Paying a price: coping with closure in Jericho, Gaza City and 2 Palestinian villages – UNSCO report (January 2002) – summary

PAYING A PRICE

COPING WITH CLOSURE IN JERICHO, GAZA CITY

AND IN TWO P ALESTINIAN VILLAGES

Summary

"Closure" means Israeli restrictions on Palestinian movement of persons or goods across the border between the West Bank or Gaza Strip and Israel or other countries, and also internally within the West Bank and Gaza Strip.

The Office of the United Nations Special Coordinator (UNSCO) commissioned the Norwegian research institute F AFO to undertake an in depth study in two Palestinian towns, Jericho and Gaza City and two Palestinian villages, Beit Furik and Rantis.¹  The purpose of these studies was to improve understanding of how the closure in the West Bank and Gaza Strip following the start of the second Palestinian Intifada – that started in September 2000 – impinges upon the economy and daily life of people, how they are affected by the closure and how they cope with the situation.

This report summarizes the key findings of these studies and draws conclusions on the basis of these findings.

OVERALL FINDINGS

All three of the studies found that closure mechanisms implemented in and around the West Bank and Gaza placed severe strains on the daily lives of ordinary citizens, mainly due to restrictions in movement and subsequent loss of employment and income.  In the West Bank (Jericho, Beit Furik and Rantis) this was primarily due to internal closure measures that have had a direct impact on people's ability to work or market their goods. In Gaza (Gaza City) this was primarily due to the closure of external borders with Israel and Egypt that have contracted traditional markets and limited employment opportunities. The general impact of closures however, have been similar for all four of the population centers studied.

Economic Impact of Closure

The main economic effect of closure has been the shrinking geographic scope of economic activities both in terms of employment opportunities and access to markets for inputs into the productive process and for exports of finished goods and services. In other words, the establishment of a military checkpoint on the road between Beit Furik and Nablus has had the same effects for the inhabitants of Beit Furik as the closure of the Erez crossing has had for the citizens of Gaza City.

All three studies find that economic activities oriented towards external markets have been hardest hit by the closures whereby external markets are defined as areas outside the scope of immediate locality studied. Workers who previously had their place of employment outside of the line of closure have lost their jobs while many producers and merchants have lost their traditional markets for inputs and outputs. Producers and merchants focused on the local market have managed to continue operations although in almost all cases at a lower level, if compared to pre-crisis levels, as demand for products has collapsed.

The loss of income resulting from rising unemployment and decreasing business revenues have focused consumer demand more and more on basic needs such as food, water, electricity, etc.  Demand for non-essential goods has almost disappeared completely in the two villages and has fast declined in the two towns.

Despite having severely restricted their possibilities for action, Palestinian households have adapted and tried to cope with the limitations that closure brings. They have concentrated on securing livelihoods and dealing with the problems of their businesses.  Palestinians have therefore actively responded to the impact of closure to find ways to mitigate and transform its effects.

Just as the imposition of closure affects both towns and villages in a similar fashion, the mechanisms adopted by Palestinian households to cope with the effects of closure show great similarity across the three studies. At the level of households, the studies find the following coping mechanisms:

1) Decreasing consumption:  With the reduction of income that households increasingly experience, a general first reaction has been to reduce consumption.  Initially this implies the postponement of major investments in, for example, construction but this is soon followed by a decreasing demand for non-essential products. Households have also begun to decrease food consumption. This is especially true for those households that have experienced a significant decline in income. Whereas this last phenomenon was already visible during the first round of field visits, the return visit to the two Palestinian villages has shown that increasing numbers of households are adapting their diet, in some instances limiting their food consumption to bread, oil and occasionally some vegetables.

