A critical-analytic review of
“The Civil Administration, Judea and Samaria, Annual Report, 18th year of Administration, 1984”

The Israeli authorities in the occupied West Bank and Gaza Strip have so far published English translations of two annual reports entitled “The Civil Administration on the West Bank”. Despite the word “civil” in the title, the report in fact covers all the activities of the military government in the area.

Nearly one half of the Report for 1984/85 (which is the later of the two) is concerned with economic affairs. The predominance of economic matters reflects Israel’s determination to continue and deepen the drive to exploit the West Bank’s economy and to integrate it into the Israeli economy. The “legal” framework for this drive is provided by Military Orders issued by the military government. By mid-1984, a total of 1950 Military Orders (including amendments) had been issued, of which 935 ‒ almost one half ‒ directly concerned economic matters: taxation, customs, banking, finance and insurance, industry and crafts, commerce, land and water, labour and so on (“Recent Economic Developments in the Occupied Palestinian Territories”, United Nations Conference on Trade and Development, Geneva, 30 June 1986, p. 3).

Despite the heavy concentration on economic matters, the Report artificially ‒ but intentionally ‒ contains political conclusions regarding the West Bank’s recent political development. These political conclusions reflect Israel’s aims and ambitions rather than the realities of the situation on the West Bank.

Thus, in line with Israeli policies, plans and wishes to root out support for the PLO in the West Bank, the Report’s introduction claims: “Increasing divisions within the ranks of the PLO caused a continuous decline in the PLO’s support and influence in the area”. While attributing what it describes as decline in the PLO’s support to the latter’s “internal divisions”, the Report emphasizes that “Jordan’s influence has increased considerably”. In this connection it notes: “Jordan has intensified efforts to strengthen its influence by intervening in various aspects of life, thus exploiting the decline in the PLO’s support in the area”.

The Report fails to mention what enabled Jordan to “intervene in various aspects of life”; nor is it frank about the main reason for whatever decline, if any, has occurred in the PLO’s influence (and no concrete evidence is provided for such decline!). The truth of the matter is that, for political reasons of their own, the Israeli authorities, which control all aspects of life on the West Bank, have facilitated Jordan’s activities there, while harshly suppressing any activity initiated by the PLO.

In several places the Report reiterates the claim that the policy of the so-called Civil Administration has steadily improved the “quality of life” on the West Bank and that an effort has been made to improve existing services provided to the population. These claims are contested not only by Palestinians. Meron Benvenisti ‒ an Israeli Zionist researcher, who regards the West Bank’s annexation to Israel as an accomplished and irreversible fact ‒ said: 

“The Israelis want the benefits of integration without its burdens. Formal integration would have meant extending the social welfare system that dominates the economic scene in Israel ‒ selective taxation, massive subsidies, massive aid in recessive periods, differential tariffs etc.” (Quoted in OXFAM Annual Report for the West bank, Gaza Israel and Jordan, 1985, p. 5).

 It has also been pointed out that the West Bank and Gaza Strip are sources of net profit to Israel. As a United Nations report discloses:

“Thus Ii 1984 the territories transferred to Israeli authorities the sum of $185 million, equivalent to more than twice the amount transferred [into the territories] from abroad, eleven times the transfers to the territories from the Israeli government and Palestinian local authorities, 40% of the wages bill from employment in Israel and abroad, and 17% of GDP (United Nations Conference, op. cit., p. 5).

 Moreover, despite all Israeli claims, Israel provides no development budget for the West Bank and Gaza Strip (OXFAM Report, op. cit., p. 5). Without a development plan, how could Israel improve the quality of life in the Occupied Territories? The truth is quite the reverse: transfer of money from the West Bank to Israel is one of the ways in which Israel benefits from the economic incorporation of the West Bank.

The Workforce

The Report says that in 1983 the workforce (those in employment plus job-seekers) on the West Bank numbered 160,000, an increase of ten per cent over 1982. Of these, 154,000 were employed, that is, an increase of 7,000. Of the 154,000 employed, there were 61,000 self-employed and 93,000 hired workers. Of the self- employed, 2,000 worked in Israel. Of the hired workers, around 45,500 were employed in the West Bank itself and 47,500 in Israel. The 7,000 increase in the workforce include 2,000 employed in Israel and 5,000 in the West Bank (The Civil Administration, Judea and Samaria, Report, 18th Year of Administration, April 1, 1984 ‒ March 31, 1985, p. 13. In what follows we shall refer to this source simply as “Report”).

