The United Nations Human Rights Council announced its intention to publish a blacklist of 150 private companies, including those who do business in the disputed territories beyond the Green Line in Israel. In doing so, the Council plans to condemn the companies for acting against international law. This condemnation is supposed to tarnish the companies’ reputations politically in order to force them out of these territories. This move is said to help the Palestinians in the area; but according to numerous studies on the effects of sanctions, it is more likely to harm them economically.
A recent study of 68 cases where sanctions were imposed shows that in the end there is an expansion of inequality with a damaging impact on the sanctioned economies. For example, Yemen, which was sanctioned for ten years, experienced an increase both in poverty and in polarization due to inequality. The results can still be seen today in the sewage that runs through its streets.
Another case study of sanctions, done between the years 1982-2011, also reveals their negative effects on poverty. The research shows that the poverty gap widened from 5.89% before sanctions to 13.26% afterwards – an increase of 7.37%! Furthermore, there was a 22.39% increase in death rates. Poverty spreads as sanctions intensify.
This data clearly shows the potential for devastating economic damage to Palestinians as the result of applying sanctions to Israeli companies in the disputed territories, and the effects of sanctions are long-term.
Over the years, the economy of the Palestinian Authority (PA) has developed a high dependency on international aid. Prior to the first Intifada (1987) there was a level of only 5% unemployment, with many Palestinians able to find work. Today, that percentage has dramatically risen to approximately 43%, with 58% unemployment among the young people of Gaza. Even amongst the employed there is a high percentage living under the poverty line. The political conflict has caused a worsening of economic conditions, which has led to increased dependency of the PA on foreign aid.
The World Bank recommends the development of the private sector in order to boost Palestinian economic growth. However, this strategy contradicts the interests of the PA, which receives most of its funding from international aid. The funding is given to the leaders of the PA, who use it for terrorism, anti-Zionist propaganda and for fattening the stomachs of the elite (there is a wide gap between rich and poor). In contrast, Palestinians who work for Israeli private-sector companies are able to make a comfortable living without dependency on foreign aid. Clearly, sanctions on Israeli companies prevent this by leading to an increase in Palestinian unemployment.
The consequence of all this is unnecessary human suffering. Sanctions cause a deepening of inequality, a widening of the poverty gap, an increase of social polarity, and more. Furthermore, these effects are long-term. Considering the political reality for individuals in these areas, it is reasonable to believe that massive harm has already been caused. It may well be that the economic reality of poverty and unemployment in everyday life has been contributing to the worsening of the conflict. Considering this perspective, it becomes apparent that the sanctions are targeted not at stabilizing the area, but rather at delegitimizing Israel.