US Taxpayers and Palestine's Forced Dependency on Israel

The John Kerry-inspired Palestinian Economic Initiative has already come in for sharp criticism because of what seems to be a not-so-hidden agenda to force Palestine's dependence on Israel under the rubric of peace building through economic interdependence.
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As U.S. Secretary of State John Kerry continues his drive to establish a "framework for negotiations" for Israeli-Palestinian peace, news items paint a disturbing picture of increasing forced Palestinian dependence on Israel.

A case in point is energy. In January, the Palestine Power Generation Company signed a deal with an Israeli-American consortium to supply $1.2 billion worth of Israeli gas over a 20-year period. The implementation of the agreement reportedly awaits guarantees from both the Israeli and Palestinian governments.

The deal is alarming, however, because Palestine has natural gas reserves of its own: over one trillion cubic feet worth, just off the coast of Gaza, valued at $6.5 billion. This is enough to meet Palestinian needs for 15 years. Yet Israel has prevented the Palestinians from exploiting these reserves. This is just one of Palestine's many resources -- others include water and perhaps even oil -- that has fallen victim to Israel's nearly 50-year military occupation.

The commercialization of these reserves by a sovereign Palestinian state would be an important factor in reducing Palestine's dependency on foreign aid. As a taxpayer, I want Americans' $600 million-a-year contribution to the Palestinian Authority (PA) to help end this occupation, not make it easier for Palestinians to endure it.

In 1999, the PA granted the British Gas Group (BGG) and its later partners, the Palestinian Investment Fund and the Consolidated Contractors Company (CCC), a 25-year exploration license covering the entire marine area offshore from Gaza (Palestine's Exclusive Economic Zone).

In 2000, BGG confirmed the presence of a natural gas field, now known as Gaza Marine, and concluded that developing the field would be technically and economically feasible. Since then, BGG has searched for a committed buyer with whom to conclude a long-term contract. Due to initial stalled negotiations with Israel, BGG sought an agreement with Egypt. But, as it closed in on a deal in 2006, former British Prime Minister Tony Blair intervened on behalf of Israel and persuaded BGG to return to negotiations. By the summer of 2007, a deal was starting to take shape, but in December, BGG pulled out, with no explanation.

Palestinian think tank Al-Shabaka investigated the story further, securing several previously unreleased documents in response to a Freedom of Information request to the UK's Foreign and Commonwealth Office (FCO). The documents confirmed that Israel had in fact offered to pay less than half the market price. At a cost of $800 billion to develop the field and with rising gas prices, this wasn't an option for BGG and its partners.

So why didn't they just look for another buyer? Because the development of the field and transport of the product depend entirely on security clearance from Israel.

Recent news reports, linked to Kerry's framework agreement, about the possibility of developing Gaza's gas, indicate that a deal may be in the works to move forward. However, any "deal" is unlikely to be fair to Palestine, given Israel's track record of illegal exploitation of Palestinian resources. Indeed, one cannot help but wonder whether the sudden interest by Blair and company in developing Gaza's gas and oil sector is to help service Palestine's debts to donor countries and to Israel's electricity company.

Moreover, the Kerry-inspired Palestinian Economic Initiative has already come in for sharp criticism because of what seems to be a not-so-hidden agenda to force Palestine's dependence on Israel under the rubric of peace building through economic interdependence.

Israel's prolonged occupation and dispossession has ensured Palestinians' dependence on Israel for everything from water to energy to the allocation of the electromagnetic spectrum. Israel controls when, how much, and at what cost these resources reach the Palestinians - besides siphoning them off (or pillaging to put it less delicately) for its own use.

Furthermore, Israel's exploitation of Palestine's natural resources and prevention of the Palestinians' ability to exploit their own resources have greatly increased Palestinian dependency on foreign aid.

But a free and sovereign Palestine would not need this level of international assistance: It has substantial natural resources, and it could be economically self-sufficient. Instead, the PA faces a deficit of $2 billion and 22 percent unemployment, in large part due to Israeli restrictions on trade, movement, and access.

Meanwhile, we Americans are obliged to give the Israeli government $3.1 billion in military aid each year even though Israel is among the world's wealthiest nations and doesn't need our tax dollars. Worse, American aid to Israel, as well as the political cover it provides, enables Israel to perpetuate its occupation and dispossession of the Palestinians.

As an American taxpayer, I don't want that going to the IRS -- or on my conscience. Do you?

Jacqueline Sansour is Commissioning Editor of Al-Shabaka: The Palestinian Policy Network.

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