PA Industrial Zones: Cementing Statehood or Occupation?

Al-Shabaka Commentary

The Palestinian Authority (PA) began to establish export-oriented industrial zones when it was created some two decades ago, partly in response to donor recommendations and partly in line with the neoliberal policies it was introducing. Thus, Palestinians have been hearing for years about Turkish-German, Japanese and French industrial parks in Jenin, Jericho and Bethlehem, respectively, but, tellingly, they have rarely heard these described as Palestinian.

The debate about the zones, also known as parks, is polarized. The PA, its international sponsors, and the PA-dependent private sector see the industrial zones as a pillar of the state-building effort that will bolster the Palestinian economy and achieve sustainable development.

The zones’ critics argue that they reinforce and legitimize the occupation by making the Palestinians even more subservient to Israel given that the PA has to rely on the occupiers’ good will for access, movement and for transfer of tax revenues. In addition, the zones give Israeli companies a legal way to penetrate the Palestinian economy.

Moreover, the zones distort the Palestinian economy by ignoring its natural advantages, such as tourism and its related industries, as Sam Bahour describes in a compelling piece. They also override the imperative of resisting the occupation to win self-determination, freedom, justice, and equality. This imperative requires an entirely different kind of economic policy, one that is less vulnerable to Israeli control by being based on small-scale agriculture and industry targeted primarily at the local market and by fostering economic steadfastness rather than export-led growth. Al-Shabaka has argued for this approach in pieces on farming, growth, the resistance economy, and alternative approaches to aid, among others.

The Jericho Agro-Industrial Park (JAIP) initiated in 2006 and supported by the Japanese International Cooperation Agency (JICA) to the tune of $47.7 million is a stark illustration of the problems with industrial zones. A full discussion of the issues is set out in a study published by the Bisan Center for Research and Development in September 2012, as well as in a position paper by this author published by Bisan in December 2012. This commentary, which draws on the fuller study, takes forward two themes, the lack of public accountability and the role of donor-driven aid.

The Palestinian Industrial Estate and Free Zone Authority (PIEFZA) sets out the official purpose of the JAIP project. It is to “enhance the philosophy of steadfastness and defiance” based on a simple economic philosophy of attracting foreign investment, exporting manufactured products, creating local job opportunities, and improving the GDP.1

However, these official claims paper over several issues that cry out for public accountability. For example, there are major problems with the feasibility studies which have been criticized by many sources, including PIEFZA project managers, and which include inaccurate and exaggerated numbers and no clear and transparent financial reports or budgets.2

According to the official view, JAIP differs from other Oslo-designed projects because it is located deep inside Palestinian land rather than on the border with Israel, as was the case, for example, with the now defunct Erez Industrial Zone. But this is naive, to say the least. How can one refer to something as being deep inside Palestinian territory when Israel controls Palestinian borders and is, furthermore, rapidly colonizing the Jordan Valley?

Much more problematically, a report by Stop the Wall quoted a preliminary JICA document that appeared to propose providing direct support to and benefiting from the Israeli settlements in the Jordan Valley – euphemistically described as “Israeli migrant firms” – despite the flagrant illegality of Israel’s settlement enterprise. The JICA project did not even comply with the Oslo Accords, Paris Protocol, and Agreement on Movement and Access – bad as these agreements were for the Palestinian people – according to the Negotiations Support Unit advising the Palestine Liberation Organization, which opposed the project, according to the Palestine Papers.

The Guardian describes the Japanese purpose in launching their "corridor for peace and prosperity" in the Jordan Valley as to encourage cooperation between Israel, the PA, and Jordan.