Israeli Occupation is Profitable, It Should be Less So

Date published: 6th August 2009

Original source: Haoketz (translated to English by the Alternative Information Center, AIC).


A poster calling for a boycott, divestment and sanction campaign against Israel for its policies.

A poster calling for a boycott, divestment and sanction campaign against Israel for its policies.

The associations that come into the minds of most of us when hearing the common phrase “Israeli occupation” are generally tied to concepts such as army, settlers, terror and peace process. Few pay attention to the economic aspects of this ongoing project and generally when people do mention this, it’s in the context of the occupation being an economic burden on Israel. Fewer still ask who is profiting from the occupation, to which social groups do these profiteers belong and what political power do they possess. The idea is simple. Damage to these profits is liable to transform a continuation of the occupation into something less profitable. Such a discussion is relevant today in light of the increasingly powerful global campaign of economic actions against the occupation, or BDS—boycott, divestment and sanctions.

According to an estimate of Shir Hever of the Alternative Information Center, in 2008 Israel spent NIS 26.3 million on the occupation (including expenditures on defense, subsidies for settlements, etc.). Since the beginning of the 1967 occupation to 2008, the expenditures are NIS 381 billion. Shlomo Swirski from the Adva Center wrote a book about this, The Price of Arrogance. In his 2008 report on the price of the conflict, he emphasizes that the occupation reduces economic growth, destabilizes, and is a burden on the budget. According to Swirski, almost all economic areas are impaired by the occupation: tourism, credit rating, investments and welfare payments which are cut as a result of the investment in the security industry and settlements.

A few examples of profits:

  • The employment of cheap Palestinian workers and its impact on the general deterioration in Israel’s working conditions. Today the employment of cheap Palestinian laborers in Israel is reduced as a result of the political and economic transition to the exploitation of migrant workers, but in the industrial zones of the “buffer area” exist Israeli-owned factories which employ Palestinian workers in harsh conditions of exploitation. Many Palestinians also work in settlements (a project of Kav Laoved tracks their conditions of employment and assists them to organize);
  • The construction of settlements on cheap land in the West Bank instead of on more expensive land within the Green Line and the pushing of weakened populations into these settlements. For example, the cities of Modiin Ilit and Beitar Ilit were built beyond the Green Line for ultra-orthodox Jewish populations, immigrants from the Commonwealth of Independent States (CIS) are encouraged into the area of Ariel, and there is construction for young couples in East Jerusalem.
  • Palestinian society represents a captured market for Israeli goods. As they have no alternatives, and because of the Israeli control over the borders and the internal blockades, the Palestinians are forced to consume the goods of Israeli companies. Israel further prevented throughout the years the development of Palestinian factories that could have represented competition for the Israeli market.
  • The military-industrial complex: According to Naomi Klein in her excellent book, The Shock Doctrine, after the burst of the high tech bubble at the end of the 1990s, Israel increasingly moved into the niche of security high tech. This was particularly true following September 11, when the world demand for security increased. The occupation is an expansive testing ground that permits government investments in means which are afterwards sold throughout the world. There are companies that brag about testing their equipment on Palestinians.

According to Dan Babli, 200,000 people are employed in Israel in security services and another 100,000 are employed in the import and export of security services. Together they represent some 10% of Israel’s active work force. According to statistics cited by Yossi Melman in Haaretz, in 2008, Israel spent more on security per capita than any other country in the world. According to this research, last year every citizen in Israel financed $2,300 for security expenses in his country. In comparison, in the United States the security expenses are about $2,000 per capita. In Saudi Arabia, which acquires some of the most sophisticated weapons systems in the world, the amount per capita is $1,500. It is difficult to imagine that in a situation of regional peace, these businesses will continue to flourish.

It is on this background that in July 2005, some 170 Palestinian civil society organizations signed a declaration calling for boycott, divestments and sanctions against Israel “until it complies with international law and universal principles of human rights.” This campaign is called BDS.

Since 2005, the international BDS campaign against Israel has accelerated. Israel’s attack on Gaza provided it with another push, and recently it is beginning to be felt. A few examples:

  • Veolia, a French company that works around the world, is partner through its daughter company Connex in building the light rail in Jerusalem, a railway that will also pass through territories occupied in 1967 that were annexed by Israel and on which Jewish neighborhoods were built. Connex also runs a garbage dump in one of the settlements and several bus lines to settlements. The company became a target for the BDS campaign under the slogan “Derail Veolia.” As a result of this campaign, Veolia lost approximately US $4.5 billion after it did not win the tender for running the subway in Stockholm (after 10 years in which it did run the train). In additional cities throughout the world there were actions against the renewal of contracts with Veolia. In June this year, it was reported in the media that the company is interested in selling its part in the building and running of the light rail in Jerusalem.
  • Following a public campaign in Belgium, Bank Deksia announced that its Israeli branch, “Deksia Israel,” will cease to provide loans to settlements. In 2001 Deskia Bank purchased Bank Otsar Hashilton Hamakomi in Israel and provided, amongst other things, long-term loans to settlements.
  • In the wake of a report published by three Swedish organizations in October 2008, Assa Abloy, the huge Swedish company, announced the closing of its “Multilock” factory in the Barkan Industrial Zone, near Ariel. The company announced that it would transfer the factory to another place, within the Green Line.
  • In these very days the Norwegian public pension fund, one of the largest in Europe, is examining its investments in companies involved in the Israeli occupation.

A large amount of information about the profits of the occupation is centred in a project of the Coalition of Women for Peace called Who Profits. The project began in 2007 and in its website one can find a list of Israeli and foreign companies directly connected to the occupation. The project does not call for boycott or any other specific action against the companies on the list. The Coalition of Women for Peace to date has also not joined the list of organizations supporting BDS. However, the data base is an important tool for understanding the economic interests in the occupation. Through it, it is possible to understand how difficult it is to separate between the Israeli economy within the Green Line and the economy of the occupation: agricultural produce from the settlements are mixed and marketed together with produce from within the Green Line, what to mention that most of the banks, cellular phone companies and transportation companies operate on both sides of the Green Line. Alongside the Who Profits project works an Israeli group called “Herem” (boycott in Hebrew) which explicitly supports the Palestinian call for BDS and the various campaigns and attempts to increase awareness of actions of these types amongst residents of Israel.

The question is whether the BDS campaign is effective and if it is moral. What messages and actions can be supported and what not. These are questions that those who oppose the occupation should be asking. I and other activists in Israel and the world reached the conclusion that so many tactics of opposition to the occupation were tried, and the occupation is still here and is becoming increasingly cruel from year to year. I believe that countries and people generally act according to interests, such that the way to end the occupation is to render it unprofitable.

The rendering of economic investments tied to the Israeli occupation as unattractive because they are accompanied by losses to companies, will slowly crumble the ability of the occupation to become a generator of economic development and profits. Eventually the occupation will become a burden, as occurred in South Africa, where it was the business people who asked the apartheid government to stop its racist policies.

This is not an easy task, but it appears that the BDS campaign is beginning to trickle down. It is important to remember that this campaign is non-violent, uses a variety of tactics in accordance with the local contexts of the actions, and allows citizens from throughout the world to participate in a struggle against the occupation and not to leave this solely in the hands of the governments and politicians (for more about the principled aspects of the BDS campaign against Israel, please see the aforementioned research by Shir Hever).

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