2) Depending on credit:  Households have also turned to credit as a traditional form of coping. Within families, family members who still have an income support those family members that have lost their source of income, not as a form of charity but on the understanding that monies given will be returned eventually or other kinds of services are performed in return. This basic form of solidarity is also frequently found in many shops, grocery stores, pharmacies, etc.  Credit is provided on the understanding that debts will be paid off and debtors usually payoff their debts first as soon as some money is earned. During the early stages of the current crisis, shopkeepers were able to provide credit as their suppliers were willing to provide goods on credit or because they had additional alternative sources of income or large savings.   However, as was found particularly in the second round of interviews in the two villages in the West Bank, shopkeepers are increasingly hesitant about giving credit as their suppliers no longer provide credit or because their own savings have been depleted. Finally, credit is also provided, albeit unofficially, at the institutional level.  With resources becoming more and more scarce, households in all three of the studies are increasingly delaying payment or stopping payment altogether for public services provided by the local municipalities. Whereas prior to the crisis municipalities would cut off the supply of electricity or water to those households that had not paid their bills for a certain amount of time, municipalities are now much more hesitant about this. The result of this is that municipalities now have to use all their resources as well as their savings to pay the monthly electricity or water bill and thus preventing these municipalities of providing other services such as garbage collection, road repairs, etc.

3) Depending on Aid: In all three studies, examples are found of households receiving emergency support in the form of food packages and sometimes financial support.  Whereas such support is much appreciated by those that need it most, the overall perception is that emergency aid is too little and too sporadic to depend upon.

4) Selling Assets: The selling of assets is in most cases a last effort coping mechanism.  Usually it involves the sale of land or gold and jewellery. Whereas, during the first series of field visits, little evidence was found that Palestinians were selling assets in order to raise money, there were some indications during the second round of interviews in the two Palestinian villages of this practice.

At the level of private sector businesses, the studies have found that the decreasing geographic scope of markets is reversing the recent trend towards more integrated economic systems. It is a commonly observed phenomenon that with economic development and improved transport, small shops in villages have to close because their customers increasingly use the better-stocked shops in nearby towns. Thus towns grow and the surrounding villages become suburbs. Villagers increasingly find employment in the towns and the remaining businesses inside the villages become more specialized and more dependent on demand from the nearby economic centers.

Such a process had occurred in the West Bank and to some extent in the Gaza Strip but is now being reversed as a result of closure. Workers from Beit Furik and Rantis have lost their jobs in Nablus and Ramallah and larger scale operations, such as for instance the chicken farmer in Beit Furik, have been forced to shut down production. The new businesses that have sprung up ill these villages are without exception very small scale and fully focused on the local market only.

The same process is occurring in the town of Jericho and in Gaza City. Businesses and service providers have been forced to scale down  production. and overall productivity is down as many employees are unable to reach their place of work inside the town. The case of Gaza City is somewhat different from Jericho as its economic hinterland includes both the surrounding villages as well as Israel.

The availability of coping mechanisms for economic enterprises is limited.  Businesses that have lost their market altogether, such as for instance the tourism sector in Jericho are forced to shut down completely. Some businesses, faced with increasing transaction costs and mounting uncertainty about the future, have chosen to temporarily halt production and wait for better times. Most businesses however, have had to scale down production and cut costs, usually through decreasing the number of employees, in line with the scaled down market in which they operate.

Social Impact of Closure

Generally, the studies have found that the provision of basic social services such as primary health care and education has not been severely hampered by the closures.  Medicine transports have generally been allowed to cross checkpoints, thought sometimes with significant delays. Clinics and hospitals have generally remained open with staffing by medical professionals who live in the community. Schools are still open even though an increasing number or parents can no longer pay the school fees. In cases where teachers can no longer reach their schools because they live outside the line of closure, the schools have often found volunteer replacement teachers. The continuing ability of the PA to pay salaries of doctors, nurses and teachers has been crucial to the continuing provision of these services.

Whereas the provision of basic social services has not been too much affected by closures, the use of these services, mainly as a result of limited access to them, has been affected. The studies include examples of pregnant women giving birth at checkpoints because they were not allowed to pass. Also, there are some documented cases of people dying because they were unable to reach medical facilities in time. In Gaza City , there have been some instances were schools were temporarily closed as a result of nearby confrontations.

