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West Bank and Gaza (WBG) is a small, resource poor economy. Consequently, its growth depends on maintaining open trade with its neighbors. Trade flows are nearly 85% of GDP with the vast majority - probably around 90% - with Israel.1 However, because of the deteriorating security situation, the Government of Israel (GOI) has increasingly imposed restrictions and closures that impede trade. In addition, changes in the Israeli economy have reduced the market for traditional Palestinian products.2 Though the Israeli economy will remain WBG’s main trading partner for some time to come, future growth will depend upon Palestinian enterprises being able to reach beyond Israel and access new markets in the rest of the world.
In a previous paper, the World Bank analyzed the logistics of trade corridors from Gaza through Egypt as an alternative to sending exports via Israel. This paper extends this work and examines the viability of different trade routes from the West Bank. Another earlier paper describes the complex agglomeration of physical obstacles, administrative barriers and permit policies that Israel uses to restrict movement in the West Bank. This paper also builds on this work by quantifying some of the resulting costs. West Bank enterprises have essentially two options to access the world market: (a) out through Israeli ports or airport; and (b) across the Jordan River and out through Jordan ports or airport. While, it is also possible to send goods across Israel and through Egypt, this route is currently uneconomical.
To access the wider world market, Palestinian enterprises must first face the challenge of moving within the West Bank itself. The numerous Israeli road blocks, closed areas, restricted roads and growing settlements have cut the Palestinian communities into isolated cantons, which raise transportation costs and significantly limits the ability of Palestinian enterprises to achieve economies of scale.3 To develop a better understanding of how the current level of internal restrictions affect transportation costs, the World Bank commissioned the Palestine Trade Center (PalTrade) to conduct two rounds of surveys of companies engaged in transport between June and September 2007. The surveys targeted transport companies or enterprises actively engaged in the transport of their own goods.
To download the full report please click below:
| Attachment | Size |
|---|---|
| PalTradeWBRoutesDec08.pdf [2] | 436.02 KB |
Links:
[1] http://www.americantaskforce.org/resources
[2] http://www.americantaskforce.org/sites/default/files/PalTradeWBRoutesDec08.pdf
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