Fri Mar 14 09:08:13 PDT 2008
aim to crack the long-standing boycott of Israel maintained by the majority of
countries in the Middle East. These bilateral trade accords include a condition
for countries to recognize Israel.
Apartheid economics is critical to US and Israeli policy in the region,
implemented through neo-liberal bilateral trade accords, or on the ground in
Palestine where Israel is pushing a plan to build industrial processing zones.
Proposed industrial zones will see Israeli corporations' factories operating
with a Palestinian labor force, similar to maquiladoras, Mexican factories
which became notorious for human and labor rights abuses in the 1990s.
At the recent US-sponsored summit in Annapolis, joint Israeli-Palestinian
industrial zone projects were designated as an object of future collaboration
and a peace-building initiative between Israel and the Palestinian Authority
(PA). Major industrial zones backed by the World Bank and European Union are
slated to be constructed in the occupied West Bank.
The proposed industrial projects will see thousands of Palestinians working at
Israeli-operated factories in closed military zones where labor laws don't
apply. A grassroots movement against these industrial zones is spreading
throughout Palestinian society as part of the international boycott, divestment
and sanctions campaign. Israel's occupation of Palestine and the construction
of the apartheid wall is a huge burden on the Israeli economy; these industrial
processing zones are being promoted as economic engines for Israel.
The Grassroots Palestinian Anti-Apartheid Wall Campaign is organizing against
the establishment of these industrial processing zones. Campaigner Daoud
Hamoudi spoke with The Electronic Intifada contributor Stefan Christoff on the
issue of US-driven free trade agreements in the Middle East and the economics
of apartheid in Palestine.
Stefan Christoff: Can you first speak about the impact on the Palestinian
economy of the apartheid wall being constructed in the West Bank, and can you
describe the current status of the wall's construction?
Daoud Hamoudi: In 2002 the Israeli government started building a wall in the
occupied West Bank. It's a 700-kilometer-long wall that Israel claims is a
security wall to separate the Palestinians from Israel. However, the path of
the wall splits Palestinian lands, creating small ghettos, closed ghettos with
a limited number of exit and entry points that are controlled by Israeli
military checkpoints. Israel's wall has had many severe impacts on
Palestinians, including major economic impacts.
Each kilometer of Israel's wall costs an estimated $2.5 million at minimum,
while there is a great deal of infrastructure, high-tech military equipment
that additionally lines the wall, costing an estimated $400 million. It has
been very, very expensive for Israel to build this wall.
After completion, the wall will include an estimated 35 checkpoints that will
cost additional millions. Given this economic reality, Israel launched a
parallel economic plan to coincide with the wall's construction, a plan to
control the Palestinian economy in order to fund the wall's construction.
Israel's parallel economic plan started in 2005, approved by both the US
government and the EU; now Israel is attempting to force this economic plan on
Stefan Christoff: I understand you are documenting an economic plan put forward
by Israel, to compensate for hundreds-of-millions of dollars through siphoning
money from the Palestinian economy. Can you explain in specifics how this is
Daoud Hamoudi: For example, there was a proposal from the World Bank in 2005,
to build between nine and twelve industrial zones throughout the West Bank.
Each Palestinian ghetto will have two or three industrial zones to which
Israeli factories will be moved. Palestinians will become the cheap labor force
for Israeli industry. Also, these industrial zones will be built along the
border, so they will not be part of Israel or Palestine and the labor force
will not be officially working in either Israel or Palestine.
Palestinians will be forced to work in areas where Palestinian [and] Israeli
labor laws don't apply. In this context, if a Palestinian worker has a problem
with an Israeli factory owner, the worker can't use the Israeli court system or
Palestinian regulation to address the labor issue.
Also within this proposal, the announced salary for the Palestinian workers
within the industrial zones will be $300 US a month, a fraction of the minimum
allowed for Israeli workers inside Israel. For the first time, Israeli industry
or factory owners are openly talking about competing with Asian productions
within European and North American markets.
