The natural gas issue is a decisive factor in the setting of Palestinian policy, not only in the economic sphere, but also in the political sphere, a senior Palestinian source told "Globes." He added that the negotiations on development of the Marine gas reservoir with Greek energy company Energean, which "Globes" reported early last week, would probably advance according to the security situation.
The source admitted that a military conflict between Hamas and Israel would be likely to derail the talks. He also said that the advantages of cooperation with Israel, especially the use of Israeli infrastructure, were causing economic experts to take an unequivocal stand against breaking off economic relations with Israel. According to the source, economists in the Palestinian Authority (PA) in cooperation with the World Bank were preparing an economic vision for the PA in which the Marine gas field plays a key role.
The Palestinian leadership, on the other hand, is assuming an inflexible stance ahead of possible publication of the principles of the US plan, while at the same time trying to promote measures aimed at implementing a decision in principle to sever economic ties with Israel.
The Palestine Liberation Organization (PLO) Central Committee a body with no executive authority that also includes representatives of the economic sector, is due to convene next week to discuss practical plans for economic separation from Israel. The Central Committee will thereby implement a decision in principle taken by the Palestine National Council in April.
The proposals likely to be discussed include a ban on purchases of Israeli products while developing and manufacturing substitute Palestinian products. The test case of the Israeli Bamba peanut snack indicates that the market forces and popular taste are still stronger. A Palestinian substitute for Bamba is produced in the PA, but the Israeli product is still especially popular; despite the attempts to boycott it, it is selling well.
The boycott is not taking popular hold
Bamba is only an oddity. Palestinian economists have warned PA chairperson Mahmoud Abbas that at this stage, the PA is unable to stand on its own economically and that the efforts to separate it will cause the collapse of its main economic sectors. A new Palestinian currency without monetary backing and a strong economy will therefore not succeed. Israel controls the borders, including the movement of goods in and out of the PA, and collects taxes for the PA. Much of the PA's infrastructure also depends on Israel, such as the fact that some of the electricity supplied to the Palestinians comes from Israel. As if that were not enough, Palestinian imports from Israel account for two thirds of total Palestinian imports and are equivalent to one third of Palestinian GDP. Until the Palestinians find substitutes for imports from Israel, economic separation is not feasible.
Even before the Central Committee convenes, the PA has begun to take practical measures, including attempts to force Palestinian businesspeople and company owners to avoid any connection with Israeli concerns. "Globes" has obtained a document sent by PA Minister of National Economy Abeer Odeh to Samir Zreik, head of the coordination council for the Palestinian private sector, containing a demand that Palestinian engineering and economic professionals not take part in tenders published by the Israeli Civil Administration in Judea and Samaria. The tenders are for economic and engineering consultation for construction and development plans in Palestinian communities in Judea and Samaria being promoted by the Civil Administration.
Odeh writes that this is being done in the framework of measures for separation from areas of the "occupation" and a ban on "normalization" with Israel. Response to this demand was partial, if any, indicating the difficulty that the PA will have in forcing such measures on the private sector, which is hungry for sources of income.
The political leadership is worried about the Gaza Strip
Something concerning the Gaza Strip is unquestionably cooking in the political kitchens, at least where attempts at providing it with economic aid are concerned. The global media, and also the Israeli and Palestinian media, are replete with reports about plans of the US, Egypt, Israel, and other countries, including economic concessions and development designed to bring relief, even if incomplete, to the expiring economy in the Gaza Strip. This is one of the reasons why Hamas is escalating the conflict - to increase the price of any plan and to make it clear that Hamas is sovereign in the Gaza Strip and nothing will move without it.
The PA, on the other hand, is opposed to any project in which it is not a partner. Abbas advisor Nabil Abu Rudeineh said this week that any proposal to build a port or any other project in the Gaza Strip without a political solution is an attempt to escape from reality. A political solution according to Ramallah is above all the return of full control of the Gaza Strip to Abbas and his men, a measure that does not appear on the horizon.
The proposals are divided between local bilateral plans, such as the Egyptian idea of a free trade zone in El Arish on the border with the Gaza Strip combined with opening the border crossings to goods, including the sale of Egyptian cement to the Gaza Strip (thereby bypassing the restrictions that Israel imposes on cement due to its use in the construction of tunnels). The Egyptians are talking about opening a route for marine trade via Cyprus, and it was reported this week that the Cypriots had accepted an Israel request to consider this possibility.
According to reports in the Arab media, this arrangement is also designed to include a long-term ceasefire. A delegation of senior Palestinian officials is scheduled to arrive Egypt at the end of the week to discuss these plans. Hamas will be very glad about these proposals, especially if it does not have to pay a high price for them. Israel is demanding that they not take place without the return of bodies of Israeli soldiers Oren Shaul and Hadar Goldin and the freeing of Israeli civilians Avera Mengistu and Hisham al-Sayed. It is unclear whether Egypt will agree to Israel's demand.
Israeli sources dealing in the matter have shelves full of economic plans for the Gaza Strip. Only a few of them can be implemented immediately. Some of them are already going ahead, such as the desalinization facility for which the tender for its construction is about to be published. The others are on a small scale, such as increasing the volume of trade with factories and sewing shops in the Gaza Strip. A senior diplomatic source revealed this week that discussions are being held with Cyprus on construction of a supervised loading dock that will increase the volume of trade with the Gaza Strip. The Cypriots are looking into the matter, but it is still only at an initial stage.
The leaks and press briefings by Israeli diplomatic sources about such Israeli plans are meant for the ears of Hamas and Abbas. Hamas is being told that there is a stick, an attack in the Gaza Strip, and there is a possible carrot for making thing easier for the residents there. For Abbas, the leaders are aimed at making him realize that Israeli will be unable to continue acting as his contractor in the Gaza Strip and suffering the consequences of the deteriorating situation there caused mostly by the wages cut and other sanctions that he is imposing on the Gaza Strip.
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2018
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