Release of the Palestinian Authority
Ministry of Economy and Trade

ISRAEL'S POLICY OF SIEGE AND CLOSURE OF
WEST BANK AND GAZA STRIP

This release is first to describe to you the manner in which Israel's policy kills peace via strangling Palestinian economy when escaping implementation of Paris Protocol. Second, it is to put you in a close position to view the slow suffocation of the Palestinian people and economy.

Israel Ceases Transfer Of Palestinian Funds

Israel as part of the paralysing policy of the Palestinian authority and people, decided to cease transfer of Palestinian funds held in the custody of Israel to its owners. Israel stopped the transfer of Palestinian VAT money, purchase tax, customs tariffs collected in proxy by the Israeli customs authorities on Israeli points of exit and entrance of goods destined to or originating from Palestinian territories. An amount of 70 million NIS as stated by the Israeli minister of finance, held in the Israeli hands, do forbid the Palestinian Authority continue its practice as a government. The creation of the Palestinian Authority, a matter in accordance with the peace agreements signed, is now to be destroyed and paralysed in accordance with Israel's policy of discrediting already signed agreements and obligations.

Palestinian Labor to Israel

The Israeli policy of closure and siege is adding to a very sensitive situation on labor. 1'he unemployment rate already growing in Palestine, Israel is worsening the situation. Even though Israel agreed to free movement of labor to Israel in Paris Protocol, such an agreement is left disrespected. There are 25291 Palestinian workers from Gaza Strip with permits to work in Israel, there are also 25251 Palestinian workers from West Bank with permits to work in Israel. Due to the closure, non of these people can leave Gaza Strip or the West Bank to get to their work destination in Israel. Therefore, the average daily estimated loss of this aspect of the closure reaches 25291 00 NIS (722600 $) for the workers of Gaza Strip, and an average estimated loss of 2525 1 00 NIS (721456 $) for the workers of the West Bank. This would sum up to an average loss of 5054200 NIS @.c. 1.444057$.

Palestinian Labor To Palestinian Cities And Villages

Not only does the Israeli closure and siege policy prevent Palestinian labor reaching their work destination in Israel, but goes further to restrict movement within Palestinian territories. Labor in Nablus (Palestinian city in West Bank) for example can not reach factories where they work in Ramallah (Another Palestinian city in West Bank). This siege extends to impede the movement of a Palestinian living in Surda, a village 1 km away from Ramallah reach his office in Ramallah. This situation adds almost 70 000 Palestinian unemployed labor to the equation.

Imports From Israel

According to Paris Protocol, free movement of goods between Israel and the Palestinian territories is agreed upon. According to the Israel's policy of closure and siege which overlooks all previous commitments of free movement constituting peace, Israeli goods do not reach Palestinian territories.

Imports through Israel From The Rest Of The World

Again according to Paris Protocol that created a semi customs union between Palestinian authorities and Israel, movement of imports from abroad through Israel should be allowed and unrestricted. Under the Israeli policy of ignoring former commitments to peace, the closure and siege block any imports from what ever country in the world reaching the Palestinian authorities.

Direct Imports From And Through Egypt And Jordan

Being restrained from importing from or through Israel, Palestinians may take into consideration importing directly through borders with Jordan or Egypt. But in actual reality, Israel's policy of closure and siege does steal such possibility from Palestinians. Israel has closed the borders to Jordan and Egypt and not only for goods but also for people.

Exports To Israel

Paris Protocol, was to create a semi customs territory with no borders where goods of both sides flow freely in each others markets. Escaping Paris Protocol, Israel created not only borders between the parties, but completely locked borders that at the moment,, and for the past six days, did not allow any Palestinian export into the Israeli market.

Exports Through Israel To The Rest Of The World

Israel, in contradiction to its signed obligations of the Peace Accord, did not allow the Palestinian port and airport to operate. Therefore, it left the Palestinians dependent on its airports and ports. Realising such dependence, Israel now, and for the past six days, has not allowed any good, to be exported through its points of exports.

