EU should stop Israel’s preferential access to European market, says economic expert

Mansoob Murshed, first holder of the prestigious Prince Claus Chair in Development and Equity, Utrecht University 2003


Professor Mansoob Murshed is a renowned economist who supports the Palestinian call for an academic boycott. He gained international fame with his research into conflicts. In his latest book, Explaining Civil War, a rational choice approach, he discusses Palestine. Murshed worked for many years for the UN University in Finland and teaches at the Institute of Social Studies of the Dutch Erasmus University, and at the British Coventry University. I spoke with Murshed about Israel’s state terrorism, European support to the Palestinian economy and BDS activism

Adri Nieuwhof: How did you become interested in Palestine?

Mansoob Murshed: My interest arose specifically on the economy. It occurred when I was working at UN University in Finland. We were running a project on why some countries are going to civil war and others not. One of the case studies we chose was the Occupied Palestinian Territory (OPT). It was ten years ago, a time when everything was literally been trashed [by Israel], in particular in the West Bank.

AN: European countries have invested in the development of the OPT, arguing that economic development will contribute to peace. This has not happened. Why? What are the main obstacles?

MM: The OPT has been systematically underdeveloped because of the lack of policies or the wrong policies. The two are related to what Israel does. There is an issue of wrong policy. After the Oslo Accords, the PLO signed the Paris Agreement which said that customs excise, commercial policy, trade policy for the OPT was going to be controlled by Israel. So you see that the OPT can not export anything [without Israel’s permission]. And you have the problem that taxes are collected by the Israeli authorities, who deduct huge amounts. Even the assistance to the OPT from the European Union and European countries is channeled via Israel. And a lot of it is deducted and may not reach it.

Then you have the blockade which means that the OPT can not only export because of the wrong policies, but also because of the blockade. It is not just the wall, but the fact that they [Palestinians] are not allowed to export. The wall and other aspects of the blockade have the usual typical outcome of rising prices. You could expect that the cost of buying goods is similar in the West Bank to Israel proper. But prices are considerably higher in the West Bank because there are all kind of regulations about delivery of goods, plus the blockade, plus you have walls who have caged or surrounded communities. The movement of goods and people has been strangulated ever since the second intifada. The ability of the people in the West Bank to work in the Israeli economy has been eliminated. So there is a loss of income.

Then there is of course the trashing of infrastructure. The Israeli economist Shir Hever argued that in 2002 around 40 percent of the national income of the OPT, particularly the West Bank, was lost. That is a lot. For example, during the second World War, Germany lost 33 percent. The worst thing is that we in Europe are trying to assist the OPT to build up infrastructure, build up sustainable development, and it is totally trashed by Israel.

Finally, there is a political economy problem that is state formation in the OPT which is being thwarted by factions. If you belong to Fattah or Hamas, and you are a public servant, you get your salary paid even when you do not work. It [receiving benefits] depends on whom you are affiliated with. The modern state gives some benefits or public goods to all citizens. For example, we give primary education to everyone no matter the political orientation. One of the causes of civil war in Africa is that if you belong to a particular identity, you do not get the benefits. It is been shown [in the OPT], that unless you have the correct political connection, you are not going to get the benefits of the state. So the state is a complete failure. It is down to factions, it is like medieval Europe. You get something from the feudal lord who’s territory you are in and you obey. This is the worst obstacle to sustainable development.

And there is corruption, like everywhere in the world, but in different degrees. Here the corruption depends on your political affiliation, whom you support. So divisions within the Palestinian people in the OPT are also a huge obstacle. It is a characteristic of failed states.

Otherwise, the human development indicators such as education are very good in the OPT.

AN: You spoke recently in a lecture about Israel’s “state terrorism.” Can you elaborate on this?

MM: When the apparatus of the state is using systematic violence against certain population groups there are terms for in political science. Even in Israel proper, there are huge differences. The Arab population are second class citizens. That is the apartheid side. The terrorism side is activities like assassinations, invasions, destruction of infrastructure. And the state uses its apparatus to target its political opponents. That is when we say there is state terrorism.

One factor is also that you cannot occupy and then blockade. If you occupy someone, you are responsible for him. The OPT is the only instance I can think of that occupation and blockade go together.

Another aspect is the stealing or transfer of resources. Mainly water from the West Bank. It’s been diverted, partially for the settlers, but also otherwise because water is a scarce resource in the region. Water is the main issue that creates international disputes.

Plus that a lot of the revenues, of the aid to the OPT is taxed. It is withheld. There are huge service charges. This is what colonial governments used to do, extract service and administrative charges. So [in the OPT] it is an occupation, plus a blockade, plus a colonial extraction of resources.

AN: Do you think that boycott, divestment and sanctions (BDS) activism against Israel until it respects rights of the Palestinians and complies with international law can contribute to change?

MM: I have to use the experience of South Africa. Multinational companies eventually became more and more embarrassed about operations. The other aspect was its lifeline to the West was cut in terms of cultural exchanges, which means sport, rugby and cricket. That did have an impact.

I think BDS can assist, mostly in cultural and academic spheres. That kind of boycott can have some positive effect at least by not allowing whitewashing of policies which have been pursued. As far as companies are concerned, they can be embarrassed and that will draw the attention of shareholders. It can have an impact and makes things more difficult. The Israeli economy is already suffering from boycott. Multinationals will think twice.

And I think the European Union’s preferential trade agreement needs to be modified. There are legal, humanitarian and political reasons to stop the preferential access that Israel has to the European market.

That will hurt if that is stopped.


Adri Nieuwhof

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Adri Nieuwhof is a human rights advocate based in the Netherlands and former anti-apartheid activist at the Holland Committee on Southern Africa. Twitter: @steketeh