Bank and the Gaza Strip for goods, vehicles and persons was currently in place. Six terminals at Gaza’s borders with Israel, which were used for people and commodities crossing between Israel and the West Bank, were also now closed or had limited accessibility.

33. Ms. Taha presented the findings by her Center, which indicated that 38 per cent of Gazans lived in poverty, with 26 per cent unemployed, more than half “food insecure”, and more than 75 per cent receiving aid. The Gazans were unable to provide for their families and the quality of infrastructure and vital services had deteriorated. Despite measures taken to ease the blockade in June 2010, imports were still less than 40 per cent of pre-2007 levels, and exports remained tightly restricted and limited to agricultural produce to Europe. Gazan businesses could not access their traditional markets in Israel and the West Bank, and access to land and sea remained highly restricted. Additionally, she said, only a minority of the projects aimed at improving housing and vital services in Gaza had been approved by the Israeli authorities, and implementation of those approved faced funding shortages and limitations in capacity posed by the single crossing for goods.

34. Civilian casualties resulted from armed clashes during efforts to enforce restrictions, and thousands of people, many of them children, risked their lives smuggling goods through the tunnels under the border with Egypt every day. The closures had also had a major impact on the water supply and the electricity production; power cuts and the lack of diesel for generators had undermined the water distribution and the pumping to household reservoirs. Among her recommendations was removing the barriers to trade and market entry; allowing free access to goods and people; revitalizing the Gaza infrastructure and the private sector; reintegrating the Gaza economy with that of the West Bank; and re-opening the Israeli market for Gaza products.

35. Significantly constraining the development of the Palestinian national economy, said Mahmoud A.T. Elkhafif, Coordinator at the Assistance to the Palestinian People Unit of the United Nations Conference on Trade and Development (UNCTAD) in Geneva, was the growing physical and demographic separation of East Jerusalem from the rest of the Occupied Palestinian Territory. The viability of a future independent Palestine depended, among other things, on reintegrating East Jerusalem’s economy within the broader national economy and allowing it to reassume its historic pivotal economic role. Rehabilitating and restructuring the fragmented East Jerusalem economy called for a significant national and international effort in the coming years to reconnect it to the Palestinian Territory through better integration of trade, labour and financial markets.

36. Another major source of Palestinian fiscal instability was rooted in the Israeli control of the tax and customs clearance revenue it collected on behalf of the Palestinian Authority, which accounted for 60 to 70 per cent of total Palestinian revenue, he pointed out. Had the Palestinian Authority also collected taxes on the so-called “indirect imports” – goods not labelled as destined for the Palestinian Authority and imported and resold by Israel in the Palestinian Territory – clearance revenue could have increased by $500 million – more than 8 per cent of gross domestic product and 25 per cent of public revenue. The additional revenue would have covered one third of the budget deficit in 2008. Therefore, the entire revenue collection and clearance arrangement currently in place needed to be reconsidered in order to overcome the information asymmetry between the two sides, he said.

37. Overall, and according to UNCTAD estimates, between 2000 and 2005 the cumulative gross domestic product loss to the Palestinian economy caused by Israeli policies was $8.4 billion, or twice the size of the Palestinian economy in 1999, said Mr. Elkhafif. In fact, the economy lost more jobs than it generated in 2005. The separation barrier had caused the loss of one fifth of the West Bank’s agricultural land, and the economic losses incurred by the Israeli military campaign in December 2008 on Gaza were estimated at about $4 billion — almost three times the size of Gaza’s economy.

38. During the lively discussion that followed, speakers talked of the “safe passage” as an obligation to which Israel had committed in various agreements. It was not about generosity, one asserted, but about obligation – 15 years overdue. The new border crossing, said the speaker, was not actually within Gaza but in Israel and had turned the Strip into an island. Israel was either trying to open one crossing and close all others or create an island under Israeli army control, with only one highway or bridge as the passageway for imports or exports. Even now, 24 per cent of Gaza was restricted; anything that moved in this area was “shot, killed, or destroyed”. The United Nations was called on not to force Palestine to accept bilateral negotiations with Israel. Jerusalem, water, security, borders, they said, were all regional, and not bilateral, issues.

39. A representative of Palestine asked when the international community’s statements on the wrongdoings and violations of Israel would turn into actions. The participant urged the United Nations to assume responsibility and stand up in the face of the status quo.

40. As an international law professor, said another participant, it was very difficult to explain to students how Israel was allowed to be an outlaw nation. He hoped the United Nations would respect fundamental international law, breached by Israel both in times of war and peace. Also, he noted he had not heard of any action against Israel by the International Criminal Court and he wondered why not.

