Amira Hass reports: The Israeli occupation is exacting a high price on the Palestinian economy, according to a report by the Palestinian Ministry of National Economy and the Applied Research Institute – Jerusalem – which puts the damage at $6.9 billion a year – what it calls a conservative estimate. The figure is about 85% of the Palestinian GDP for 2010, $8.124 billion.

The calculation includes the suspension of economic activity in the Gaza Strip because of Israel’s blockade, the prevention of income from the natural resources Israel is exploiting because of its direct control over most of the territory and the additional costs for the Palestinian expenses due to restrictions on movement, use of land and production imposed by Israel.

The introduction to the report states that the blocking of Palestinian economic development derives from the colonialist tendency of the Israeli occupation ever since 1967: exploitation of natural resources coupled with a desire to keep the Palestinian economy from competing with the Israeli one.

The report was published at the end of September, a few days after Palestinian President Mahmoud Abbas applied for full membership at the United Nations.

Its publication during the period of the High Holidays meant that it was hardly mentioned in the Israeli media.

By quantifying the losses caused by the Israeli occupation, the authors of the report wished to dispel the mistaken impression that has developed over the past two or three years that the Palestinian economy is flourishing naturally, whereas it is in fact supported by donations that make up the cost of the occupation.

The largest chunk of losses to the Palestinian economy is due to the policy of the blockade on Gaza, which is preventing all production and exports. The calculation was made on the basis of a comparison of the rate of growth in the GDP in the West Bank, which in the years prior to the blockade was similar to the growth rate in Gaza. Thus, the authors of the report estimate that in 2010 the gap between the potential GDP in Gaza (nearly $3 billion ) and the actual GDP was more than $1.9 billion. The Palestinian economy, and especially the agriculture sector, is losing a similar sum because of Israel’s discriminatory distribution of water between Palestinians and Israelis. Relying on a 2009 World Bank report, the authors of the current study find that not only did the Oslo accords freeze in place a situation of unequal distribution of water pumped in the West Bank (a ratio of 80:20 ), but also that Israel is pumping more from the western aquifer than was alloted it in the agreement.