The studies have not found any evidence of the emergence of major health problems related to the crisis. However, there are some indications in the studies that psychological problems in school children (Gaza City) and unemployed men (Beit Furik) are becoming more widespread. Though hard evidence is so far lacking, there are grounds for fearing deepening health and nutritional problems. Some medical personnel have reported the emergence of diseases that are normally associated with malnutrition.

Finally, one interesting finding from the Jericho study indicates that the crisis is generating some form of socio-political reorganization whereby traditional patrilineal affiliations are losing importance as a result of increasing membership in political factions. In addition, the Jericho study indicates that the crisis is also unifying the various political factions in a common front against the Israeli occupation.

CONCLUSIONS

Closure measures around as well as inside the West Bank and Gaza have had a significant, negative effect on the Palestinian economy and consequently on the daily lives of average citizens in Jericho, Gaza City, Beit Furik and Rantis. These towns and villages were chosen to be indicative of the range of effects of closure. One can thus assume that the findings are reasonably representative of other towns and villages in the West Bank and Gaza.

After over one year of Intifada, confrontations and closure, the Palestinian economy has been sustained for three basic reasons.

First, although closure is strict, and has become increasingly so during the course of the year it is not complete.  Palestinian workers have intermittently been able to cross into Israel to find work and earn wages that will sustain them even if they cannot go back to Israel on a daily basis. Villagers have also been able to use back roads to reach economic centers to buy raw materials and supplies or sell their products. The imposition of closure measures such as roadblocks, trenches and manned checkpoints has meant that these trips take longer, cost more and are more dangerous, but are not necessarily always impossible.

Second, the PA, as well as organizations such as UNRW A and various NGOs, have continued to provide basic social services and paid the salaries of public sector employees, irrespective of whether they have been able to reach their work or not. This has provided a safety net against an even more dramatic decline in demand. Public sector employees, who are mainly concentrated in the towns, are still able to pay for the goods they buy in stores and support their relatives who have lost their source of income.

Third, Palestinians have been able to resort to such coping mechanisms such as decreasing (food) consumption, reliance on credit, some emergency assistance and the selling of assets. This has allowed them to sustain themselves during a period of steep economic decline.

However, these coping mechanisms are not sustainable over the medium to long-term.  An updated round of interviews in October 2001 in the two villages showed that many households have already reduced consumption to basic foodstuffs, shop keepers have become increasingly reluctant to provide credit and emergency assistance has not been sufficient to make a lasting difference.

Whereas the occasional tightening of the closure further limits the options people have to make a living and continue economic activities, and forces them to rely more heavily on their coping strategies, it is more directly the prolonged duration of the closure, that is exhausting the available coping mechanisms and makes it increasingly hard for people to make ends meet.

Whereas the direct effects of closure on the daily life of people are clearly identified in the studies, the longer lasting long-term effects are only now beginning to emerge.  Increased occurrence of psychological problems both in children and adults as well as the possible early signs of malnutrition are but small indications that larger problems may await the Palestinian population if the crisis and closure continues.

It is also becoming increasingly clear that closure does not have the effect that was originally sought. Though the expressed intent is not collective punishment, there can be no doubt that the effect is collective hardship. The ways in which closure measures are implemented and the collective impact they are having upon the population, raises questions about their validity as a security tool. Moreover, closure has not stopped violent action against settlers or Israeli's whether inside Israel or inside the Occupied Territory. Rather, periods of severe closure has often shown more violence.

Finally, the indications of an ongoing socio-political reorganization of the Palestinian society around political factions rather than patrilinial clans, combined with continued and even more invasive economic hardship, may lead to a further radicalization of the population. Such a development may increase the danger of increased violent conflict, which could make closure, if defined as a security measure, less a factor in preventing violence than in exacerbating it.

January 2002

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¹Research for the studies was undertaken between April and June 2001.  Additional research was conducted in the villages in October 2001.