41. The Israeli occupation used all ways and means to break down the Palestinian people, said another participant. The Palestinian economy lost millions of dollars due to unemployment and poverty as a result of the occupation. A concern was expressed about the future sovereign State of Palestine in the face of depleted natural resources owing to the occupation.

42. Addressing such points of frustration, Mr. Gaylard replied that unfortunately, international law was only as strong as the Member States of the United Nations wanted it to be, and that came down to the General Assembly and the Security Council. Civil servants, he said, “can do some things; can’t do others”. They certainly could not force Governments to do what they were not doing. What civil servants could do was watch, witness, monitor, report and condemn. He said the Secretary-General had often spoken out in relation to the Occupied Palestinian Territory. Just recently, in Lebanon, he had been asked about settlements and he had said, simply, in one line that settlements, whether new or old, were illegal. “As United Nations civil servants, we haven’t got an army to back us up, but we do speak”, he said, adding that this Seminar was part of that process, “very much so”. Without the violations, without the settlements, this forum would not be needed, but for the moment, it was, he concluded.

B. Plenary II

Quantifying the cost of the occupation

43. The speakers in plenary II addressed the following sub-themes: “The West Bank: costs incurred due to import and export restrictions, and obstacles to the movement of goods and labour. The impact of the separation wall”; “The costs of the settlement project”; “Costs of the blockade on the Gaza Strip”; and “Loss of revenues due to Israeli control over and exploitation of natural resources in the Occupied Palestinian Territory”.

44. The restrictions imposed on the Palestinian people, reflecting an “unchanged colonial attitude of Israel” and in place since the start of the occupation in 1967, said Jad Isaac, General Director of the Applied Research Institute in Bethlehem, now an advisor to the Palestinian negotiating team on final status issues, were the main impediments to any prospects for a sustainable Palestinian economy. Israeli policy sought to exploit Palestinian natural resources, including land, water and minerals, for its own economic benefits and was reflected in a series of policies related to customs, transportation and infrastructure, which had prevented the development of a competitive Palestinian production and service industry. Today, he said, those restrictions had deepened further and, according to 2010 estimates, they were almost equal to the value of the entire Palestinian economy. The total measurable cost imposed by the Israeli occupation on the Palestinian economy was $6.897 billion in 2010, or a staggering 84.9 per cent of the total estimated Palestinian GDP.

45. In other words, had the Palestinians not been subjected to the Israeli occupation, their economy would have been almost double in size than it was today. Not only did the occupation keep the Palestinian economy small, he said, but it also hindered Palestinian fiscal balance by reducing its revenues: directly, by preventing an efficient tax collection due mainly to the prohibition of the Palestinian Authority to operate at the international borders; and indirectly, by artificially reducing the size of the Palestinian economy and, therefore, its tax revenue base. Without the occupation, the Authority would run a healthy surplus without need of donor aid and be able to substantially expand fiscal expenditures to spur further social and economic development.

46. Mr. Isaac observed that the majority of the occupation costs did not have any relationship to security concerns, but rather came from the heavy restrictions imposed on the Palestinians in the access to their own natural resources, many of which were exploited by Israel itself. More than $4.5 billion per year, a full 56 per cent of GDP, was the cost, in terms of both foregone revenues and higher costs of raw materials, for the Palestinians’ lack of access to their own resources. He described the huge costs of the Gaza blockade, which, he said, were determined by a myriad of Israeli restrictions, including the almost complete closure to international trade, the disruption caused to electricity production, the limited access to the sea resources and the continued shelling of infrastructure. Mr. Isaac believed that despite the magnitude of the overall estimated amount of the loss he presented, this number was likely to be a severe under-estimation of the real costs imposed by the occupation on the Palestinian economy, due to data limitations.

47. The confiscation of land and water resources and the mass uprooting of olive trees, said Shir Hever, economic researcher at the Alternative Information Center in Jerusalem, addressing the Seminar by Skype, had crippled the Palestinian agricultural sector, which currently could not even meet the food requirements of the Palestinian population itself, let alone export agricultural produce in order to draw much-needed foreign currency into the Palestinian economy. He said the Palestinian industrial and financial sectors also remained stunted, because Israel implemented countless policies to prevent their development. The result had been the Palestinian’s high level of dependency on the Israeli market in those sectors. And, the Palestinian commercial sector had been severely restricted by Israel’s limitations on movement. There was no question whether the damage to the Palestinian economy by Israeli occupation was significant, he said; the question was how to measure it properly.

48. A calculation of the damage inflicted by Israel must be accompanied with a legal and political effort to demand full restitution to the victims, Mr. Hever argued. The Israeli occupation was a highly political issue, and the reasons for measuring the damage inflicted by Israel on the Palestinian population were not mere academic curiosity, he said. Israel was morally obligated to compensate the Palestinians for the damage caused. Crimes committed against the occupied population must be punished, and the victims deserved restitution.

