The Israeli occupation of the Gaza and the West Bank is costing the Palestinian economy nearly $6.9 billion a year -- about 85 per cent of its total estimated GDP -- claims a report released in Ramallah today.
The bulletin, compiled by the Palestinian economic ministry and the independent thinktank Applied Research Institute-Jerusalem, says Israeli restrictions prevent Palestinians from accessing much of their land and properly exploiting their natural resources while isolating them from global markets.
"Had the Palestinians not been subject to the Israeli occupation, their economy would have been almost double in size than it is today," it says.
While acknowledging scarcity of data, the report estimated losses at $6.897 billion in 2010, or 84.9 per cent of total Palestinian GDP, partly blaming the situation for making the Palestinian territories dependent on donor funding from the international community.
"The majority of these costs do not have any relationship with security concerns but, rather, come from the heavy restrictions imposed on the Palestinians in the access to their own natural resources, many of which are exploited by Israel itself, including water, minerals, salts, stones and land," the report reads.
The $6.9 billion loss is broken down into costs imposed by the blockage on Gaza ($1.9bn), restrictions on water ($1.9bn), on natural resources ($1.8bn), import and export limits ($288m), limitations on movement ($184m) and Dead Sea tourism ($143 million).
Gaza losses came from severe restrictions of imports and exports, continuous disruption to its electricity production, limited access to sea resources and the continued shelling of its infrastructure.
Water in the West Bank is just one of the resources to be restricted by the occupation, the report adds, pointing to limits on irrigated agriculture and Israel's exploitation of much of the gravel and stone mined in the West Bank. Gas fields discovered off the shore of Gaza are also off-limits to Palestinian use, it says.
Since 1967 some 2.5m trees, including olive groves, in the West Bank had been uprooted for settlement-building, Israeli-used infrastructure and the separation barrier. Annual production of a fully-grown olive tree was estimated at 70kg, with a price of some $1.1 per kilogram.
Restrictions on Palestinian access to the Dead Sea also meant a loss in income from the extraction of minerals and salts, and from tourism, both of which Israel has exploited in its favour.
The occupation also hinders the Palestinians' fiscal balance, the report says, by directly preventing an efficient collection of taxes at the international borders, and indirectly, by artificially reducing the size of the Palestinian economy and therefore its tax revenue base.
Direct fiscal costs of the occupation were estimated at $406m per year, while the indirect costs were placed around $1.389bn.
The report's compilers said it was the first attempt at providing a systematic quantification of the effect of Israeli restrictions in stifling Palestinian economic development.