Gaza Strip
Israeli policies following Israeli military occupation

In 1984, former deputy mayor of Jerusalem, Meron Benvenisti, described Israeli policy in the occupied territories as motivated primarily by the notion that Palestinian claims to economic and political rights are illegitimate. He wrote that the economic policies stifle Palestinian economic development with the primary goal of prohibiting the establishment of a Palestinian state.

Sara Roy describes Israeli policies in Gaza as policies of "de-development," which are specifically designed to destroy an economy and ensure that there can be no economic base to support local, independent development and growth. Roy explains that the framework for Israeli policy established between 1967 and 1973 would not change, even with the limited self-rule introduced by the Oslo Accords in the 1990s, but would grow dramatically more draconian in the early 2000s.

Israeli economic policies in Gaza tied long-term development directly to conditions and interests in Israel rather than to productive domestic structural reform and development. With reduced access to its own resources (largely deprived of them as a result of Israel policies), Gaza's economy grew increasingly dependent on external sources of income. Israeli policies under the authority of the military government exacerbated dependence while externalizing (or reorienting) the economy towards Israeli priorities. This reorientation of the economy included shifting the labor force away from developing domestic agriculture and industry towards labor-intensive subcontracting jobs supporting Israeli industry in addition to unskilled labor jobs in Israel itself. Notably, the Israeli government barred Palestinians of Gaza from taking white-collar roles in public services (with the exception of services such as street cleaning). In 1992, 70% of Gaza's labor force worked in Israel, 90% of Gaza's imports came through Israel, and 80% of its exports went through Israel.

Israeli efforts to expand employment within Gaza were largely through relief works, which, as a purely income-generating project, does not contribute to development. The Israeli military government's expenditure on industry in the Gaza Strip between 1984 and 1986 was 0.3% of the total budget, with the development of industry receiving no investment at all. Despite the worsening living conditions in Gaza, the Israeli government continued to invest minimally throughout the military government's rule. The Gaza budget did not impose any financial burden on Israeli taxpayers, despite statements from Israeli officials that limited investment was due to financial constraints. From the 1970s and throughout the duration of the Israeli military government's authority, income tax deductions from Palestinians in Gaza exceeded Israeli expenditure, resulting in a net transfer of money from Gaza into Israel. Throughout its authority, the Israeli military government maintained a budget with little to no capital investment in Gaza. Additionally, the fiscal system resulted in a net outflow of domestic resources from the Palestinian economy.

The result was the continuous transfer of local resources out of Gaza's economy and the increased vulnerability of the economy to external conditions such as Israeli market needs, but most vividly seen by the impacts of the current Israeli blockade and Israel's destructive military campaigns in Gaza. The economy's extreme dependence on Israel during this period is highlighted by the fact that by 1987, 60% of Gaza's GNP came from external payments, primarily through employment in Israel. Israeli policies also undercut any potential competition from Gazan products through generous subsidies to Israeli agriculture. Further, Israel banned exports to all Western markets, and enterprises that might compete with Israeli counterparts suffered as a result of the military authority's regulation. For example, permits from military authorities (which could take five years or longer to acquire) were required in order to plant new citrus trees or replace old ones, and farmers were prohibited from clearing their own land without permission. In addition, military authorities constrained fishing areas to prevent any threat of competition with Israeli products. Even juice and vegetable processing factories (which could make productive use of crop surpluses) were prohibited by the Israeli government until 1992. As Sara Roy describes, Gazan "conomic activity is determined by state policies, not market dynamics."

Policies of the Israeli military authorities in Gaza also restricted and undermined institutions that could support and plan for productive investment and economic development. Permission was required, for example, for the development of any new programs and for personnel change. Permission was also required to hold a meeting of three or more people. From the start of the occupation until 1994, municipalities did not have authority over, for example, water and electricity allocation, public markets, public health, and transportation. Decision-making and the initiation of new projects required the approval of the military governor. Even under the Oslo agreement, Israel maintains authority over zoning and land use. Further, municipal governments had no authority to generate revenue. Specifically, they could not introduce taxes or fees without approval from Israeli authorities. Accordingly, municipalities and local institutions often relied on donations from external sources, although access to the funds was often denied even after they had been deposited in Israeli banks. At the start of the occupation, the military government closed all Arab banks in the occupied territories. Branches of Israeli banks were allowed to transfer funds and provide services for importing and exporting businesses. Further, no banks were allowed to supply long-term credit, which seriously limited the potential for economic development.
language:response_language[German]