The Economic Costs of the Israeli Occupation for the Palestinian People: The cost of restrictions in Area C viewed from above

Throughout the West Bank, the occupying Power deploys a system of administrative and physical impediments that control the movements of the Palestinian people and limit their access to their productive resources.

The resulting multilayered control system includes the division of the West Bank into different administrative areas, the application of a stringent permit regime, bureaucratic controls and hundreds of permanent and flying checkpoints, gates, earth mounds, roadblocks and trenches, in addition to the wall and settlements. The system has turned the West Bank into an archipelago of scattered, disconnected islands.

Elements of the complex matrix of control put in place reinforce one another and underpin a de facto annexation of large swaths of the West Bank by the occupying Power.

The control mechanism divides Areas A and B into 166 islands, with boundaries drawn so as to incorporate all Israeli settlements. Further, Area C, which accounts for about 60 per cent of the area of the West Bank, incorporates Israeli settlements and is fully under civil and security control by Israel, although it contains the most valuable natural resources in the West Bank.

This study estimates the economic cost of the additional restrictions on Palestinian economic activity in the remainder of Area C of the West Bank, that is, the 30 per cent of Area C available for Palestinian development.

The annual cost of these restrictions is estimated at 25.3 per cent of West Bank gross domestic product (GDP) and the cumulative GDP loss in 2000–2020 is estimated at $50 billion ($45 billion in constant 2015 dollars), which is about three times the West Bank GDP and over 2.5 times the Palestinian GDP in 2020.

The cost is estimated based on an innovative, well-established methodology that uses night-time luminosity (NTL) captured by satellite sensors over a span of time.

Further, the contribution to the economy of Israel of settlements in Area C and occupied East Jerusalem is estimated at an average of $30 billion per year (constant 2015 dollars).

In other words, the cumulative contribution of settlements to the economy of Israel in 2000–2020 is estimated at $628 billion (constant 2015 dollars), or 2.7 times the annual Palestinian GDP in the same period.

Full Palestinian access to all of Area C is a sine qua non for the sustainable development of the Occupied Palestinian Territory and for the emergence of a viable, contiguous Palestinian State based on the two-State solution, in line with relevant United Nations resolutions.