Occupied Territories No Longer Drain on Israeli Economy; Unemployment Reduced

The Arab territories that Israel has occupied since June, 1967, are almost beginning to pay for themselves. Instead of creating a drain on Israel’s economy, they are bringing in substantial amounts of revenue and could show a profit in the not too distant future, according to official figures released here this week. Israel is expected to spend $55.1 million to administer the West Bank, Gaza Strip, Golan Heights and Sinai during the next fiscal year which begins April 1. But she will collect $46.1 million in taxes and oil revenues, the latter from Egyptian wells on the Sinai peninsula. This means that Israel will have to lay out only $9 million of its own resources on the occupied territory–less than one fourth of one percent of its $3.8 billion budget for fiscal 1971-72. The bulk of the revenue stems from taxes paid by the 1 million Arab inhabitants. Except for East Jerusalem, where the Israeli tax scale has been introduced, the inhabitants of the occupied territories pay no higher taxes than they did under Jordanian, Egyptian or Syrian rule before 1967. However, their income has been growing. According to figures published by the Bank of Israel, there has been a 12-16 percent annual rise in production in the occupied territories.

The occupied territories export less to Israel than they buy from it. But the trade deficit has harrowed from $21.75 million in 1969 to $11.6 million in 1970. About 31 percent of their exports is in the form of labor–Arabs who travel to Israel each day for jobs on which they are paid the same wage scale that Israeli workers receive. The Israeli job market has reduced unemployment on the West Bank from 5.8 percent in 1969 to 2.7 percent in 1970. The West Bankers enjoy a favorable trade balance with Jordan’s east bank, via the Jordan River bridges. The figures show an important trend in the territories economy in recent years has been its growing interrelationship with the economy of Israel. Israeli farming methods have been adopted to increase agricultural production. Israeli industry has subcontracted to firms in the occupied territories. Israel itself has become a market for furniture made in Gaza and candy from Nablus. The territories imported from Israel $75.4 million last year, a ten percent increase over 1969 imports.