49. It would be counter-productive to wait for the assessment and demands for compensation until the occupation ended, although the damage continued to accumulate for as long as the occupation persisted, he said. The Israeli Government and Israeli society must be made aware that their actions carried consequences, and must consider future compensations for the damage when formulating policies towards the Palestinian population. A realization that Israeli citizens would be required to pay for the damage which they inflicted might hasten the end of the occupation, or at the very least reduce the number and scale of Israeli attacks, sanctions and restrictions against Palestinian people, Mr. Hever said. Furthermore, the demand for compensation served as a deterrent to all countries not to occupy their neighbours and to respect international law, he concluded.

50. Tarik Alami, Chief of the Emerging and Conflict Related Issues Section at the United Nations Economic and Social Commission for Western Asia (ESCWA) in Beirut, discussed the socio-economic impact of Israeli occupation and the move towards an independent State of Palestine. He noted that most of his data was collected from different United Nations agencies working in the Occupied Palestinian Territory, as well as from the Palestinian Authority and its Ministry for Planning and Administrative Development. He said the main cause of the socio-economic and humanitarian plight of the Palestinian people was the Israeli occupation. Israel had established a regime of occupation that was manifested in a series of unlawful and internationally prohibited measures, including excessive use of force and detentions, land and property confiscations, the demolition of structures and homes, and population displacements.

51. Similarly, documenting the situation in East Jerusalem, he noted the number of displacements and limitations on Palestinians’ ability to construct there; as a result, almost 60,000 were under threat of becoming homeless. At the same time, there were almost 517,000 settlers in 144 settlements and 100 outposts in the Occupied Palestinian Territory as of the middle of 2010. The Israeli settler population growth rate in the Occupied Palestinian Territory had more than doubled since 1992. In 2011, the rate of construction in Israeli settlements on occupied land had doubled that of the construction within Israel, he noted. There was an alarming trend of increasing settler violence and attacks on Palestinian property and crops. In fact, those attacks had doubled in 2010 from the previous year, including on medical and educational facilities.

52. He said the truth was that the Palestinians as a society and economy, for more than four decades, had been detached from their Arab neighbours, so it was natural for them to seek a “vital lifeline” in the region. Public opinion was supportive of the Palestinian peoples’ plight. While international support and donor aid was often subject to political considerations, Arab countries, civil society and the private sector could provide such support “with no political strings”. In that vein, he highlighted the importance of civil society and private sector partnerships, as well as the role of the United Nations in the reintegration – to encourage those partnerships and provide platforms for forging and nurturing them, while providing some seed funding and projects.

53. Iman Jabbour, Research Director at Gisha – Legal Center for Freedom of Movement in Tel Aviv, focused her remarks on the impact of restrictions of movement on goods and people in Gaza and highlighted examples of Palestinian people’s resilience. She reviewed the history of the region and Israeli policy of permits for Gaza and the West Bank between 1972 and 1991, noting that the Israeli economy was more developed and dependent on technology, whereas the Palestinian economy was dependent mostly on agriculture. That made its integration difficult, especially given Israel’s control of the Palestinian economy. Following the first intifada, Israel had cancelled all permits, even for workers, and unemployment had risen dramatically, more than doubling in Gaza. In September 2007, Gaza had been declared a hostile entity and numerous restrictions were applied. Israel then shrunk the entry of goods into Gaza, allowing barely enough to keep the population alive. Ms. Jabbour showed some of Israeli calculations of how much wheat and other commodities Gazans consumed that were obtained by her Center.

54. Since July 2010, restrictions included weapons and dual-use goods. Construction materials entered Gaza, such as pebbles, cement, iron and steel, but those were “secondary usage” goods and only for projects of international organizations and approved by Israel, she noted. Israeli regulations also dictated who was allowed to enter and leave Gaza, under what she described as “random” policies. For example, she said, a person in need of medical treatment could not go, but once they were terminally ill, they could. Family members could not cross the border, but they could for a funeral. There were also Israeli attempts to separate the West Bank from Gaza. Football players could leave Gaza, but people involved with the arts could not. Permits were given to businessmen, but they had to be of a high calibre, conflicting with the logic that their reason for leaving Gaza had to be to help the Gazan economy. In any case, Gazans were always threatened with deportation.

