Political Economy of Occupation


Hasan Barghouthi is a long time Palestinian activist  in  the field of social and workers’ rights. He is well known in Palestine  for his many years of struggle as a trade unionist. He was arrested by Israeli forces and placed under house arrest for several years for organizing unions and strikes and defending the freedom of association of building and
restaurant workers. In pursuit of peace between Palestinians and Israelis and for democratic values within Palestinian society, he helped found the Democracy and Workers’ Rights Center (DWRC) in Palestine 1993.


In November 2002, Hasan was in Boston, giving lectures on the and the situation in Palestine, and was interviewed by phone.


Prior to the second intifada that started in 2000, there were still many, many Palestinians working in Israel.  How has the situation of these workers changed in the past two years?


The situation of Palestinian workers is this: there are 150,000 workers who can no longer go to their workplaces in Israel.  The vast majority of these have been denied compensation, severance pay, or any social rights.  The majority of these workers had also paid a full year’s worth of income taxes, even though they were cut off from their employment after only a few months of work.  They have not been paid back their taxes.  The majority of workers were paying into social insurance funds, which were to help them if they became unemployed-these payments have been frozen as well. 


All of these workers are now unemployed.  35% of Palestine’s GDP used to come from workers who commuted to Israel.  That 35% of the economy is now gone.  The unemployment rate in the occupied territories is now 44.6%.  The unemployment has led to a poverty rate of 66.5%.  Over 2/3 of the population is in poverty.  This is not just because of the loss of all employment within Israel, but also because Palestinians cannot reach their workplaces even within the territories, because of checkpoints, curfews, and closures.


What about government jobs in the Palestinian Authority?  The PA must have been a major source of employment, Israel’s destruction the Palestinian Authority infrastructure must also have been devastating to workers.


Part of what has happened is a growth of the informal sector, which was 5% before, and is now 23% of the economy. 


But more than that, before Oslo there were between 25,000-30,000 employees in the public sector.  Since Oslo, with the creation of the Palestinian Authority, that number increased to 125,000, in all sectors: educational, agricultural, social services, and police, about 40,000 police.  Now 50% of that public sector is unemployed, and many are simply unproductive-they are paid wages but they cannot work, because they can’t get to their workplaces or their workplaces have been destroyed. 


What is the situation of the Palestinians who live not in the Occupied Territories, but within Israel’s pre-1967 borders?


Their unemployment rate is more than 10%.  There is discrimination against them in the workplace, in terms of their rights to housing.  They are not allowed to have any support from the government to build houses or expand their housing.  The land they live on is owned by the government-even if it is registered in their name, so they cannot expand their housing on it.  The majority of these Palestinians are very concerned about their future, especially in the event of a war on Iraq.  They are afraid that Sharon will initiate their transfer.  Netanyahu made it clear that he doesn’t believe that Israel can live with 1.25 million Palestinians within its borders.  In the past two years, we have seen how the Israeli Arab Parliament members like Azmi Bishara have been treated: put on trial, harassed, threatened with death.


Some described the relationship of the Palestinian economy to the Israeli economy under Oslo as one of a colonial dependency.  Is that still the case under this more intense occupation?


It is difficult to talk of a Palestinian economy at all.  You have to remember that Palestine is even now the second largest market for Israeli production, after the United States.  Israel does not allow Palestinians to export to any other markets but it allows its companies to export into Palestnian markets, dealing with individual cities, like Ramallah, Tulkarem, Hebron.  As for Palestinian production, much of it has closed down.  Many big factories and small workshops have closed, because they can’t access any markets or because the closures and checkpoints prevent supplies from traveling.  Another problem for Palestinian consumers is that we have to pay Israeli consumer prices.  Palestinian workers, even those who worked in Israel, were never paid Israeli wages.  But now, Palestinian workers are getting paid nothing and having to pay Israeli consumer prices for goods. 


Palestine is an important market for Israel.  The Arab countries are important markets for the US, and are totally open to the US now.  What are the prospects for the ‘Arab boycott’ of goods from the US and Israel?  Has the boycott had an effect?


