As of the early-21st century, the economy of Palestine is chronically depressed, with
unemployment rates constantly over 20% since 2000. The unemployment rate was 19% in the West Bank in first half of 2013.
Early economic impact The Jordanians neglected to invest much in the area during their time governing the area, although there was some investment in the immediate vicinity of Jerusalem. Soon after the 1967 war,
Yigal Allon produced the
Allon Plan, which would have annexed a strip along the Jordan River valley and excluded areas closer to the pre-1967 border, which had a high density of Palestinians.
Moshe Dayan proposed a plan which
Gershom Gorenberg likens to a "photo negative of Allon's." The Allon plan evolved over a period of time to include more territory. The final draft dating from 1970 would have annexed about half of the West Bank. Israel had no overall approach for integrating the West Bank. The early occupation set severe limits on public investment and comprehensive development programmes in the territories. British and Arab commercial banks operating in the West Bank were closed down soon after Israel assumed power there.
Bank Leumi then opened nine branches, without successfully replacing the earlier system. Farmers could get loans, but Palestinian businessmen avoided taking out loans from them, since they charged 9% compared to 5% interest in Jordan. By June 1967, only a third of West Bank land had been registered under Jordan's
Settlement of Disputes over Land and Water Law. In 1968, Israel moved to cancel the possibility of registering one's title with the Jordanian Land Register.
Ian Lustick states that Israel "virtually prevented" Palestinian investment in local industry and agriculture. At the same time, Israel encouraged Arab labour to enter into Israel's economy, and regarded them as a new, expanded, and protected market for Israeli exports. Limited export of Palestinian goods to Israel was allowed. Expropriation of prime agricultural land in an economy where two thirds of the workforce had farmed is believed to account for the flight of labourers to work in Israel. As much as 40% of the workforce commuted to Israel on a daily basis finding only poorly paid menial employment. Remittances from labourers earning a wage in Israel were the major factor in Palestinian economic growth during the 1969–73 boom years. The migration of workers from the territories had a negative impact on local industry, by creating an internal labour scarcity in the West Bank and consequent pressure for higher wages there. The contrast between the quality of their lives and Israelis' growing prosperity stoked resentment. Attempting to impose governmental authority, Israel established a licensing system according to which no industrial plant could be built without obtaining a prior Israeli permit. With Military Order No. 393 (14 June 1970), the local commander was given the power and authority to block any construction if, in his evaluation, the building might pose a danger to Israel's security. The overall effect was to obstruct manufacturing development and subordinate any local industrial activity to the exigencies of Israel's economy, or to block the creation of industries that might compete with Israel's. For example, entrepreneurs were denied a permit for a cement factory in Hebron. In order to protect Israeli farmers, melon production was forbidden, imports of grapes and dates were banned, and limits were set to how many cucumbers and tomatoes could be produced. Israeli milk producers exerted pressure on the
Ministry for Industry and Trade to stop the establishment of a competitive dairy in
Ramallah. The sum effect after two decades was that 15% of all Palestinian firms in the West Bank and Gaza employing over eight people, and 32% with seven or less, were prohibited from selling their products in Israel. Israeli
protectionist policies distorted wider trade relations to the point that, by 1996, 90% of all West Bank imports came from Israel, with consumers paying more than they would for comparable products had they been able to exercise commercial autonomy.
Consequences of occupation Economic consequences According to a 2013 World Bank report, Israeli restrictions hinder Palestinian economic development in Area C of the West Bank. A 2013
World Bank report calculates that, if the
Interim Agreement was respected and restrictions lifted, a few key industries alone would produce US$2.2 billion per annum more (or 23% of 2011 Palestinian GDP) and reduce by some US$800 million (50%) the Palestinian Authority's deficit; the employment would increase by 35%.
Water supply Amnesty International has criticized the way that the Israeli state is dealing with the regional water resources: Israeli settlers in the West Bank have seized dozens of
wells from Palestinians. The wells are privately owned by Palestinians and the settlers forcibly took them, gave them Hebrew names and, with the assistance of the Israeli military, prevent Arab people, including the wells' owners, from using the wells and the pools the wells feed.