55. In the ensuing discussion, a speaker urged that the economic cost be calculated on an annual basis, which also included loss of income from tourism and crossing closures. The cost of destruction and demolitions should also be calculated. The suggestion was made that the degradation of the environment due to Israeli policies should also be considered, with wells depleted and high salinity in the water. Furthermore, it was suggested that the United Nations should establish a working group that would compare the state of the Palestinian economy before 1967 to its current state and seek recommendations from the Security Council or General Assembly on ways to compensate the Palestinian people for the occupation losses. The political dimensions of the issue were stressed, and the question was put to participants: what was the cost internationally? Studies on the cost of occupation were already being done at the United Nations, said another speaker, suggesting the need for an initiative by the Organization to put in place a mechanism that could make a comprehensive inventory of that cost.

56. Responding, Jad Isaac said that seven of the eight “losses” had been quantified, but some of them, such as land expropriation, were illegal, and he would not put a value to that; it was simply null and void in international law and thus should not be quantified. After the land was returned, compensation for its usage could be sought. It was restitution, and not compensation, that was required; the land should be returned to its owners. He agreed that the lost opportunity in tourism should be included in the discussion on the cost of the occupation. The world had to be shown that Israel was “reaping the fruits of a cheap occupation”, he said, adding, “we have to make occupation expensive or we will live under it for a long time”.

57. Shir Hever felt, however, that focusing only on restitution and not compensation was an “incentive for Israel to continue the occupation”. The damage caused to the Palestinians from the occupation “continued to accumulate”. So compensation “should not be taken off the table”. That was a way pressure could be applied to the Israeli Government and Israeli society. If Israel did not meet its responsibility to the Palestinian people, then it must pay the compensation. Economic sanctions imposed on Israel by other Governments would demonstrate a broad commitment to international law; that would indeed make the occupation expensive to Israel.

C. Plenary III

Offsetting the cost of the occupation while preparing for independence,

sovereignty and sustainable development

58. The speakers in plenary III addressed the following sub-themes: “Challenges faced by the international donor community in the implementation of assistance programmes”; “Palestinian claims against the occupying Power — learning from the United Nations experience in war economic reparation (the case of compensation for losses resulting from Iraq's invasion and occupation of Kuwait)”; and “Balancing gradual elimination of reliance on external aid with the need for continued international development and humanitarian assistance”.

59. The Islamic Development Bank, said Omar Mehyar, the Bank’s Portfolio Manager in the Trust Funds Department, was committed to help the Palestinian people “no matter what”. Of the $300 million approved for projects in Gaza, the amount spent had been “pitiful” because of the restrictions on materials and the logistical constraints. Despite the numerous challenges to the Bank’s work, he said, “we keep hope alive”, for Palestine, which was a “member country”. He noted that after the war in Gaza, the six countries in the Gulf Cooperation Council had set aside $1.6 billion for reconstruction, with a time frame of five years for implementation. Now, three years later, “very little has been done”. Of the $300 million for Gaza projects, $61 million was to go to housing units, but people were still living in tents. Similarly, $38 million had been set aside for schools and universities and laboratories, but 80 per cent of the schools in Gaza were operating with double shifts. The health sector, also severely damaged, was still being rebuilt, as was the public works sector.

60. The lack of materials was profound, he said. To repair destroyed roadways for example, innovative ideas such as the use of interlocking tiles, helped to substitute for the prohibited construction materials. Similar situations existed for the agricultural sector and fisheries. As for electricity, that was a “big disaster” in Gaza. The Bank had set aside $50 million to link the electrical grid in Gaza with Egypt in 2007, but nothing had materialized due to Israeli restrictions. Meanwhile, the existing system in Gaza was deteriorating, and had been hit several times by Israeli military forces. New machinery also could not be brought in, while relying on old machinery seriously compromised the manufacturing sector.

61. Considering the challenges to offsetting the cost of occupation, Geoffrey D. Prewitt, Deputy Director/Programme Coordinator of UNDP’s Regional Centre in Cairo, said that the paralysis in the peace process, which had indefinitely postponed a final status agreement, was augmented by donor policies that gave Israel “plenty of room and finances” to pursue its ambitions, including annexing large amounts of Palestinian Territory and natural resources.

62. Donor agencies, he said, must deal with the question of how best to tackle the illegal and destructive policies at play in the Occupied Palestinian Territory. It must be understood that real development under occupation was impossible; donors needed to realize that genuine development in the Occupied Palestinian Territory would not materialize unless the issues of land and other resources that shaped the economy were seriously tackled in a fair and sustainable manner. Aid would have an impact only when it was coupled with a clear political agenda in the pursuit of a just peace settlement, based on international law. Also, he said, since Palestinians under the occupation were politically polarized, primarily along the party lines, donors should not be part of that conflict or allow it to determine how they allocated aid or who was eligible to receive it. But his main point, he said, was that “no real and sustained development can take place unless the occupation is terminated and the Palestinian people are allowed to attain sovereignty and control over the decisions pertaining to their future, the utilization of their resources, and the kind of society they strive for”.