Another example is a project funded by the Japanese government, an
agro-industrial zone, built on Palestinian land in the West Bank that today has
become a closed Israeli military zone, in which the agro-industrial areas will
be launched, based on the same conditions for Palestinian workers proposed in
the industrial zones.
Stefan Christoff: Can you expand on the examples that you put forward, both the
agro-industrial zone and the industrial zone project in the West Bank? Could
you expand on the economic implications for the Palestinian people and
Daoud Hamoudi: To build any state you need to have an independent economy,
which in turn fuels national development. Today, if the West Bank became free
from the Israeli economy, this break would have a major negative impact on the
Israeli economy, as the Palestinian territories are the second largest market
for Israel after the US. For example, Israeli gas companies generate around 40
percent of their income from the West Bank and Gaza markets alone.
Today, Israel is attempting to impose conditions on any future Palestinian
state, [over] which Israel will continue to control economic trade, [the]
national economy, the borders, all to secure economic benefits for Israel from
any future Palestinian state.
A group of economic agreements ... under negotiation since 2005 include the
establishment of the industrial zones. [The] issue behind this project is the
fact that, internationally speaking, Israel's labor force maintains extremely
high standards in relation to international wage standards.
Israel can't compete with industrial production costs in South Asia, Latin
America or China, including clothing, food and other production. Israel is
attempting to build the national economy through these industrial zones,
through moving Israeli factories into these areas, then bringing in cheap
Palestinian labor to work in slavery-like conditions at the lowest wages
possible, in order to allow Israeli industry to compete in the world market.
Now these economic projects are promoted as "peace-building" projects
internationally. These industrial zones will be placed along the border, so
they will not be considered either Israeli or Palestinian. However, the
companies operating within the zones will be Israeli companies or
multi-national corporations, like Turkish or US-based companies.
Israelis will own the factories [and] also will supervise the Palestinian
workers. Israel will additionally control the export of products created within
the industrial zones. Estimates project that there will be 40,000 Palestinian
workers within the industrial zones.
Already land has been confiscated in different Palestinian districts in the
West Bank to build these industrial zones, which will be funded initially by
different governments internationally. To explain, one in the north will be
funded by the German government, one in the northwest of the West Bank will be
funded by [the US development agency] USAID, one in the south will include
infrastructure funded by the World Bank and Turkish government and finally one
in the eastern West Bank will be funded by the Japanese and US governments.
Supporters of this industrial zone project hope that eventually half-a-million
Palestinian workers will be working in these industrial areas. Again it's
important to remember that the Palestinian workers will not be working in
either Israel or a potential Palestinian state, so no labor laws can be
implemented on these industrial or agro-industrial zones.
Israelis will maintain control [over] the exports over these industrial zones,
as all the supervisors will be Israeli, so Israel will have total economic
control over the zones.
Stefan Christoff: Based on your reading of the proposal to establish these
industrial zones, can you describe the potential conditions for thousands of
Palestinian workers who would fill this labor vacuum for the industrial zones
that you have described?
Daoud Hamoudi: First, it's important to recognize that to enter these
industrial zones you will need a permit from Israeli authorities; if at any
point in your history you were considered an activist against the Israeli
occupation of the West Bank and Gaza, you will never receive the permit to
enter and work at the factories in the industrial zones. So these industrial
areas will remain under strict Israeli control.
Now looking at Gaza, the area has been a ghetto since 1994, as a wall has been
surrounding Gaza since that time. Already two industrial zones have been built
where thousands of Palestinians worked. As the intifada started in 2000, Israel
simply started closing the entrance to the factories, collectively punishing
Palestinian workers. Finally in 2004 Israel closed the industrial zones in
Also it's important to note that the Israeli permits to enter the zones are
considered tourist visas, not working visas. Now if a Palestinian worker wanted
to travel to work in Canada, for example, I would need a work visa not a
tourist visa. In Canada, if I worked while on a tourist visa I would be
considered an illegal worker -- in the legal sense, a worker without any
Now within these industrial zones, they are on the border areas, so under
Israeli law a Palestinian working on a tourist visa within the zones would be
considered an illegal worker. So in these conditions, the Palestinian workers
are unable to create a union. If a conflict or dispute happens ... between the
Palestinian workers and the Israeli factory owners, the Palestinian workers
would have no recourse within either the Palestinian or Israeli legal system.
