Palestinian Authority Prime Minister Salam Fayyad called upon Palestinians on Saturday to boycott Israeli products, as a response to the Netanyahu government’s decision not to transfer to the PA the taxes and customs duties it is due to receive.
Fayyad also promised that his government was examining ways to bring about an official boycott that would obligate all inhabitants – one that would not be just a recommendation.
He said that the boycott is aimed at causing Israelis who are harmed by it to act to change their government’s decision, which he called a piratical act of aggression.
At first glance, the Palestinians do indeed have something to boycott: About 70 percent of all imports into the Palestinian territories come from Israel. In 2011, out of total imports of $4.222 billion, $2.939 billion was from Israel.
However, a closer examination of the figures for Palestinian trade with Israel, of which Fayyad is no doubt well aware, shows that he is thinking about the internal Palestinian political atmosphere and not about damage to the Israeli economy. The economic damage that a Palestinian boycott would cause Israel is trivial, as the Bank of Israel already checked and calculated in 2010 – at the height of the talk about a boycott of goods. The examination was carried out by the research department at the bank, on the basis of the 2008 data, and its findings and conclusions appeared in October 2010 in the periodic publication “The Recent Economic Developments, May-August 2010.”
According to that study, sales to the PA constituted only 0.9 percent of the revenues in the Israeli economy and less than 2 percent in each of the following industries: agriculture, trade, insurance and banking. Sales from Israeli industry to the Palestinian territories accounted for only 0.5 percent of the industry’s revenues.
They concentrated mostly in traditional industries like food, beverages, wood, paper and metals, and they ranged around 2.5 percent of the revenues in those industries. Higher revenues came from the sale of water and electricity to the Palestinians – 5 percent. However, it is doubtful that Fayyad is suggesting to the Palestinians that they decrease their consumption of water and electricity.
The Bank of Israel research department study also showed that the added value (additional work places for Israelis) stemming from sales of Israeli products to the Palestinians is also very small. In 2008 it amounted to about NIS 1.5 billion – approximately 0.15 percent of Israel’s gross domestic product.
The high figures for Israeli exports to the Palestinians are also deceptive for another reason: As the Bank of Israel notes, about 38 percent of the sales are transfer sales, in which Israeli commercial firms transfer products originating abroad to the Palestinians. Another 20 percent of the total sales are fuels originating abroad. A source at the Bank of Israel has told Haaretz that even though the examination was carried out two years ago, presumably there has not been any major change in the distribution among the kinds of products exported to the Palestinians and their origins.
A policy for the boycott of essentials requires offering the Palestinians an alternative – and this does not mean living on olive oil and hyssop (as Hamas Prime Minister Ismail Haniyeh once proposed to the inhabitants of Gaza) proposed. The solution is the encouragement and protection of Palestinian industrial production and local agriculture. However, the development of these aspects of the Palestinian economy is limited in advance by the quotas Israel imposes on water, its control of about 62 percent of the West Bank and the prohibition of exports from the Gaza Strip. Those who are trying to deal with these difficulties in industry and agriculture are not able to boycott raw materials imported from Israel.
In 2011, the value of Palestinian exports was $720 million – an increase of 25 percent relative to 2010. Most of the exports – a total of $618 million – went to Israel. The Palestinians exported goods worth $39 million to Jordan, while Europe received only $15 million (less than the sales volume of Ahava cosmetic products in the European market). Anyone calling for a Palestinian boycott must take into account that Israel is likely to answer such a move with a prohibition on importing Palestinian goods into its territory.
Since 2008 there has been a decrease in the imports from Israel. In 2008 they stood at about $3.2 billion. In 2011, as noted, according to the Palestinian Central Bureau of Statistics there was a decline of 2.3 percent relative to the previous year. The extent of imports from other countries increased. For example, in 2011 the extent of imports from Europe was $444 million, 20.8 percent more than in 2010. (The figures do not include goods that come into Gaza through the smuggling tunnels.) The Palestinian Central Bureau of Statistics notes that imports from Jordan went up by 33.6 percent but it does not specify their monetary value.
However, as long as Israel is in control of the border crossings and places many limitations defined as security restrictions on Palestinian importers – it is no wonder that the dependence on imports from Israel or from elsewhere by means of Israeli importers remains high.
Supporters of the tactic of upgrading the Palestinians’ status at the United Nations promised that Israeli measures to take economic revenge have been taken into account and have assessed that these will be offset by financial support from Arab countries. However, in the meantime Israel is persisting, the Arab states are in no hurry and once again Fayyad is not able to pay the public sector salaries. In the face of expected strikes, protests and a comprehensive economic slowdown, Fayyad is rolling the ball to the Palestinian public and the Fatah leadership (which has related to Fayyad as a punching bag, as though he is exclusively to blame for the financial crisis that has no connection to the Israeli occupation and the policies of Fatah chairman Mahmoud Abbas).
A boycott of goods is a kind of popular, unarmed protest, which PA and Fatah spokesmen are now trying to depict as the appropriate way to fight the occupation, parallel to the diplomatic tactics. Fayyad is putting seriousness of the Fatah leadership to the test. If it does not harm the Israeli economy, governmental and popular action for a boycott of goods is liable at least to raise political awareness (as it was about two years ago, when the boycott of goods from the settlements began) and to create an atmosphere of solidarity and partnership, the lack of which is so keenly felt.
However, here lies another obstacle to the call for the boycott. About 81 percent of the Palestinian public believes that corruption is rife in the PA (as reported in a public opinion poll conducted in November by the Jerusalem Media and Communications Center). Answering the call for a boycott and other acts of self-denial on the part of the Palestinians requires their trust in their leaders at the various levels, and this trust does not exist.
Front Page Features