Israel's economic strangulation of Palestinians is coming into focus as negotiations over the control of Rafah's border crossing came to an end, writes Erica Silverman After 11-hour rounds of negotiations lasting all night in Jerusalem, Tuesday morning United States secretary of state, Condoleezza Rice managed to broker an extensive agreement between the Palestinian Authority and Israel that will open the only window to the outside world for Palestinians in the Gaza Strip. The agreement will yield Palestinians freedom to travel abroad through the Rafah crossing point (Gaza's only passenger crossing) along the shared Egyptian border, transit between Gaza and the separated West Bank via a bus convoy system beginning 15 December, and will allow commercial trucks of exports to exit Karni (Gaza's only commercial crossing) into Israel. There are terms in place to open the Gaza seaport, and discussions over the airport will continue. The Rafah border is scheduled to open on 25 November, and it will be the first time Palestinians control an international border. Significantly exports will be permitted to move through the terminal, although all imports will enter through Israeli-operated Kerem Shalom. "Palestinian officers will collect the customs in addition to running all of the financial and administrative affairs at Kerem Shalom," asserted PA Civil Affairs Minister Mohamed Dahlan at Tuesday's press conference in Gaza City. Two months ago Israel completed its unilateral withdrawal from the Gaza Strip. Since then the Rafah crossing point, has been sealed shut, opening sporadically for only nine days to allow a slow trickle of individuals to cross. Today, "zero" labourers are entering Israel through the Erez crossing, and the Karni commercial crossing was closed for nearly one month. This week, the Quartet's special envoy, James Wolfensohn, Rice, the EU's special envoy, Marc Otte, and former US President Bill Clinton are all present in the region, trying to convince the Israelis to consent to an agreement that would permit the Palestinian Authority (PA) to manage the Rafah crossing without Israeli presence. Speaking at the-newly refurbished Rafah terminal last week, Ambassador Otte stated that opening Rafah's terminal is the "First step in a long process that would lead to the Palestinians governing themselves fully, being responsible for their economy, and being responsible for relations with their neighbours as equal partners, as a sovereign nation." Israel and the PA have agreed that the EU will act as a third party presence at the crossing. Mark Regev, spokesperson for the Israeli Foreign Ministry, stated: "Israel is hopeful that the EU will agree to have a security role at the crossing," although the PA and the European delegation initially balked and negotiations are still underway. The delegation will deploy officials to monitor activity, train customs officials, and deliver the necessary equipment to ensure that the crossing is run efficiently and in accordance with international standards. When the terminal was under Israeli control it was not uncommon for Palestinians to be stranded at the border for several days waiting to cross. Other sticking points in the negotiations revolve around Israel's desired security installations at the crossing, such as 24- hour live video surveillance and notification when a list of "high risk" Palestinians cross the border. Sharing passenger data is standard international practice, provided there exist agreements on how it is done, with the necessary mechanisms in place to prevent abuse. Gaza's economic recovery and stability require the free movement of goods and people across Egypt's borders and into Israel. Direct access to the rest of the world through Gaza's airport and seaport, as well as the creation of a viable, safe passage connecting Gaza to the West Bank are essential to easing the economic crises plaguing the strip. "The disengagement without finding a solution for the crossings between Gaza and Egypt means nothing. It is closed from the north and from the south, and so far everything is paralysed here. It has become a big prison," Palestinian presidential spokesperson Nabil Rudeineh told Al-Ahram Weekly. Passenger crossings are the immediate issue the PA hopes to see resolved. It is preparing for continued rounds of negotiations with the Israelis over commercial crossings, most importantly the Karni crossing. Why is Israel maintaining such tight-fisted control over the Rafah and Karni crossings into Gaza after deciding to withdraw? Israel cites weakness in the PA's security apparatus as the reason behind continued closures, although the economic factor cannot be ignored. The Palestinian territories are a large unregulated market for Israeli products. At Karni, first priority is given to Israeli products, second to products coming from overseas, and third to products coming from the West Bank. Trucks containing Israeli products can enter freely, while trucks containing products coming form overseas or from the West Bank often wait several weeks before they are permitted entrance. In September and October approximately 35 truckloads of exports crossed Karni per day, while approximately 360 truckloads of Israeli imports entered per day, according to the general director of crossings for the PA Ministry of Agriculture, Khaled Zoraid. As long as the Paris Protocol, signed in 1994 in conjunction with the Oslo Agreement, is implemented in Gaza all goods crossing the Egyptian border will enter through the Israeli crossing, Kerem Shalom, where there will be a terminal for trade transaction. For goods to enter the "customs envelope," meaning they are only taxed one time if moving to Israeli or the West Bank, Israel must check every product entering Gaza. Presently, Gaza has no economic borders, only security borders. However, there is the potential for Egyptian goods to enter through Rafah. Trade requires a private sector that is willing to invest, and an infrastructure that is predictable and can facilitate trade between the occupied territories and other nations. "The European Investment Bank announced that they are willing to give $400 million in loan guarantees for small businesses in Gaza. The problem is not capital. The problem is restrictions and closures, and unless there is access this funding will never be realised," explained Palestinian economist and member of the Technical Committee for the Withdrawal, Mohamed Samhouri. Israeli traders in the port cities of Ashdod and Haifa import cheap electronics from East Asia. Once the shipments arrive to warehouses in Tel Aviv the products are then re- sold in the occupied territories; hence the tariffs go directly to Israel and are never transferred to the Palestinians. "The World Bank estimates the lost revenue from the Palestinian economy for these 'indirect imports' to the tune of $180 million annually," according to Samhouri. Palestinians import $2.4 billion worth of goods annually, 80 per cent of which comes from Israel, with Palestinians forced to pay the same prices as Israelis. This imposed integration with the Israeli economy -- Israel's control of borders, the forced importation of Israeli products since Palestinians are denied access to other markets, a skewed tariff system or lack thereof, and the forced use of Israeli resources such as electricity, natural gas, and communications systems -- has devastated the Palestinian economy. Over the past 10 years Palestinians have received approximately $8 billion in aid while all economic and social indicators have worsened. A United Nations Conference on Trade and Development report on assistance to the Palestinian people published in the summer of 2003 found that because of the skewed trade relations between the Palestinian territories and Israel, most of the assistance provided by the donor community directly benefits Israel instead of the Palestinians. The Palestinian trade deficit with Israel accounts for 71 per cent of the overall trade deficit, and about 45 per cent of the GDP, meaning 45 cents of every dollar produced domestically goes to Israel. Meanwhile, an estimated "70 per cent of foreign borrowing (mainly from donor support funds) is used to finance lopsided bilateral trade with Israel," according to the report. Post-withdrawal, the hope was that Gazans would be free to move, to do business, to trade, to travel, to study abroad. The exact opposite has occurred. Movement is more restricted than ever as exports have come to a grinding halt and Israeli imports continue to flood, unregulated, into the territories. The PA's ability to manage Rafah would give Palestinians control over their destiny and their daily lives. "The psychological impact of the closures is tremendous upon Palestinian perceptions of Israel's intentions and their own situation in Gaza," explained Nigel Roberts, World Bank director for the West Bank and the Gaza Strip. The Rafah terminal is equipped, EU observers are ready to take their places, and the US administration keeps reiterating the importance of economic stabilisation for the strip. All parties await the green light from Israel.