63. Mojtaba Kazazi, Executive Head of the United Nations Compensation Commission in Geneva, discussed lessons of the last 20 years that could be useful in the context of Palestinian claims. Specifically, he reviewed the Compensation Commission, a subsidiary body of the United Nations Security Council, spawned by resolution 687 (1991) concerning the situation between Iraq and Kuwait, informally known as the “ceasefire resolution”. Mr. Kazazi pointed out that the text had several provisions related to compensation, including a reaffirmation that Iraq was “liable”, under international law, for any direct loss or damage, including environmental damage or injury to Governments, nationals or organizations in connection with its invasion of Kuwait.

64. The Commission’s mandate, he explained, was to receive claims, process and pay them. He described its structure and the adoption of a further resolution, which created a compensation fund that stipulated the compensations should be financed from Iraq’s oil revenue. The Commission had received 2.7 million claims from more than 100 Governments. Along with the Governments, there were also categories for individuals, corporations and organizations. He described the types of claims, such as for injury or death, and who would be responsible for compensation payment. He said that a commission created in the case of the Occupied Palestinian Territory would “create expectations” and, therefore, before establishing such a body, it was important to have a sound administrative structure in place to deal with claims before they arose.

65. Nawaf Abou Shamala, Economic Expert at the League of Arab States in Cairo, agreed that it was impossible to map out the cost of the occupation, which was responsible for the calamitous loss in the Occupied Palestinian Territory. The suffering of the Palestinian people had been catastrophic; untreated Israeli sewage flowing on the land of a Palestinian farmer and his son was unthinkable. For every 100 glasses of Palestinian drinkable water, Israelis took 85 glasses; that was catastrophic. The whole world had to oppose such practices and “ring the bells” of alarm.

66. He had heard earlier in the Seminar that in most cases statistics were elusive, but he said he hoped that every international organization that tried to analyse the status of the Palestinian economy saw the real reasons for the degradation and learned the “measure” of the deterioration and its causes. It was important to note that not every growth in GDP was a reflection of economic development, but could be the result of international assistance flows. Similarly, an increase in trade balance was not really an improvement for the Palestinian people, but perhaps an easing of the blockade. Everyone knew there was no way to develop a small economy except to open it up to the outside world. He was concerned that assistance flows to the Palestinian people and their economy was a tool of the international community to confine the economy in the Occupied Palestinian Territory and, in fact, assist the Israeli market. The stricter were the restrictions, the more assistance was needed, but the converse was also true, he said. The Palestinian people were productive and constructive. Even amid repeated Israeli acts of aggression, they started again to rebuild. The Palestinian people were not happy to be at the forefront of aid recipients, and only looked forward to the opportunity to produce and work in a proper climate and “shake off the yoke of old restrictions”.

IV. Closing session

67. Afifi Abd-El-Wahab, Assistant Minister for Foreign Affairs and Permanent Representative of Egypt to the Arab League, said the Seminar’s participants had reaffirmed the international community’s support for the United Nations efforts to assess the socio-economic implications of the Israeli occupation and mitigate its effects on the Palestinian people in the West Bank and Gaza. Egypt was following the issues related to Palestine in its capacity as a leading member of the Non-Aligned Movement, and it carried out that role in international forums with the aim of restoring the legitimate rights of the Palestinian people. The interventions at the Seminar supported the international agreement that there was a need to create appropriate economic conditions in the Palestinian Territory by means of coordinated international endeavour.

68. Mr. Abd-El-Wahab said that the revolution of 25 January and the historical changes in the Arab region had given new impetus to restoring the inalienable rights of the Palestinian people. Israel should be aware of those developments; and it should change its policy and return to the Palestinian people their rights in the West Bank, Gaza and the diaspora. Egypt reaffirmed its support for the Palestinian rights and sought to restore them; it was committed to end the occupation and assist the Palestinian national reconciliation. Egypt also extended its support to the Seminar for its noble objective.

69. In choosing the theme of the Seminar, said Mr. Mansour, the Palestinian Rights Committee had wanted to show that the $7 billion annual cost of the occupation meant that if the occupation ended, that sum would enable the Palestinian people to “govern ourselves and run our lives”. If the occupation cost $7 billion, then that would be in the Palestinians’ pocket once occupation ended; they would have enough money to be self-reliant. Moreover, they would be able to establish a viable and strong State because they had their own institutions, and they had the support of two thirds of the United Nations General Assembly. “Occupation was not part of the eternal life of the Palestinian people,” he said.