The proportion of self-employed workers on the West Bank decreased, despite the increase in their absolute numbers during 1982-84. The numbers of self-employed workers were 57,8OO and 59,600 in 1982 and 1983 respectively; but their share in the total decreased from 41% to 40% in the same period (deduced from the Israeli Statistical Abstracts, 1985, p. 729).

In 1983, the number of self-employed workers increased by 1,800 compared to the l982 figure, while the number of those employed in Israel rose by 4,400. These two figures add up to 6,200; whereas the total increase in the workforce for the same period was 6,700. It follows that the balance of 500 is the increase in the number of those employed inside the West Bank. The increase in the number of self-employed workers from 1982-83 to 1983-84 was 1,000 while the increase in the number employed in Israel was 2,100. These two figures add up to 3,100; whereas the total increase of the workforce for the same period was 6,900. The balance ‒ over one half of the total ‒ represents those employed on the West Bank.

The rapid mobilization of West Bank labour into the Israeli economy illustrates the incorporation of the former’s economy into the latter’s. Note also that Israeli capitalists had a free hand to employ 4,400 additional West Bank workers in 1983, and only 500 in 1984.

According to the Report’s estimate, the number of unemployed was 6,000, that is about 3.8% of the total workforce. Other sources give much higher estimates. The ILO report, for example, states that “unemployment in the Occupied Territories reached 14%” (ILO Report, 72nd Session, Report of the Director general, Geneva, 1986, p. 42).

The Israeli Report (p. 14) states that by 1984 the number of unemployed graduates had reached 4,000. This is two thirds of the total number of unemployed according to Israeli estimates. The total number of graduates was 56,000, distributed as follows: 29,000 worked in their field of specialization, 13,000 found employment in other occupations, 10,000 continued their studies, and 4,000 were unemployed. In addition, 8,000 resided abroad. If we add the number of those abroad to that of the unemployed, we get a total of 12,000 graduates who are unable to find jobs inside the West Bank; this is about 19% of the total number of graduates.

Among the 4,000 unemployed graduates, there are 3,600 ‒ that is, 90 per cent! ‒ under 30 years old. Youth unemployment is one of the factors that encourage emigration, which is in line with Israel’s aim to retain control over the West Bank area, but without most of its people.

Population and Emigration

 The Report notes that “the population [of the West Bank] at the end of 1984 stands at 787,000, that is an average increase of 20,000 per year” (p. 13).

Even if we leave aside matters such as the mortality rate and the absence of any sort of public health care, we must note that although the Report covers a period of two years only, it is full of distortions and misinformation, and conceals many vital facts.

The Report completely ignores emigration of West Bankers to the Arab countries. As a matter of fact, the emigration of people, who for the most part belong to economically active age-groups, relieves the Israeli authorities of responsibility for their employment and brings down the unemployment statistics. By emigrating, workers not only withdraw from the national struggle against the occupation, but also help to finance the occupation’s economy through the remittances to their families on the West Bank, which exceed $350 million a year (Associated Press report, 14 April 1985), since the population there is a captive market for Israeli goods.

The increase in emigration gives the lie to Israeli claims that the quality of life in the Occupied Territories is “Improving”. Changes in the size of the West Bank population over recent years demonstrate how the occupation regime is evacuating the Occupied Territories. The population of the West Bank before the 1967 war was 934,500; in 1968, following mass expulsions, it went down to 603,000 and by 1980 had increased only to 704,000. This represents an annual rate of increase of barely 1.2% for the period 1966-90, going down to as little as 1% in the last year (S. Dajani, Samid al-Iqtisadi no. 61, 1986, p. 34).

During the period 1967-84, the West Bank population fell by about 16%. This drastic drop was caused by expulsion and emigration. The natural rate of increase of the Palestinian West Bank population is about 3% per annum. Given the 1967 figure of 934,500, the population should have reached about 1,415,000 by 1984, instead of which it reached only 767,000. The shortfall of 628,000 represents loss through emigration. Another Israeli source gives an even higher estimate; it puts the number of emigrants from the West Bank by 1980 at about 800,000 (The Administered Territories Statistical Quarterly, vol. X no. 3, 1980, p. 2).

In the period 1968-80, the number of those emigrating from the West Bank specifically in search for work was 140,000, and in 1982 alone the number was 25-30 thousand (Mustafa Walid, Samid al-Iqtisadi no. 46, 1983, p. 79). These two figures add up to 165 or 170 thousand ‒ which exceeds the total West Bank workforce, including those working in the area itself and in Israel, as well as the unemployed!