Israeli garbage disposal Israel ratified the international
Basel Convention treaty on Israel on 14 December 1994, according to which, any transfer of waste must be performed with an awareness of the dangers posed to the disempowered occupied people. It forbids the creation among them of "environmental
sacrifice zones". Israel, it is argued, uses the West Bank as a "sacrifice" zone by placing 15 waste treatment plants, which are there under less stringent rules that those required in Israel because a different legal system has been organized regarding hazardous materials that can be noxious to local people and the environment. The military authorities do not make public the details of these operations. These materials include sewage sludge, infectious medical waste, used oils, solvents, metals,
electronic waste, and batteries. In 2007 it was estimated that 38% (35 mcm a year) of all wastewater flowing into the West Bank derived from settlements and Jerusalem. Of the 121 settlements surveyed, 81 had wastewater treatment plant, much of it inadequate or subject to breakdown, with much sewage flowing into lowland streams and terrain where Palestinian villages are located. Only 4 of 53 indictments for waste pollution were made over the years from 2000 to 2008, whereas in Israel the laws are strictly applied and, in 2006 alone, 230 enforcements for the same abuse were enforced. At the same time 90–95% of Palestinian wastewater was not treated, with only 1 of 4 Israeli plants built in the 1970s to that purpose functioning, and the neglect to improve the infrastructure is attributed to Israeli budgetary problems. After the Oslo Accords, the global community earmarked $250,000,000 for West Bank wastewater infrastructure. Israel at times insisted its approval was conditional on linking the grid to Israeli settlements, which neither the donors nor Palestinians accepted. Most of the infrastructure was subsequently destroyed by IDF military operations. The PA raised funds from Germany for 15 plants, but only managed to build one, at
al-Bireh, within Area B, though even there Israel insisted the plant process waste from the settlement of
Psagot, though refusing to pay fees for the treatment. Palestinian town
Salfit has been deeply affected by sewage overflow channelled past the town from the settlement of Ariel. Unlike the data available for sewage treatment within Israel, the Israeli Water Commission refuses to provide public reports on 15 million cubic metres of sewage flowing from Israeli settlements in the West Bank. It claims 75% is treated adequately but independent Israeli studies (2000) suggest that only 6% met Israeli treatment standards, while 48% was either not treated adequastely or discharged raw. Since then some improvements have been implemented. The landfill near
Al-Jiftlik in the
Jericho Governorate, built on
absentee Palestinian property without planning or an environment impact analysis, is for the exclusive use of waste, 1,000 tons per day, produced by Israeli settlements and cities within Israel. In response to
local opposition in Israel to waste treatment plants and the high cost of meeting stringent environment laws in that country. It has been argued that Israel had used the area of the West Bank as a 'sacrifice zone' where its waste can be dumped." Many
waste treatment facilities in the West Bank were built for processing waste generated inside Israeli sovereign territory, according to
B'Tselem, Israel's leading
human rights organization for monitoring the West Bank. The Israel government requires no reporting by these West Bank facilities of the amount of waste they process or the risks they pose to the local population, and applies less rigorous regulatory standards to these facilities than it does to
solid waste treatment facilities in Israel. The
UNEP has described Israeli vehicle dismantling in the Palestinian territories as "unregulated". B'Tselem has said that "any transfer of waste to the West Bank is a breach of
international law which Israel is dutybound to uphold" because according to international law "an occupied territory or its resources may not be used for the benefit of the
occupying power's own needs." Experts have also warned that some of these facilities are garbage dumps that endanger the purity of the mountain
aquifer, which is one of the largest sources of water in the region. In addition to the exporting of Israeli waste and the waste generated by settlers, Israeli industrial and manufacturing operations with harmful health effects are typically outsourced to the West Bank where they can be carried out with little to no regulatory oversight.
Palestinian water and sewage In 1995, the Palestinian Water Authority (PWA) was established by a presidential decree. One year later, its functions, objectives, and responsibilities were defined through a by-law, giving the PWA the mandate to manage water resources and execute the water policy. About 90% of the Palestinians in the territories had access to
improved sanitation in 2008.
Cesspits were used by 39% of households, while access to the sewer network increased to 55% in 2011, up from 39% in 1999. In the West Bank, only 13,000 out of 85,000 m3 of wastewater were treated in five municipal wastewater treatment plants in
Hebron,
Jenin,
Ramallah,
Tulkarem, and
Al-Bireh. The Al Bireh plant was constructed in 2000 with funding by the
German aid agency KfW. According to the World Bank report, the other four plants perform poorly concerning efficiency and quality.