It is too early to measure the effect of the boycott.  In the Arab countries it is possible to mobilize millions, but it is more difficult to keep united.  The boycott has been successful in Egypt.  In Jordan it is only the Palestinian community participating.  In Lebanon it has been successful.  The Arab regimes are not supporting it though, so it is basically an initiative of the NGOs, with no support from any political parties or governments. 


There are some effects on Israel.  After 2 years of intifada, the Israeli business community is looking for a way out.  Not only have they lost their cheap Palestinian labor force, but the climate of war and uncertainty is not good for business.  The problem is that Israel is in some ways a military government.  The government doesn’t pay attention to public opinion in making decisions about strategic issues or the future.  Instead it consults the United States.  Sharon’s declared goal is to ‘finish the war of 1948′.  If this is the long-term strategic goal, it is going to be a difficult battle.


In the Gulf War of 1990/91, Palestinian workers were expelled from Kuwait and Saudi Arabia.  If the US goes to war with Iraq again, will Palestinian refugees in other Arab countries suffer?


If the US attacks Iraq, there will be serious consequences throughout the Middle East, not just for Palestinians.  For Palestinians, the main problem is that Israel will continue and expand its military policies and keep Palestinians out of work.


But to talk about US plans in the Middle East, I believe their plans go beyond overthrowing Saddam Hussein.  They have plans for changing the political geography of the area.  Jordan is a part of their plan, but the US and Israel see opposition from Syria, Lebanon, the Gulf States.  After September 11, the US discovered that its friendship with Saudi Arabia had very little effect at the grassroots level.  They learned that lesson in Iran: after decades of being close to the Shah, there was still a popular uprising that overthrew him.  The US knows the same thing could happen in Saudi Arabia. 


This means the US is closer to Israel than ever, because Israel is an ally that the US can count on.  Al-Qaeda’s members come from countries that are supposed to be very close to the US, and the US knows this.  The US is worried about Egypt, Turkey, Saudi Arabia-all of its allies except Israel.


Israel is waiting for a war, to push the Arab regimes and to finalize its own policies against the Palestinians.


Can you talk about the difficulties of trying to organize workers in conditions like these?


The unemployed are now a majority.  Organization of workers means trying to find ways people can support themselves.  It is the duty of unions to have such projects.  In the past, there has always been difficulty because the Palestinian trade unions were appointed by political factions-and there has been no election since 1982!  The unions have been politicized, and they have been used in politics rather than engaging in the social and economic activity.


With the Democracy and Worker’s Rights Center we are trying to organize thousands of workers to pressure the PA for health insurance and educational rights.  Our plan is to establish a Democratic Worker’s Bloc, a forum to involve workers in democratization and the national struggle.


That must bring you into opposition not only with Israel, but also with the Palestinian Authority and the religious right?


We face challenges from all parties, but it is time to do something.  We will pay a high price, but we have to do it.  The conflict strengthens the right wing in both socities, but we have to make contact anyway.  One of our projects is to strengthen contact with groups in Israel.


What is the situation of organized labor in Israel?  What is their position on the occupation?


For the past 5 years, Israeli unions are weaker than ever.  They have withdrawn from international organizations like the International Forum for Worker’s Education.  Partly, they have suffered from the political confrontations between Labor and Likud.  They are also suffering from the privatization and liberalization that happened under Netanyahu-the public sector, the kibbutzim, face financial crises and have dismissed many workers. The Israeli unions have responded, but they are very weak.  There have been strikes, but they have been small. 


The unions are politicized, and their interest is the protection of Israeli workers.  They used to receive union dues from Palestinian workers but would not advocate for them or organize them.  There are some exceptions, however, some Israelis who have been supportive.


Are there any grounds for optimism?


In the short and medium term I’m not optimistic.  But in the long term, with a very high price, things will change.  I believe that more and more people are realizing that the military option does not achieve the goal.  The Palestinians want statehood, independence, the Israelis want security, and they will see these can’t be had in this cycle of violence.  The US will face difficulties too, in the long term, with growing opposition in the Arab countries and all over the world, that could force it to change its policies in the Middle East. 

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