Workforce Employment

According to the Report (p.14), the total employed workforce of the West Bank in 1984 was 154,000. This number is broken down by sector of employment, as follows:

The number of those employed inside the West Bank itself was about 104,000, which amounts to 68% of the total employed workforce living in the West Bank, but only 46% of the total West Bank workforce if we count also those working in the Arab oil countries. This reflects the deformed structure of the West Bank workforce, since some 54% of it is producing surplus value directly for other economies. To this we must add the fact that these workers employed outside the West Bank, especially in Israel, are on the average less well paid than the local workers.

The sectorial distribution of those employed inside the West Bank is given by the Report (p. 14) as follows:

From this table alone we cannot see the change in the sectorial distribution of the workforce. The following table, taken from another Israeli source (Israeli Statistical Abstract, op. cit., p. 725), reflects the structural change in the West Bank economy. It gives the sectorial distribution of employment inside the West Bank in selected years.

These figures reveal a sharp decrease in agricultural employment. The shift was not towards industry, which stagnated and even declined, but mainly towards the services sector. The Report (p. 14) gives the number of West Bankers employed in Israel as 50,000, with the following sectorial breakdown:

The figures in the table actually add up to 53 rather than 50 thousand. Another discrepancy is in the number of West Bankers employed in agriculture: the Report gives a total figure of 35,000, while the sectorial breakdown tables give the figure of 30,000 for those employed inside the West Bank and 8,000 in Israel.

The most remarkable fact shown in the last table is the high concentration in construction: about half of the West Bankers employed inside the green line work in this sector (doing the most arduous and badly paid jobs). In fact, according to the Report (p. 14), West Bankers constitute one third of the labour-force in Israel’s construction sector. The corresponding figures for other sectors are: 1/14th for agriculture, 1/38th for industry and 1/100th for public services.Agricultural production Before discussing the contribution of agriculture to the gross domestic product (GDP), let us first look at the changes in the GDP Itself.

The contribution of GDP to the gross national product (GNP) has been falling steadily in past years from 75% in 1981 down to 73% in 1983 and reaching an all-time low at 56% by 1984. (The rest of the GNP consists mainly of inflows such as remittances sent by emigrant workers to their families in the West Bank.) The growth rate of the GDP itself was 2.9% in 1980-81 and 0.4% in 1983-84. In absolute figures, the GDP in 1984-5 fell back to $1,085 million, about the same as in 1980 (United Nations, op. cit., p. 4).

The stagnation of the GDP and the decline in its contribution to the GNP are clear evidence to the continual deterioration of the West Bank’s economy. Indeed, Benvenisti’s estimates paint an even gloomier picture of the West Bank’s GDP. He notes:

“The official figures regarding Palestinian GDP show that in 1983 it remained at the same level of 1980, that is $810 million approximately. GDP dropped in 1984 as a result of a drop of 10%-15% in agricultural production, caused by a severe drought” (M. Benvenisti, “The West Bank, Data-base Project Report, 1986”, p. 5).

The drought of 1984 was real enough, but it does not explain the reasons for the decline in the GDP’s contribution to the GNP in previous (and subsequent) years. What Benvenisti does not mention is that one of the main reasons for the decline was a decrease in the area of cultivated land on the West Bank.According to the Report,

“Agricultural produce was lower [in 1984] because less land was cultivated, and the yields were smaller, especially of winter crops. Wheat production reached 25,000 tons, that is 46% of the 1983 yield. Vegetable production decreased by 7%-8%. Melon production increased by 7%, in spite of an increase in [melon-growing] land cultivated [by] 24%” (p. 22).

However, the report does not draw attention to the fact that the decrease in the cultivated area was largely caused by expropriation of peasants’ land and the establishment of Israeli settlements.

Statistics covering a longer period enable us to see the extent of the decline in the cultivated area. “The cultivated land on the West Bank in 1965 was 2,435,000 dunams, including irrigated areas of 322,000 dunams, that is 13%. By the end of the 1970s, the cultivated area had gone down to 1,574,000 dunams and the irrigated part decreased to 86,000 dunams” (A. Shqir, Samid al-Iqtisadi op. cit., p. 169. Other sources estimate the cultivated area on the West Bank in 1967-68 at 2,614,000 dunams. A dunam is 1,000 square meters and equals a tenth of a hectare or a quarter of an acre).

According to Dajani, the cultivated area decreased by 36% during the period 1967-1984. It is therefore quite clear that land expropriation is the major reason for the decrease in agricultural production.