No labor rights would exist, no health insurance for workers. If a Palestinian
worker becomes sick, or is injured within one of these factories, the
Palestinian would simply be thrown out of the industrial zone without
compensation or anything.
At this time, these industrial zones are being promoted as peace-building
projects, which Israel argues the international community should support. Each
industrial or agro-industrial zone will be funded by international governments
or international funding agencies, such as USAID.
In promoting these industrial zones as peace-building projects, Israel is
attempting to ensure support from the European Union and other states around
the world. Through the free-trade agreements that Israeli maintains
internationally with different countries in Europe [and] Canada, a market
exists for the goods that would be produced within these industrial zones by
Stefan Christoff: Can you talk about the role of the Palestinian Authority in
the creation of these industrial zones? What has been the position of the PA?
Daoud Hamoudi: [When] the Oslo Agreement was signed and the Paris Protocol, an
economic agreement that was signed between the Israelis and the PA, Palestinian
politicians thought that they could really benefit from these projects. So
throughout the early 1990s the PA promoted such projects internationally,
including the two industrial zones that were built around Gaza. In the West
Bank, no industrial projects were built during the Oslo period in the end.
Once the intifada started and the PA was persuaded [by] the grassroots
[organizations] ... that Israel was offering the Palestinians nothing, most of
these industrial projects were stopped, while a movement against economic
cooperation with Israeli spread throughout the Palestinian territories, even up
to the highest levels of the PA. This movement against economic cooperation
with Israel also promoted the idea of developing economic alternatives to
cooperation with Israel for the Palestinians.
This movement continues. In 2004 Israelis began seeking independent economic
partners within Palestinian society, attempting to negotiate direct agreements
with different Palestinian businesspeople. Israel targeted the most important
50 Palestinian businesspeople, attempting to persuade these Palestinians to
co-launch these industrial zones directly with Israel and without the approval
of the Palestinian Authority. [The] first step was an Israeli military order to
confiscate the land from Palestine for the industrial zones, then Israel
surrounded this territory by the wall and also by checkpoints, then they
pressured Palestinians to buy these confiscated lands.
The Palestinian Authority managed to block this project in cooperation with
grassroots organizations and civil society organizations, including ours, which
was active in this effort. Palestinians managed to block the project [for
Israelis] to sign direct deals with Palestinian businesspeople.
In 2005 the World Bank managed to re-open debate on the industrial project,
presenting through research the zones as the only solution for the Palestinian
economy. Since this time Israel and the World Bank managed to collect funding
for these projects, mainly from the IMF [International Monetary Fund], USAID,
the US government, the Japan International Cooperation Agency, the Turkish
government and the German government.
At the recent summit in Annapolis in the US, these industrial zone projects
were jointly approved by the PA and Israeli officials, at which time they
announced that they will attempt to finalize these projects by the end of 2008.
Now in Palestine, through civil society networks, we are trying to raise the
level of pressure on the PA to stop all Palestinian cooperation in these
industrial zone projects, for the PA to cancel the approval they made at
Stefan Christoff: Can you speak about the grassroots reaction to the PA
agreement to participate in the establishment of industrial zones in
collaboration with Israel? On a grassroots level, what are people in Palestine
saying about these projects?
Daoud Hamoudi: [The] launching of a grassroots campaign took different
dimensions; a key dimension is rooted in our appeal for boycott, divestment and
sanctions against Israel, which is led by different organizations world-wide.
Also, there have been many meetings between activists in Palestine and
different officials within the PA. Also, we are pushing to include an
anti-Israel-cooperation position within the mandate for Palestinian trade
unions for the upcoming five years.
At this point many politicians in Palestine have been persuaded to work against
the creation of these industrial zones within the framework of the PA. Also at
[the] grassroots level, we have been organizing demonstrations and events next
to the locations for the industrial zones and outside of PA buildings in the
West Bank, led by the people with land confiscated by Israel in order to begin
establishing these industrial zones. Many efforts are taking place to stop
these industrial zone projects.
