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UN: Israeli trade control causes $310m loss for PA

Al-Akhbar | December 3, 2014

The Palestinian Authority lost at least $310 million in customs and sales tax in 2011 as a result of importing from or through Israeli-occupied territories, the UN said Wednesday, urging a radical change to the system.

The lost revenue, worth 250 million euros, was equivalent to 3.6 percent of gross domestic product (GDP) and 18 percent of the tax revenue of the authority, the UN Conference on Trade and Development (UNCTAD) said.

The figures point to “the pressing need to change the modus operandi of the Palestinian import regime to ensure Palestinian rights in all economic, trade, financial and taxation areas,” it said in a new study.

UNCTAD said the 1994 Paris Protocol which governs economic ties between Israeli-occupied and Palestinian territories causes “instability and uncertainty for the Palestinian territory” and should be reformed.

It said barriers should be removed to trade with other countries, and criticized Israel’s “disproportionate influence” on collecting Palestinian revenues.

Israel often freezes the transfer of funds under the pretext of a punitive measure in response to diplomatic or political developments it deems harmful.

About 40 percent of the so-called “fiscal leakage” is related to direct and indirect imports from Israel, and 60 percent from evasion of customs duties, the UN said.

The report cited data from the Israeli Central Bank indicating that 39 percent of Palestinian imports from Israel-occupied territories originate in third countries, but are cleared in Israel and sold on as if produced by Israel.

Customs revenues from these “indirect imports” is collected by the Israeli authorities but not transferred to the Palestinian authority, it said.

Another problem comes from goods smuggled over the border from Israeli-occupied territories, the report said, highlighting the Palestinians’ lack of control over their borders.

Smuggling results in lost sales and purchase taxes for the Palestinian authorities and, where the goods are produced in a third country, lost tariff revenues.

UNCTAD added that its figures are likely to underestimate the problem and urged further research.

The Palestinian economy is bound closely to Israel’s through infrastructure and trade and has few foreign trading partners.

It said that Israel’s system of checkpoints and restrictions in the area inflict long-term damage on Palestinians’ ability to compete in the global market.

The policies are causing a contraction in manufacturing and agricultural sectors, “alarmingly” high unemployment and social problems that would outlive any Israeli-Palestinian peace agreement, the organization said.

Israel occupied East Jerusalem and the West Bank during the 1967 Middle East War. It later annexed the holy city in 1980, claiming it as the capital of the self-proclaimed Zionist state – a move never recognized by the international community.

In November 1988, Palestinian leaders led by Arafat declared the existence of a State of Palestine inside the 1967 borders and the State’s belief “in the settlement of international and regional disputes by peaceful means in accordance with the charter and resolutions of the United Nations.”

Heralded as a “historic compromise,” the move implied that Palestinians would agree to accept only 22 percent, almost 17 percent now after the expansion of Israeli settlements, of historic Palestine in exchange for peace with Israel.

Throughout the 1990s and 2000s, Palestinian leaders sought to create the institutions of statehood despite the lack of an actual state, leading to the development of a security apparatus under US tutelage and a Palestinian bureaucracy.

While major Palestinian cities have boomed in the 26 years since “independence,” Israeli confiscation of land in border regions has continued unabated.

Last year, the World Bank estimated that Israeli control over Area C — the 61 percent of the West Bank under full Israeli military control — costs the Palestinian economy around $3.4 billion annually, or more than one-third of the Palestinian Authority’s GDP.

According to the PLO, between 1989 and 2014, the number of Israeli settlers on Palestinian land soared from 189,900 to nearly 600,000. These settlements, meanwhile, are located between and around Palestinians towns and villages, making a contiguous state next to impossible.

In its Independence Day statement last month, the PLO sought international solidarity to achieve the dream of a Palestinian state free of occupation denied since 1948.

“One effective step that the international community can take is to recognize the State of Palestine over the 1967 border with East Jerusalem as its capital and support Palestine’s diplomatic initiatives such as the UNSC resolution to put an end to the Israeli occupation as well as our access to international treaties and organizations. This will provide additional support to the two-state solution between Israel and Palestine while nullifying any Israeli attempt to change the status quo of the occupied State of Palestine,” the PLO said.

“The international community must ban all Israeli settlement products, divest from all companies involved directly or indirectly in the Israeli occupation and take all possible measures in order to hold Israel, the occupying power, accountable for its daily violations to Palestinian rights and international law.”

The Palestinian Authority this year set November 2016 as the deadline for ending the Israeli withdrawal from the territories occupied by Israel during the Six-Day War in 1967 and establishing a two-state solution.

It is worth noting that numerous pro-Palestine activists argue in favor of a one-state solution, arguing that the creation of a Palestinian state beside Israel would not be sustainable. They add that the two-state solution, which is the only option considered by international actors, won’t solve existing discrimination, nor erase economic and military tensions.

(AFP, Al-Akhbar)

December 3, 2014 - Posted by | Economics, Ethnic Cleansing, Racism, Zionism | , , , ,

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