The share of agriculture in the GNP has been falling steadily, from 32% in 1978 down to 28% in 1984, while that of trade, personal services, transport etc. has been rising, from 26% up to 33% during the same period (United Nations, op. cit., p.5). The value of the agricultural produce in 1984 was about $250 million, compared to $300 million in 1983 and $320 million in 1982. This steady decline contrasts sharply with the period 1966-1981, when the value of the agricultural produce rose at an average annual rate of 6%-9%” (Benvenisti, op. cit., p. 9). In fact, all the sources to which we have referred, despite differences in their estimates, concur in emphasising the decline of the GDP, the agricultural output, and the cultivated area.

The Report’s treatment of the water question is highly misleading. The following quotation is an example of intentional misinformation: “Requests for drilling [water wells) were examined and yearly licenses were granted to well owners” (p. 63). The Report fails to mention at this point how many licenses were granted, where the licensed wells are located and what is their capacity.

A glimpse of the truth is revealed when the Report says: “Irrigated land decreased in size for the following reasons: 1. High prices ‒ 100 shekels per cubic metre of water, thus preventing farmers from growing vegetables in the summer months, and their inability to compete due to high expenses, while vegetables in Israel were cheaper;  2. Farmers have now turned to growing water-melons intended for export to the East Bank” (p. 21).

However, the Report does not tell us by how much the irrigated area has decreased. In fact, the decrease was from 322,000 dunams in 1965 down to 85,000 dunams by 1986 ‒ a loss of 74% (Dajani, op. cit., p. 34). Yet the irrigated area expropriated and handed over to Jewish settlements amounted to 67,000 dunams in the Jordan Valley alone (Ghondour, Samid al-Hqtisadi, 1983, p. 11).

Industry

The industrial sector on the West Bank is meagre, stagnant and undeveloped. “There were 2,410 factories operating in the area in 1983, with 8,550 workers (including employers). The average number of workers in a single factory is 4,” says the Report (p. 15).

The number of employees, out of the total workforce in the industrial sector, is around 6,000. The Report adds that “25% of the employees work in textiles” (p. 15). In fact, most of the textile workshops were set up and operate under sub-contracts to satisfy Israeli needs rather than for the domestic market; hence they form an integral part of the Israeli economy. In view of this, the true number of those working in the industrial sector of the West Bank proper is far lower than that given by the Report. Moreover, only 16% are employed in metal-working (Report, p. 15). So it becomes clear that most of the “Industrial” workers are employed seasonally in oil-presses or in quarries, rather than in manufacturing industry proper.

As for industry’s contribution to the GDP, the UN report notes: “In the period 1978-84 the share of industry in the GDP fluctuated between 7%-9%” (United Nations, op. cit., p. 6). Another source, which covers a longer period, reveals: “On the West Bank, the contribution of the industrialized sector to the GDP in the past ten years declined from 9.0% to 6.5%” (Harold W. Dick, from a synopsis to a paper presented to the Welare Association International Symposium, Oxford, 3-5 January 1986).

A very similar conclusion is reached by Benvenisti, who covers an even longer period:

“The share of the industrial contribution to the GDP fell from 9% in 1968 down to 8.2% in 1975 and to 6% in 1980… and the absolute number of those employed in the industrial sector during the period under review remained unchanged (16,000 people), but only 9,550 (9% of the total employed in the West Bank) were employed in industrial plants. The rest worked in quarries and olive presses” (Benvenisti, op. cit., p. 10).

 The West Bank’s industries cannot compete with those of Israel, which are more sophisticated. Besides, the former lack the protected domestic market and government subsidies enjoyed by the latter. Moreover, West Bank firms cannot in general import raw materials or export their output, except through an Israeli third party. Some firms, such as the plastics company in Beit Sahur, are allowed to import raw materials through Jordan, provided that an equivalent amount of the output is exported back to Jordan.

The Report notes: “The officer for trade and industry is the only authority which grants export and import licences to and from the area” (p. 28). The following table illustrates the role of that officer in deepening the incorporation of the West Bank’s economy into that of Israel:

This table shows that the number of licences granted to imports from Jordan as well as from abroad was reduced in 1984-85 to less than a quarter of what it had been seven years earlier. During the same period, the number of export licences to Jordan went up, although not as drastically as the decline in imports.

The reason behind the sharp reduction in imports s clear: the people of the West Bank are being compelled to consume Israeli products, and to do all their importing and exporting through Israel. This is why the Report has nothing to say about exports from the West Bank to foreign markets.

Quarries

Quarries account for 16% of the total workforce in industry. But half of the quarries’ produce is exported to Israel (ibid, p. 19). This explains the setback which the quarries suffered in 1984, as a result of Israel’s economic slowdown. In fact, this branch is particularly dependent on the Israeli economy.

