Mideast conflict pushes scores of Palestinians onto poverty rolls

Mideast conflict pushes scores of Palestinians onto poverty rolls

Knight Ridder Newspapers
Date: 12-14-04

By Michael Matza

QALANDYA, West Bank _ In a ground-floor apartment where a tiny space heater barely softens the chill, Palestinian Nader Nasser, 31, doesn't need the latest economic indicators to show how intifadah violence has wrecked his working life.

For nearly 14 years, Nasser was a day laborer inside Israel, driving a bulldozer on construction sites. He earned $1,550 a month, and sometimes double that with overtime.

For a man whose schooling never went beyond the eighth grade, it was a handsome living and more than enough to support his wife and two young children, he said in a recent interview. But those days are gone.

To protect itself against a wave of Palestinian suicide bombings, Israel has severely restricted the number of Palestinians permitted to enter Israel as day laborers. Where 125,000 once entered daily from the West Bank and Gaza Strip, now fewer than 50,000 are permitted to cross. On many days, the number does not exceed a few hundred.

Israel has also severely restricted the flow of goods and merchandise through border crossings between Israel and the strip.

Nasser's story is a familiar one in this part of the world. A recent World Bank study of the Palestinian labor market, coupled with poverty figures released by Israel last month, show how the conflict has created crises in both societies.

On the Israeli side, social-service cuts and large expenditures on items related to the conflict, including increases in military spending and the $750 million separation barrier being built across the West Bank, combined to drive 2003 poverty rates to record highs.

According to the latest statistics, 1.42 million Israelis _ 22.4 percent of the country's population _ lived in poverty last year, up from 1.3 million in 2002. Poverty in Israel, as defined by the country's National Insurance Institute, is a monthly income of less than $392 for a single person.

Palestinians have also suffered mightily. Despite modest per-capita income growth spurred by a reduction in militant attacks and fewer Israeli-imposed curfews in 2003, economic activity among Palestinians remained well below its level of September 2000, before the start of the intifadah uprising. Unemployment averaged 50 percent in the West Bank last year and 68 percent in the Gaza Strip.

For a time, Nasser entered Israel clandestinely, working about five days a month. To supplement his small income, he was forced to sell his wife's gold jewelry, a step many Palestinians have taken in response to hard times.

Then one day about a year ago, Israeli border police caught Nasser entering Israel illegally. He paid a $440 fine and was told that if caught again he would pay $1,750 and spend more than two years in jail.

Through connections, he got on the payroll of the Palestinian Authority's Ministry of Public Works, where he gets $330 a month. He knows it's a make-work job that could disappear with Palestinian government policy changes, but for the moment it puts some food on his table.

"I used to be able to buy my children whatever they wanted," he said, seated in his uncle's chilly apartment near the heavily guarded Qalandya checkpoint between Ramallah and Jerusalem.

Now when he goes shopping, he leaves the children, 4 and 6, at home, because he doesn't want to disappoint them.

"Psychologically, it defeats your sense of honor," said Nithya Nagarajan, a World Bank field economist who, along with anthropologist Tanja Hohe, is studying how Palestinians are coping with economic stress.

"It used to be that a guy with a small job could support his core family. Now he's in a crisis, too, because he has to support a larger group. At the moment, things still seem to work, because of the underlying family structure," said Hohe. "But if they worsen just a little bit, you could have a huge collapse."

To prevent that, the World Bank has put together a package of initiatives, including a proposal for Israel to alter its unilateral disengagement plan to permit Palestinians from Gaza to work in Israel even after 2008.

Under the disengagement plan, which calls for the withdrawal of Jewish settlers from the Gaza Strip and four small settlements in the northern West Bank by the end of next summer, Israel would end all Palestinian day labor by 2008.

Disengagement, if coupled with an easing of import-export restrictions, might force Palestinians to shift from a service economy to one with more productive capacity, a move economists say is necessary for long-term economic health.

"Roughly three-quarters of Palestinian imports come from Israel or through Israel. Virtually 95 percent of Palestinian exports are to or through Israel," said World Bank senior economist John Wetter. "That was an OK strategy so long as the flow of labor to Israel and the amount of goods to and from Israel continued. Once that was cut, the fallacy of that approach became painfully obvious."

One possibility for reviving Palestinian agricultural and textile exports to Israel, said Wetter, would be a high-security rail link from the Gaza Strip to Israel's Ashdod port, so that prescreened goods can go directly from the strip to the port inside sealed containers.

Peace, of course, would pay the biggest dividends to both economies. But since peace is not around the corner, what's the interim strategy?

"You can pursue a marginalist to gradualist approach, a little something on the edges," said Wetter, "and try to keep focused on the big picture, the big costs, and hope that at some point enough people on all sides will say, `The cost is killing us. It's killing us in human terms. And it's killing us in economic terms.' "

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