Dead weight of unproductive settlements

Barkan industrial park near Ariel, West Bank. Details of the economy of the settlements ‘are something of a state secret’.

Israeli Settlers Use the Web to Push Back on Boycott

By Jodi Rudoren, NY Times
January 21, 2014

ELI, West Bank — Among the most ardent advocates of labeling products made in Israeli settlements are Gedaliah and Elisheva Blum, American-born religious Jews raising four children high on a hilltop here, in the heart of what most of the world envisions as the future Palestinian state.

The Blums have since 2009 run a website promoting small businesses — mechanics, real estate brokers, caterers, etc. — in the settlements generally viewed as illegal under international law, and last fall they unveiled an online boutique selling settler art. Their approach is an attempted antidote to the “Boycott, Divestment and Sanctions” movement that has been gaining ground lately — buy local, invest, celebrate.

“We wanted to use that same tool everybody else is using against us, for us,” said Mr. Blum, 35.

A recent Israeli government report estimated there are 600 Israeli-owned factories in the West Bank, and $250 million in annual exports — 0.55 percent of the national total — from the West Bank, East Jerusalem and the Golan Heights, territories the international community generally considers illegally occupied. Further details about the settlement economy are something of a state secret: An official at a large West Bank industrial park declined to provide numbers because she did not “want to awaken any demons.”

South Africa issued regulations in 2012 requiring the labeling of settlement products, and British supermarket chains are among those that use ZIP codes to delineate items made in Israel proper from those in the West Bank. A Dutch pension fund recently withdrew funds from five Israeli banks because they do business in the settlements.

David Alhayani, head of the Jordan Valley settlers’ council, said recently that Europeans were shunning his farmers’ herbs and vegetables, though some in Saudi Arabia and Qatar want their dates — so long as they are not labeled.

Tzipi Livni and Yair Lapid, centrist Israeli ministers, have been sounding the boycott alarm. “The status quo will hit each of us in the pocket,” Mr. Lapid warned this month. “We are export-oriented, and this depends on our global standing.”

The Blums have not been deterred.

Their operation is admittedly small bore and symbolic. The “Orange Pages” — the color is taken from the campaign opposing the 2005 evacuation of Gaza Strip settlements — gets 1,000 hits a day. It lists 2,000 businesses, 700 of which pay about $14 a month for more prominent play. Mrs. Blum, who is 30, said some settler leaders told her “don’t promote us, just keep quiet,” but that only a handful of companies had ever declined to be listed.

The new art boutique has sold a dozen prints and one original, totaling $4,500. Profits are put into the Orange Pages — as Mr. Blum put it, “a man from Alabama buys a painting from Hebron and enables a plumber from Shilo to get more exposure.”

Like many settlers, the Blums think Israel should annex the West Bank.

“If you created a time machine and you went back 2,000 years, the center of Jewish life was here, it was Judea and Samaria, it wasn’t Tel Aviv,” Mr. Blum said, using the biblical names for the territory. “If we don’t want to fight for this land — I mean fight as in living and building — we’re erasing our history.”

Mrs. Blum moved at age 5 to Efrat, a settlement south of Jerusalem. Mr. Blum grew up secular in New Jersey, and came to Israel in 2000 on the first free trip for young diaspora Jews run by Birthright. When he came back with Birthright in 2003, she was one of two Israeli volunteers greeting the plane with rugelach from the famed Marzipan bakery. He decided that day they should marry.

They run the websites from their modest home, where Mrs. Blum’s paintings — of an archway in Safed and a Kabbalistic interpretation of creation — adorn the walls and the children, ages 2, 4, 6 and 8, wander in and out.

“The message for our children is, you see something wrong, you fix it,” she said. “We saw a boycott, we see injustice, then you do something about it. Even if it’s just one little baby step.”

Settlements Generate Virtually No Economic Activity

By Richard Silverstein, Tikun Olam
January 22, 2014

You will hear Israel’s boosters brag about the Mediterranean Miracle that is the Israeli economy. ‘Start-Up Nation’ and the like. But you’ll hear virtually nothing similarly-claimed regarding the settlements. Over the decades, the State has invested roughly $20-billion into the settlement enterprise (including military spending to defend them). You’d think it would’ve invested similarly in creating a viable economy there. It hasn’t. Or if it has, it simply hasn’t worked.

Tucked into Jodi Rudoren’s latest NY Times article, which highlights (naturally) a settler website meant to generate economic activity and oppose BDS, is an eye-opening, even shocking fact. If you didn’t read it carefully, it might’ve zipped right by you:

A recent Israeli government report estimated there are…$250 million in annual exports — 0.55 percent of the national total — from the West Bank, East Jerusalem and the Golan Heights, territories the international community generally considers illegally occupied.

Consider this, there are roughly 500,000 Jews living in the same Occupied Territories (note how Rudoren concedes they’re considered “illegally occupied,” but refuses to call them by their commonly-accepted term, ‘Occupied Territories’), which is roughly 8% of the overall Israeli Jewish population. Yet, they produce only “0.55%” of the overall nation’s export product. In other words, there is a mismatch by a factor of more than ten between the expected and actual export product of the settlements. Which means that the settlements produce almost nothing of economic value.

What do they produce? Ideology. And you can export ideology. But it has no monetary or economic value. In fact, BDS makes a very good argument that ideology, in that sense, actually suppresses economic output (since BDS is harming Israel’s overall economic activity).

So what do they do in the settlements? Most of the working residents are employed by government or local/municipal services. In other words, the government pays these people to serve others like them. There are also many settlers who work at actual productive jobs within the Green Line. Their homes are not where they work. So their economic output drives the economic engine within the Green Line, not outside it.

Which brings us to this basic truth: while the settlements make an ideological statement, they have no actual economic foundation. This is the case despite fifty years of effort and massive expense on the part of the Israeli government, which offered the settlement enterprise every opportunity to establish itself. So settlements offer almost no contribution to the nation’s overall GDP. They are not viable from any realistic measure. So the question arises: how long can Israel afford to carry this albatross around its neck before it realizes the huge bird will cause it to drown like shipwrecked sailors of old.

Notes and links

Israel’s economy
Measured by Gross Domestic Product, Israel hovers a few places below the EU average – which is surprisingly low given the EU average includes the GDP of Portugal, Greece, Spain and all the newly-joined countries of eastern Europe. Were it not for arms sales Israel would be lower still. Here, in global terms, Israel ranks fourth in the ratio of of its earnings from arms sales to GDP (the leading countries in that measurement are Russia, Uzbekistan and Jordan, none of them having the flourishing free market economy of which Israel likes to boast).

Settlements have cost Israel $17 billion, study finds. Haaretz, March 2010

The $17bn cost of the settlements by 2010 does not include the huge cost of ‘security’. If not another shekel were spent by the Israeli state on maintaining the settlements, it would take 68 years for them to earn their keep. But of course the state is still spending lavishly on the infrastructure and the security of the settlers.