Ominously, the Report says: “A few requests for opening lsraeli gravel quarries in the Samaria area have not yet been approved. This is due to questions relating to land registration and ownership” (p. 31). Note that approval has been withheld for purely technical rather than political reasons. This implies that Israel is poised to extend the scope of its policy of colonization of the Occupied Territories.

Customs

According to the Report, the West Bank Customs unit consists of 67 Israelis and 30 local workers (p. 24). It is in fact one of the very few “Civil” Administration units in which the number of lsraeli employees exceeds that of West Bankers. (Thus, the staff of the Statistics unit consists of three Israelis and 31 locals, and that of the Comptroller unit is three Israelis and six locals.) The reason for the high proportion of lsraelis in the Customs unit is that the Israeli authorities are extremely keen on extracting the largest possible amount of money in custom duties and taxes from the population of the West Bank.

The occupation authorities collect import and private trade duties from Palestinians at the Jordan bridges. In contrast, no duty is paid by Israelis who market or buy goods on the West Bank. As the West Bank is integrated into the Israeli economy, Israelis can freely market their goods and services on the West Bank. But the converse is not true, as the occupation authorities impose heavy restrictions on the movement of goods in the opposite direction. This form of integration is one that benefits Israel only.

Let us note here that the policy of open borders between the West Bank and Israel lends support to the widely held belief that Israel is intent on annexing the West Bank, waiting only for an opportune moment to do so.

Since August 1976, Israeli VAT has been levied on the West Bank ‒ yet another instance of the general policy whereby the West Bank is forced to share the burdens of the Israeli economy, but not its benefits. Another instance of this is the Local Produce Tax, which according to the Report is levied on “beverages, chocolate products and cigarettes” (p. 25).

The increased burden of taxation contradicts Israeli claims that life on the West Bank is “improving”. The Report informs us that in 1984 VAT revenues were higher by 32.9% in real terms compared to 1983; and the increases in revenues from Income Tax, Stamp Tax and Local Produce Tax were 39%, 19.3% and 38.9% respectively (pp. 25-6). Note that this severe tightening of the taxation screw took place in a year when agriculture was suffering the effects of drought, and remittances from abroad into the West Bank went down. In fact Israel is using the West Bank as a milch-cow.

Electricity and Durable Goods

The Report notes that use of electricity is a measure of the standard of living. It goes on to inform us that 86% of all West Bank households use electricity; of these, two thirds have electricity all day long, while one third have it for part of the day (p. 16).

The Report omits to mention that the financial source of the electricity supply, as well as that of consumer durables, is not Israeli. The outward indications of prosperity ‒ use of electricity, a high literacy rate, ownership of TV sets and other consumer durables ‒ are achieved in spite of, rather than because of, the Israeli policies which are in fact designed to drive people out of the West Bank. The increase in durable goods is due to the remittances sent by tens of thousands of Palestinians working in the Arab Gulf and elsewhere to their families on the West Bank. To this should be added the contribution of the Arab Steadfastness Fund, which in the period 1979-83 injected an annual average of $75 million into the area. (An official PLO report puts the figure of Steadfastness Fund contributions at $87 million a year, or a total of $435 million since 1980 (ibid, pp. 5-6).

General comment

In this review we have confined ourselves to the economic aspects of the Israeli occupation of the West Bank. As we have pointed out, the economy of the occupied West Bank has become dependent on and incorporated into the Israeli economy. This dependence and incorporation have been effected, and are steadily intensifying, by means of the military embrace of the occupation. It is not merely a matter of unequal exchange, as is the case between a developed economy and a formally independent but underdeveloped one; rather, it is a matter of forcible subjugation. In the case of the West Bank, the forces of occupation guard over market forces, resulting in a large deficit in the trade with Israel.

No matter how you look at the West Bank – over .short periods or In the longer tenn, with a cursory glance or through the microscope of deep research – the conclusion Is the .same: its economy has become peripheral to that of Israel. 

The process of peripherallzatlon ls not confined to the unequal exchange between the two economies, but is entrenched directly at_ the level of production: the West Bank is coerced into proroducing what Is demanded by the Israeli economy or by Its foreign exchange requirements.

The peripheralization also has social aspects, defonning the structure of the social classes. In this review we have dwelt on the issue of commuters and migrant workers – the fonner employed In Israel, the latter In the Arab oil countries. Our analysis shows how the West Bank’s labour-force – a locally produced com¬modity – has been channelled to the needs of other economies. This emphasises the peripherallzatlon of the West l:lank’s economy to other economies, mainly that of Israel.