Direct Exports To And Through Jordan And Egypt

If not to export to or through Israel, Palestinian exporters consider exporting through the borders with Jordan and Egypt in accordance with already made peace agreements, they will not be able to. Israel continues to close the borders with Jordan and Egypt not only for goods but for people as well.

Movement Of Goods Within Palestinian Cities

Closing all borders and shutting all possibilities of exports and imports to and from different markets, one would think that the Palestinian producer or importer has to deal with fulfilling its markets needs. That possibility under present Israeli policy is also stolen. The closure and siege not only locks Palestinian territories from that of Israel, but also locks areas of Palestinian territories from each other. In the West Bank cities are closed and put under siege by Israel from other Palestinian cities and villages within.

A brief account of the consequences and effect of Israel's policy of closure and siege on Palestinian different sectors is put forward to you;

1. Industry

Palestinian industries for the past six days have not produced. The labor does not reach the industrial plant. Israel blocking movement of goods stopped any possibility for production. The raw material does not reach the factories. If production is to take place, overcoming all above obstacles, the produce has no market. There is not a single chance for exporting. Even more, there is not a single chance to depend and fulfil national markets since they can not be reached.

2. Agriculture

A large amount of agricultural produce in the West Bank has perished because labor does not reach farms to pick produce, or because farmers are not permitted from transporting their produce to the West Bank markets, Gaza Strip markets, Israel's markets, Jordan's and Egypt's markets, and/ or the rest of the world markets. More agricultural produce in Gaza Strip is perishing with no possibility of export. The daily estimated loss of such perished produce reaches 1650000 NIS. With the continuation of such Israeli policy, the loss., is escalating daily. As for the loss in cattle meat and dairy products the daily loss due to the same above reasons is reaching 2500000 NIS.

3. Services

The Israeli siege has hit the banking sector very strongly. Inter-bank transactions like cheque clearance and money transfers are severely hampered. Banks are trying to explore other means of effecting transactions, but the Israeli army in not allowing bank mail to go even through international countries. The banks' efficiency and effectiveness are badly affected. Yesterday, Israel impeded one of the Palestinian local banks to transfer money from its account in Tel Aviv to its Gaza Strip branch. Leaving the this bank unable to pay its duties. It is worth mentioning that this amount of money was to be transferred to its branch in Gaza to pay Palestinian Authority officials' wages.

4. Food and Fuel Supplies

With the continuation of the closure and siege for the sixth day, basic food elements of flour, sugar, dairy products are becoming scarce by the day. It is clear that if this Israel] policy is to continue, there will be a severe shortage in basic food supplies. Already milk and dairy products which are mostly imported form Israel are reported in short supply. The situation is far worse in the West Bank since the Israeli army has been sealing off all main roads and country roads leading to all cities, towns and villages.

Fuel supply, whether in the West Bank or Gaza Strip is also in shortage. As the closure and siege continue, fuel is becoming more and more scarce only to lead to serious disastrous problem.

Consequences On The Economy

1'he aim and normal consequence of the Israeli closure and siege is to kill any trade possibility between West Bank, Gaza Strip and Israel, to kill any trade possibility between West Bank, Gaza Strip and the rest of the world, to kill any trade possibility between West Bank and Gaza, and even to kill any trade possibilities between Palestinian cities and villages within the West Bank. The consequences of this on the Palestinian economy in terms of figures can not be accurately determined. But to take a very conservative number of 5 million US dollars or above would reflect a minimum loss of 50% of our GNP per day. By other countries standards, this is equivalent to the United States loosing 9.7 billion dollars a day, France loosing 1.9 billion dollars a day or Israel loosing 120 million dollars a day. Consequences On The Peace Process This Israeli government policy started with violation of Paris Protocol and took advantage of the terrorists' attack to put an end to such agreement. Israel's policy of siege and closure has left Paris Protocol with all its parts whether on transfer of funds, movement of goods, movement of labor, services dead. Complete discrediting of Paris Protocol, an important body of the Oslo accord dealing with the most vital dimension of life, economy, only reflects that Israel is to escape from already signed commitments to bring last and just peace with the Palestinians.