70. Mr. Mansour continued by saying that there were so many ways to tell the story of the Palestinian people and the devastation of the occupation on the Palestinian economy. The high turnout at a high level at the Seminar was an indication that despite the many things happening in the Arab world and the global economy, the Palestinian question was still very important. The meeting had been held in Egypt because of the historical relationship and because it was an opportunity “to make a huge statement as an international community” about the need to put an end to this unfair, illegal and immoral blockade against the Palestinian people in Gaza. Egypt was the gateway to Gaza and the Seminar was sending a loud and clear message to end the blockade.

71. Egypt, he said, was also where the reconciliation agreement was signed on 4 May 2011 and where leaders would soon converge again to forge an agreement that all Palestinian factions within the Palestine Liberation Organization would form the “Government of technocrats” to prepare for the elections and Gaza’s reconstruction, and begin to put an end to the illogical division of the “two wings” of the Palestinian homeland and political system. He added that, to date, 132 countries had recognized the State of Palestine, and all had indicated that the Palestinian people are ready to govern themselves. Palestine would not be a least developed country, but a State of middle-income capability.

72. “Why was occupation not ending?” he asked. It was because Israel disregarded international law and had a powerful country protecting it. Meanwhile, Palestinians were unifying their house, putting an end to the blockade, dealing with each other, designing a new strategy to pursue statehood at the United Nations, equipping themselves with additional tools, defending themselves in the legal arena and overall advancing their cause.

73. In closing, the Committee Chair Mr. Diallo said that with the Seminar, the Committee had wanted to make the point that the occupation came with a price tag, “a heavy price tag”; it proved costly, even destructive for the Palestinian people, negatively affecting the economy, socio-economic development, the daily life of millions of Palestinians. The occupation and its effects on the Palestinians also came at a cost for the international community, diverting precious funds from supporting development to mitigating the damage caused by the Israeli policies. The time for realizing the two-State solution was running out, he declared. The occupation must end without conditions, which should allow the Palestinian people to achieve the independence of the State of Palestine on all the Palestinian Territory occupied in 1967, including East Jerusalem, and to exercise their inalienable rights, including the right to self-determination. The Committee was of the view that the two-State solution should be based on the relevant Security Council resolutions, the Quartet Road Map and the Arab Peace Initiative, Mr. Diallo concluded.

Annex I

Summary of the Chair

1. The two-day Seminar brought together representatives of Governments and international organizations, United Nations organs and agencies, civil society organizations and the media. The Seminar reviewed the impact of Israeli policies and practices on the socio-economic situation in the West Bank and Gaza; looked at the cost of the Israeli occupation incurred by the Palestinians in various sectors of the economy; and examined the ways of sustaining the recent economic achievements following the implementation of the Palestinian State-building programme.

2. The representative of Egypt, the host country, referring to the historic changes that had taken place in the region, expressed the hope that these developments would eventually be in favor of the Palestinian people, and stressed the need for Israel to adapt to new realities. He pointed to the importance of civil society and its increasing influence on political decision-making and called on the international community to take a crucial decision to help reach a final settlement of the conflict.

3. The Secretary-General of the United Nations, in a message delivered on his behalf, referred to the high cost of the occupation for the Palestinian people, calling for it to end, and pointed to the economic dimension of the illegal settlements and their infrastructure, which severely restricted access to land and natural resources by the Palestinian people. He also called for the full lifting of the Gaza blockade to allow for its economic recovery, and stressed that only a political solution would allow sustainable economic growth.

4. The Chair of the Committee on the Exercise of the Inalienable Rights of the Palestinian People enumerated various aspects of the impact of the occupation, such as the fact that more than 40 per cent of the West Bank was off-limits to Palestinians, serving the needs of half a million Israeli settlers; the separation wall was poised to swallow up a further 9 per cent of the territory; housing demolitions and evictions had doubled during 2011; and settler crimes and vandalism were up 40 per cent. In addition, Israel was blocking Gaza exports and imports, preventing the rebuilding of its devastated economy, and fragmentation and restrictions plagued the West Bank. The occupation caused vast economic damage, including lost output, the plundering of natural resources and environmental degradation. It deepened the Palestinians’ aid dependency and handicapped them in the diplomatic arena, while Israel was reaping its benefits.

5. He stressed that “smarter assistance” which promoted self-reliance, stimulated private investment and empowered the Palestinians, was needed. Robust engagement on the part of the donor community was key. Speaking on behalf of the Palestinian Authority, the Minister for Planning and Administrative Development stressed that the cost of the occupation involved humanitarian plight and surpassed economic and all other costs. In his keynote presentation, the Minister said that Israeli measures had cost the Palestinian economy $7 billion in 2010, an amount close to its annual gross domestic product. That was the result of heavy restrictions imposed on Palestinians in accessing their own natural resources, including their water, land, minerals and natural gas reserves. The siege of Gaza represented another major cost, as well as a cruel assault on the civilian population.

