Despite a new Arab Summit at the end of the last month, endorsing Palestinian positions, the try to relaunch a peace plan that offers Israel full ties in exchange for Palestinian statehood is likely to remain a sweet dream. At the opposite, all signals are pointing a new sequence of violence in the Palestinian territory.

The U.S. position
The Senate confirmed David Friedman, an active supporter of Israeli settlements and opposition to a two-state solution, as U.S. ambassador to Israel. President Trump vowed during last year’s presidential campaign to move the U.S. embassy from Tel Aviv to Jerusalem. However, he seemed to step back from the seeking a two-state solution. At this stage, the position of the new President and his policy in Middle-East remains a mystery.
The previous U.S. administration did not do a lot to fix a conflict which poisoning the region for the last sixty years, but in the shadow U.S. officials acting a lot to put down pressures between both parties. During the Obama years, we saw a Gaza crisis roughly every two years.

No help from the Israeli government
In this last resolution, the UN point out that Israel has ignored resolution to stop settlements in the Palestinian lands. In January alone, two major announcements were made for a total of 2,500 new houses in existing West Bank settlements. Many of the advancements that were made in the past three months will further sever the territorial contiguity of a future Palestinian state and accelerate the fragmentation of the West Bank.

A political situation explosive
The Hamas is upgrading its attack capabilities. The organisation sent test launches of upgraded rockets out to sea. In plain site from the Israeli side of the border, Hamas brazenly digs new tunnels. At least 15 of them, according to Israeli estimates, now extend under Israeli territory.
The new leader of Hamas in Gaza, Yahyah Sanwar, – elected in the last February -, is considered to be harder-line and closer to the Izzeddine Al-Qassem military wing of the movement than his predecessor, Ismail Haniyeh.
In the meantime, more extreme movements are growing in Gaza. Rockets are fired by Salafist groups into Israel, actions that do not suit the Hamas timing. Indeed, the organisation is trying to distinguish itself from the Muslim Brotherhood (hated by Egyptian President Abdel Fattah al-Sisi) in order to improve its own standing with Cairo.
Egypt controls the Rafah crossing at Gaza’s southern end, often the only passage through which citizens and Hamas leaders can leave.

An economy under perfusion
The situation remains extremely difficult. According to the World Bank, unemployment rate exceeds 40% in Gaza and 30% in total with the West Bank, – it exceeds 50% of total young adults -. The remittances from Palestinian workers failed as the number of entry permits in Israel has been reduced. Palestinian territory is heavily dependent on Israel. The number of Palestinians labourers working in Israel amounts about 130,000 people.
Labour relations are not the only factor undermining the Palestinian economy. Israel collects tariffs on goods entering the territories before delivering them to the Palestinian Authority, in addition to collecting value-added tax on goods intended for consumption. These payments comprise three-quarters of the revenues of the Palestinian Authority, which gives Israel critical control over the Palestinian economy. Some 55% of Palestinian trade is with Israel, with exports made up between 18% and 19% of Palestinian GDP last year, with imports rising from to 59% from 56%. The Palestinian trade deficit has been growing and now stands at $5.2 billion.

In 2016, industrial production rose 0.96% in 2016 after two negatives years (-3,9% in 2014 and -3.8% in 2015). However, the main reason was a strong decrease in oil price. Private consumption doubled in the past decade, but that was fed by foreign aid rather than domestic output. Agriculture and industry’s share of output has declined from 30% of the economy to 15%. While there are small signs of an improved industrial economy in the West Bank, the situation in the Gaza Strip continues to bring down the overall Palestinian economy and the GDP.

Palestinian GDP per capita is still very low compared with neighbouring countries, averaging $2,867 in 2015 versus $3,615 in Egypt and $4,940 in Jordan. The reality is that the Palestinian economy is under perfusion, depending on international aid and the will of Israel. A UN report from September 2016 asserted that Israel’s control of the 60% of the West Bank designated Area C, which is subject to Israeli administration and security, is the biggest factor behind chronic unemployment. Israeli checkpoints make finding and travelling to jobs in the Palestine an arduous tasks.

A recipe for a new explosion of violence in 2017
Political uncertainties, an unclear U.S. policy position, new extremist leaders and Israeli restrictions have created an explosive cocktail. The environment is highly unfavourable to any economic improvements. More importantly, the primarily component of any positive change has disappeared. Indeed, hope is missing and lost.

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