UN: Israeli controls in Area C costing West Bank Palestinians $2.5 billion per year

Report says limits on Palestinian development in parts of the territory fully controlled by Israel go further than in rest of West Bank, keeping PA economy from potential windfalls

A Palestinian boy walks while backdropped by his home village of Susiya in Area C of the West Bank on July 24, 2015. (AP/Nasser Nasser)
A Palestinian boy walks while backdropped by his home village of Susiya in Area C of the West Bank on July 24, 2015. (AP/Nasser Nasser)

GENEVA, Switzerland — Restrictions imposed on Palestinian development in Israeli-controlled parts of the West Bank, known as Area C — in addition to other limitations existing in the entire West Bank — cost the Palestinian economy an estimated $50 billion between 2000 and 2020, the UN claimed Tuesday.

The United Nations’ development agency UNCTAD said that extra restrictions imposed within the West Bank’s so-called Area C, which remains under full Israeli control, had cost $2.5 billion per year.

That is more than 2.5 times the total Palestinian GDP in 2020, UNCTAD said in a report.

Under the 1993 Oslo Accords, the West Bank was split into three administrative divisions, with Area A controlled by the Palestinian Authority, Area B under split control and Area C — the largest section constituting about 60 percent of the territory — remaining fully under Israeli control.

Area C, which is the only contiguous section of the West Bank and contains the most fertile land and valuable natural resources, was supposed to be gradually transferred to Palestinian jurisdiction, according to the accords, but that has not happened.

Area C is today home to around 400,000 settlers, with 70% of the land off-limits for Palestinian development.

“Despite several UN Security Council and General Assembly resolutions that emphasize the illegality, under international law, of settlements and the acquisition of territory by force, they continue to grow and expand,” UNCTAD said.

At the same time, Palestinian access to the remaining 30% of Area C remains “heavily restricted,” the report said.

Palestinian laborers work at the site of a charcoal factory, in the West Bank town of Yabad, near Jenin. (AP Photo/Nasser Nasser)

A number of restrictions are imposed across the West Bank, including bans on imports of certain technologies, stringent permit requirements, tight bureaucratic controls, checkpoints and roadblocks on top of Israel’s security barrier. Jerusalem says these measures are needed to prevent Palestinian attacks on Israeli civilians and security forces.

But the report alleged that the controls imposed in Area C go over and above those in the other areas, in a bid to facilitate the expansion of settlements.

Looking at satellite data and examining night-time luminosity, it determined that economic activities in the parts of Area C that Palestinians had access to were considerably lower than in Areas A and B.

The report’s cost assessment is based on the assumption that economic activity there would otherwise have been at the same level as in Areas A and B.

UNCTAD economist Mutasim Elagraa stressed to reporters that “this assumption is conservative,” pointing out that Area C is “the richest part of the West Bank and it has the most valuable resources.”

At the same time, the report said Israel draws vast gains from the settlements in Area C and in East Jerusalem, estimating they contribute $41 billion annually to the Israeli economy.

That is 227% of the total Palestinian GDP in 2021, UNCTAD said, calling for the immediate lifting of all restrictions on Palestinian economic activity in Area C.

“Ending such restrictions would provide the Palestinian economy with a badly needed economic and natural resource base for developing their economy and reversing the current trend of deepening fiscal crisis and increasing socioeconomic deprivation,” it said.

Times of Israel staff contributed to this report.

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