6. Other losses stemmed from the inflated costs of water and electrical supplies by Israeli companies. In addition, the Israeli Government was promoting settlement plans in strategic areas, which would prevent the formation of a viable Palestinian State. The Minister regretted that in spite of a broad international recognition of the legitimate rights of the Palestinian people and their readiness for self-government, this has not yet translated into statehood. In conclusion, he stressed that the Palestinians will continue focusing their efforts on the recognition of the State of Palestine in 2012, either through the Security Council or other United Nations organs.

7. During the plenary sessions, representatives of United Nations bodies and entities provided a snapshot of the situation through a “United Nations lens”. The humanitarian impact of the occupation in Gaza and the West Bank was enormous, due to access restrictions in Gaza that impacted life there and rendered 35 per cent of extremely arable land unavailable for cultivation. In Gaza, restrictions at sea had severely eroded the fishing industry and contaminated the main food source for Gazans, making them dependent on food aid. Despite measures to ease the blockade in 2010, the situation remained precarious, as only 40 per cent of imports from 2007 levels were allowed in, and exports were at a minimum. Thus, Gaza could not meet most of its infrastructure and reconstruction development needs. In the West Bank, including East Jerusalem, the settlements, the separation wall which was 700 kilometres long, forcible displacements and demolitions, confiscation of land and obstacles to Palestinian movement impacted heavily on the life of the population. The absence of a safe passage between the West Bank and Gaza Strip for goods, vehicles and persons aggravated the situation. Also, a significant constraint on the development of the Palestinian economy was the growing physical and demographic separation of East Jerusalem from the rest of the Occupied Palestinian Territory.

8. The participants then focused on quantifying the damage caused to the Palestinians by the occupation in various sectors of economy. The Director of the Applied Research Institute – Jerusalem Jad Issac presented the findings of the study published in cooperation with the Palestinian Ministry of National Economy, the first attempt to provide a systematic quantification of such costs, for 2010. According to the study, the cost of the Gaza blockade, calculated at the macrolevel through the comparison of the Gazan economy before the blockade, amounted in 2012 to $1.9 billion (23.5 per cent of GDP). This loss was brought about by a number of Israeli restrictions, including almost complete closure to international trade, the disruption caused to the electricity production, the limited access to sea resources and the continued shelling of infrastructure.

9. In the area of water, it was noted that Palestinians only had access to 10 per cent of the annual recharge capacity of the West Bank’s water system, while Israel had a complete control of the aquifers in the West Bank. In addition, Israel had been consistently over-extracting the water, causing the depletion of the aquifer’s reserves, and was then selling the water back to the Palestinians. Half the Palestinian wells had dried up over the last two decades, and on average, Israelis consumed seven times as much water as Palestinians, while Palestinians paid five times as much for water as the settlers.

10. Israeli settlements meanwhile dumped some 40 million cubic metres of wastewater and solid waste annually on Palestinian land, and 60 million litres of untreated or partially treated sewage reached the land or sea or drinking water sources daily. The restricted access to water resources generated two types of losses for the Palestinian economy: direct loses, namely due to the high costs for the water consumed, amounting to $51.9 million (0.6 per cent of GDP) and indirect losses comprising foregone agricultural production and health problems due to poor water quality, amounting to $1.9 billion (23.4 per cent of GDP).

11. The restrictions on access to natural resources deprived the Palestinians of enormous sources of revenues associated with the extraction of salts and minerals from the Dead Sea, which is off limits to the Palestinians; the mining of much of the gravel and stone available in the West Bank, most of which is exploited by Israel; and the development of the Gaza offshore gas field. These costs amounted to $1.83 billion (22.6 per cent of GDP). Similarly, the lack of access to the Dead Sea has made the development of a high potential Palestinian tourism industry along its shores impossible, causing a loss of $143.5 million annually (1.8 per cent of GDP).

12. Other losses imposed by the occupation included the cost of electricity as the Palestinians were dependent on Israeli supplies due to the restrictions imposed on the electricity generation, amounting to $440.8 million (5.4 per cent of GDP); the costs incurred due to international trade restrictions amounting to $288 million (3.5 per cent of GDP); the costs associated with the barriers to the movement of goods and people within the West Bank amounting to $184.5 million (2.3 per cent of GDP); and the destruction of productive assets, particularly the uprooting of trees ($138 million or 1.7 per cent of GDP). In addition, the direct fiscal costs of the occupation amounted to 406 million per year while the indirect fiscal costs total 1.389 billion per year. In total, the cost of the occupation the study was able to measure amounted to $6.897 billion in 2010, representing 84.9 per cent of GDP.

