Economic relations between Palestine and Israel during the occupation era and the period of limited self-rule

Abstract EN

This paper intends to analyze the dynamics of the relationship between the Israeli economy and the Palestinian economy as they have evolved during both the occupation period and the past six years of limited self-rule.

The analysis of the relationship is within the context of two opposing effects: a positive one that tends to help the Palestinian economy expand, develop and grow, and a negative one that tends to retard economic evolution and reinforce underdevelopment.

The paper identifies the practices and policies of successive Israeli governments’ as being responsible for incapacitating the normal operation of market forces and blocking the positive spread effects as well as bolstering the negative backwash effects.

The changes brought about by the limited self-rule are examined and illustrations given as to how these changes have failed to alter the essential dynamics of Zionism, which therefore, could not arrest the cumulative movement of the backwash effects which continue to weaken the Palestinian economy.

The paper also examines the prospects for future relations between the two economies based upon a more equitable economic environment.