Resource extraction Based on the number of quarries per km2 in Areas A and B, it is calculated that, were Israel to lift restrictions, a further 275 quarries could be opened in Area C. The World Bank estimates that Israel's virtual ban on issuing Palestinians permits for quarries there costs the Palestinian economy at least US$241 million per year. In international law drawing on the
Hague Conventions (Article 55), it is established that an occupying power may reap some value from the resources of the country occupied but not deplete its assets, and that the
usufruct must benefit the people under occupation. The Oslo Accords agreed to hand over mining rights to the Palestinian Authority. Israel licenses eleven settlement quarries in the West Bank and they sell 94% of their material to Israel, which arguably constitutes "depletion" and pays royalties to its West Bank military government and settlement municipalities. The checkpoint system did not ease up after the Oslo Accords, but was strengthened after them, which has been interpreted as suggesting their function is to assert control over Palestinians, and as a sign of an unwillingness to yield ground in the West Bank. According to
PA Health Ministry statistics relating to the period from 2000 to 2006, of 68 Palestinian women who gave birth to their children while held up at checkpoints, 35 miscarried and 5 died while delivering their child there.
Machsom Watch accumulated over a mere five years (2001–2006) some 10,000 eyewitness reports and testimonies regarding the difficulties faced by Palestinians trying to negotiate West Bank checkpoints. Transportation infrastructure is particularly problematic as Palestinian use of roads in Area C is highly restricted, and travel times can be inordinate; the Palestinian Authority has also been unable to develop roads, airports or railways in or through Area C, while many other roads were restricted only to public transportation and to Palestinians who have special permits from Israeli authorities. At certain times, Israel maintained more than 600 checkpoints or roadblocks in the region. Movement restrictions on main roads between cities were still (as of 2005) blamed for poverty and economic depression in the West Bank. Underpasses and bridges, 28 of which have been constructed and 16 of which are planned, link Palestinian areas separated from each other by Israeli settlements and bypass roads" , 2005 Israeli restrictions were tightened in 2007.
Route 4370, which has a concrete wall dividing the two sides, one designated for Israeli vehicles, the other for Palestinian. The wall is designed to allow Palestinians to pass north–south through Israeli-held land and facilitate the building of additional Jewish settlements in the Jerusalem neighbourhood.
Rail , a plan for 475-kilometre rail network, establishing 11 new rail lines in the West Bank, was confirmed by Israeli Transportation Ministry. The West Bank network would include one line running through Jenin, Nablus, Ramallah, Jerusalem, Ma'aleh Adumim, Bethlehem, and Hebron. Another would provide service along the Jordanian border from Eilat to the Dead Sea, Jericho, and Beit She'an and from there toward Haifa in the west and also in a northeasterly direction. The proposed scheme also calls for shorter routes, such as between Nablus and Tul Karm in the West Bank, and from Ramallah to the Allenby Bridge crossing into Jordan.
Airports The only airport in the West Bank is the
Atarot Airport near
Ramallah, which has been closed since 2001.
Crossing points to Jordan and Egypt The
Allenby Bridge, or 'King Hussein Bridge', is the main port for the Palestinians in the West Bank to cross the Jordanian borders. This crossing point is controlled by Israel since 1967. It was inaugurated on 11 December 2011 under the military order "175" entitled 'An order concerning transition station'. Later, Order '446' was issued which annexed the
Damia Bridge crossing point to the Allenby Bridge as a commercial crossing point only. Goods were exported to Jordan, while the import was banned for security purposes. In 1993, the Palestinian National Authority, according to Oslo Accord assigned by PLO and the Israeli government, became a partial supervisor over the
Rafah Border Crossing to Gaza Strip. The Palestinian Authority was responsible for issuing passports to Palestinians in the West Bank and Gaza Strip. Israel remained the major responsible party for this crossing point. According to the agreement, Israel has the right to independently inspect luggage and to maintain security. In addition, it can prevent anyone from using the crossing.
Telecommunication The Palestinian
Paltel telecommunication companies provide communication services such as
landline,
cellular network, and Internet in the West Bank and
Gaza Strip. Dialling code
+970 is used in the West Bank and all over the Palestinian territories. Until 2007, the Palestinian mobile market was monopolized by
Jawwal. A new
mobile operator for the territories launched in 2009 under the name of
Wataniya Telecom. The number of Internet users increased from 35,000 in 2000 to 356,000 in 2010. ==Demographics==