13. It was noted that despite the magnitude of the estimated losses, those were likely to be a severe under-estimation of the real costs imposed by the occupation on the Palestinian economy, as it had not been possible to measure all the different costs, owing to a lack of data. Participants noted that other costs should also be quantified, among them the fines imposed on the Palestinians; compensation for the use of land once it has been restituted; compensation for Palestinian prisoners in Israeli jails; and compensation for demolition of Palestinian property.

14. The participants agreed on the importance to document the damage done by the occupying Power to the Palestinian people. A suggestion was made that the United Nations should create a working group that would establish the losses to the Palestinian economy under the occupation and seek recommendations from the Security Council or General Assembly on ways to compensate the Palestinian people. In a similar vein, it was suggested that the United Nations should put in place a mechanism that could make a comprehensive inventory of the damages caused. In this regard, reference was made to the United Nations Register of Damage documenting, since 2007, the damage caused by the construction of the wall in the Occupied Palestinian Territory, which should be, together with other units within and outside the United Nations, part of the proposed coordinating mechanism.

15. Opinions diverged on the issues of compensation and restitution. While all agreed that both were important, some stressed that restitution was essential as land had to be returned to their owners, and compensation could be dealt with later. Others felt it was important to focus already now on the compensation as a deterrent to further exploitation by the occupying Power.

16. The Executive Director of the United Nations Compensation Commission shared some lessons learned from the case of compensation for losses resulting from Iraq’s invasion and occupation of Kuwait. While acknowledging the many differences between the two cases, the following lessons might be useful in the context of the Israeli- Palestinian conflict: the need to determine a clear mandate of the body in charge of the compensation; the types of harm or loss suffered to identify claims eligible for compensation; the legal bases; the eligibility to submit a claim and the source of funds for compensation.

17. The Seminar furthermore discussed the role of the international donor community in mitigating the cost of the occupation. At the outset, the participants noted that while the Oslo Process had created significant conditions of change, allowing the Palestinians to improve their infrastructure and creating opportunities, it had also significantly unburdened the occupying authorities, with the bulk of costs being transferred to the donor community. A nexus of dependency emerged, in the form of a tripartite relationship between the Palestinian Authority, the donor community and Israel. It was noted that changes had to be introduced in donor policies in order for the interventions to have real impact on the ground. In particular, there had not been a concerted effort by the donor community to connect the political and the development sphere.

18. The donors shied away from difficult political issues, focusing their programming on technical issues, while their interventions should rather be intended to assist the Palestinian people in the establishment of their independent State. There was a lack of understanding of the needs and priorities of the Palestinians, and interventions were tailored to accommodate Israeli needs. A proposal was made that the Palestinians should establish a commission that would supervise the management of international aid, define the priorities and annually review whether individual donor agencies were exacerbating or mitigating the internal conflict.

19. The participants also looked at ways of ensuring the socio-economic viability of the future State of Palestine. They stressed the importance of a connection between the West Bank and Gaza and listed the priorities in this regard: removing the barriers to trade and market entry; allowing free access to goods and people; revitalizing the Gaza infrastructure and the private sector; reintegrating the Gaza economy with that of the West Bank; and re-opening the Israeli market for Gaza products. The viability of a future independent Palestine depended also on reintegrating East Jerusalem’s economy within the broader national economy through better integration of trade, labour and financial markets. Also, the reintegration of the Palestinian economy into that of the region was crucial.

20. There was a need to reestablish and forge the ties in the development and business areas with the wider Arab region, including with Arab civil society and the private sector, especially in light of the Arab awakening and the renewed role of civil society across the region. Cooperation with Arab partners would open up opportunities for coordinated advocacy, regional projects, funding as well as investment opportunities in the Occupied Palestinian Territory, in several sectors, including tourism and agriculture. The United Nations could assist in encouraging partnerships and provide platforms for forging and nurturing them, while providing some seed funding for projects.

21. In conclusion, Palestine’s Permanent Observer to the United Nations pointed out that the $7 billion cost of the occupation incurred annually by the Palestinians meant that if the occupation ended, that sum would further enable the Palestinians to ensure the sustainable development of the national economy, thereby adding another proof of the Palestinian readiness to have an independent State. The high turnout at the Seminar was an indication that despite of the many developments in the Arab world and the global economy, the Palestinian question remained high on the agenda of the Governments, intergovernmental organizations, and the people in the region.

Annex II

List of participants