Stefan Christoff: Let's talk about the way that economics is used throughout
the Middle East to push normalization with Israel. Clearly, the issue of
economic and political normalization with Israel is contested throughout the
region. Currently a number of trade agreements are being negotiated between the
US and different countries in the Middle East, agreements that include points
of economic normalization with Israel, an issue that gained a great deal of
attention from Jordan to Bahrain. Can you talk about the regional context?
Daoud Hamoudi: An important point concerning recent history on this issue was a
presentation made by US President [George W.] Bush at a conference at Columbia
University in which Bush stated that the US's goal was to have a free trade
agreement between the Middle East and the US. Also within this address, Bush
stated that the agreement would be about establishing US political control
within the Middle East, linking the trade agreements to the US war on terror.
Also Bush stated clearly that this trade strategy involved bring[ing] Israel
into the Middle East as a fully recognized country, as a Jewish country living
next to its neighbors in peace. So trade agreements were presented as the path
for the US push for normalization with Israel. In this same period, Robert
Zoellick traveled to the Middle East in [his] capacity [as] US Trade
Representative. In a talk, Zoellick stated clearly that the goal for this
agreement was to have Israel recognized in the region, as part of the effort to
combat the Arab boycott of Israel.
As the US started negotiating these agreements, the first countries that they
targeted were the smallest or weakest countries in the Middle East. In an
attempt to create an opening in the Arab boycott against Israel, the US
targeted Jordan, Bahrain [and] Morocco.
At the same time, US Congress representatives announced that the US would
peruse a free trade agreement with Saudi Arabia only if the monarchy officially
recognized Israel. In signing these agreements, for example with Jordan, the US
now allows exports in to the US without taxes if the product included a minimum
of ten percent Israeli material.
Stefan Christoff: Can you discuss the current situation in Palestine in terms
of the economic context of Israel's occupation?
Daoud Hamoudi: If you look back to history, it's clear that many colonial
projects were started for economic reasons and came to an end when the price of
occupation became higher than the profits gained from the occupation or
colonization project. For example, in Algeria, the French greatly benefited
from Algerian agricultural production, especially grapes which were used in the
French wine production.
British colonization in India was greatly connected to the spice trade and to
cotton production. Also, British colonization in Egypt was connected to cotton
production. Each example of colonization in history was connected to economics,
ending when the human and financial price became higher than the profit the
colonizers could gain by continuing colonial policies.
Today, Israel's occupation controls all of Palestine's resources, [including]
water resources [and] tourist resources, as Jerusalem and the West Bank are
rich in Muslim, Jewish and Christian tourist sites. At the time that Israel's
occupation began, a central goal was to control the economic resources of
Palestine. However, today the price of this occupation is becoming higher and
In examining the current economic situation facing Israel today it's clear that
the occupation will collapse unless Israel creates new ways to benefit from the
occupation. In the face of this crisis arrives the industrial zone projects or
the free trade agreements as a solution.
Robert Zoellick, the US Trade Representative, explained it best at the Doha
meetings of the World Trade Organization in 2001, [by] saying that the US is
pushing free trade agreements throughout the global south in order to force the
US political agenda, which translates in the Middle East to accepting Israel's
occupation or accepting the US occupation of Iraq.
People throughout the Middle East are attempting to build a movement against
the economic side of the war. However, unfortunately, the majority of the
people in the region live under dictatorships, which makes it extremely
difficult to create the space to build a movement against these economic
Major demonstrations against these US-driven trade agreements have taken place.
However, these demonstrations face serious repression. Many social activists
who have been involved in fighting US trade policies have been arrested,
detained or interrogated. Despite this, our movement continues: a movement
against US trade policies throughout the Middle East.
* Stefan Christoff is a member of Tadamon! Montreal and frequent contributor to
the Electronic Intifada. This interview was originally produced for the
Fighting FTAs project, an international project that provides a global picture
on free trade agreements (FTAs), and insight into struggles being waged by
social movements fighting back.
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